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Lou Dobbs Tonight

Bush Administration Getting Tough on Iran; Pentagon Unclear on Whether Army will Increase Permanently

Aired February 09, 2005 - 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.


ANNOUNCER: This is LOU DOBBS TONIGHT for Wednesday, February 9. Here now for an hour of news, debate and opinion, sitting in for Lou Dobbs, Kitty Pilgrim.
KITTY PILGRIM, HOST: Good evening.

President Bush today gave Iran one of its clearest warnings yet to stop its escalating nuclear program. The president said bluntly that Iran must not develop a nuclear weapon.

At the same time, Secretary of State Condoleezza Rice said Iran could face U.N. sanctions if it fails to give up its nuclear ambitions.

Senior White House correspondent John King reports -- John.

JOHN KING, CNN CORRESPONDENT: And Kitty, in both the comments from Secretary Rice and the president here at the White House today, more evidence that this administration is still not operating in sync with the key European partners when it comes to efforts, diplomatic efforts right now to try to get Iran to be more forthcoming about its nuclear program.

Secretary Rice's first trip overseas has been well received in Europe. But listen to her here. She wants the Europeans to be much more tougher in their approach with Iran, to make clear that if Iran does not fully cooperate with the international community and allow unfettered inspections of its nuclear program, that the international community is ready to take this case to the United Nations Security Council.

The Europeans have been unwilling to set a deadline. You need to listen carefully to this very diplomatic language, but it is clear Secretary Rice is a bit impatient.

(BEGIN VIDEO CLIP)

CONDOLEEZZA RICE, SECRETARY OF STATE: I think the message is there. The Iranians need to get that message. And we can certainly always remind them that there are other steps that the international community has at its disposal should they not be prepared to -- to live up to these obligations.

(END VIDEO CLIP)

KING: The question came up here at the White House today. President Bush in the Oval Office, meeting with Poland's president, in Washington for consultations on Iraq and other issues.

Mr. Bush was asked about Iran. He praised Secretary Rice for starters, saying he thought her trip had gone quite well. But listen again to Mr. Bush. He will go to Europe later this month. This will be one of the key points of contention.

Again, the administration wants the Europeans to tell the Iranians, "Come clean with your nuclear program or face a sanctions debate in the United Nations Security Council." Mr. Bush saying it is critical that everyone involved in this debate speak with one voice.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The Iranians just need to know that the free world is working together to send a very clear message. Don't develop a nuclear weapon. And the reason we're sending that message is because Iran with a nuclear weapon would be a very destabilizing force in the world.

And I look forward to going over to Europe to continue discussing this issue with our allies. It's important we speak with one voice.

(END VIDEO CLIP)

KING: Now again that one voice, at least in the administration's perspective, lacking right now. The Europeans pushing Iran to be more forthcoming, pushing Iran to allow unfettered inspections of its nuclear program but unwilling, at least so far, to set a clear date, saying they are willing to take this to the United Nations if Iran does not cooperate more so.

So clearly, Kitty, as Mr. Bush prepares to go overseas and his secretary of state returns from her first trip, the president says a good first trip but clearly work left for Mr. Bush if he is to get this administration on the same page with the Europeans in what the White House hopes would be a tougher posture toward Iran -- Kitty.

PILGRIM: All right. Thanks very much, John King. Thanks, John.

A top Air Force general today said the U.S. military routinely updates its war plans for Iran, but the general said there is no heightened state of alert at the moment.

Now, if the United States did attack Iranian nuclear sites, military experts say the Air Force and Navy would probably launch limited air and missile strikes.

Pentagon correspondent Barbara Starr reports.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN CORRESPONDENT (voice-over): One hundred and fifty miles southwest of Tehran, the Iraq heavy water plant, a facility international inspectors believe is critical to Iran's nuclear weapons program. One of many suspected nuclear sites the U.S. says are well hidden around the country. Finding all of the sites would be just one problem in launching any so-called limited strike to take them out. To avoid Iranian military on the ground, the U.S. would likely fire from long distances, using Tomahawk cruise missiles from ships in the Persian Gulf and precision bombs from the long-range B-2 stealth bomber.

But military and security experts agree Iran's religious leaders would strike back hard.

KENNETH POLLACK, BROOKINGS INSTITUTION: There's no reason to believe that the Iranians would see them limited. In fact, the Iranians might choose to retaliate in a far less limited fashion. In particular, they're likely to try to employ terrorist attacks.

STARR: Iran's long-standing support for Hezbollah and its ability to marshal terrorist attacks in retaliation is a major concern. But there is more.

Experts say Iran could retaliate with a missile strike. With a range of 1,500 kilometers, its Shahab 3 and other missiles could hit U.S. troops in Iraq and Kuwait, strike Israel and even reach Turkey.

Iran's mobile launchers would be difficult to preemptively destroy.

Former defense secretary, William Cohen, is an ardent supporter of diplomacy with Iran, and he knows the limits of the limited strike option. In 1998, the U.S. conducted air strikes against Saddam Hussein's missile facilities, hoping to halt his missile production for two years.

WILLIAM COHEN, FORMER DEFENSE SECRETARY: You can reconstitute facilities that are destroyed, and so unless you're talking about all- out devastation and an occupation of a country with widespread destruction, limited attacks are good on a temporary basis, but again the down side is you may end up causing a national -- a rising nationalism and a revolution of a different sort against the United States.

STARR (on camera): Could the U.S. military launch a strike against Iran? The answer is, of course, yes. But the Bush administration is making it clear diplomacy is the preferred option. No military action against Iran is anticipated.

Barbara Starr, CNN, the Pentagon.

(END VIDEOTAPE)

PILGRIM: There was a defiant response from Iran to the warnings from President Bush and Secretary of State Condoleezza Rice. The Iranian president declared today Iran will never give up its nuclear programs. He insisted it was for peaceful purposes. The Iranian president also warned of unspecified, quote, "massive consequences" if it is treated unfairly over its nuclear program.

Defense Secretary Donald Rumsfeld focused on Iraq during a visit to old Europe today. Rumsfeld is in southern France for a meeting of the NATO defense ministers. Speaking to a crew of U.S. destroyers, Rumsfeld acknowledge the road that to peace in Iraq will be difficult.

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, SECRETARY OF DEFENSE: I wish I could assure you that everything was going to turn out well, but I can't. I suspect that there are going to be more people killed, that there will be more difficulties, that it will be a bumpy road, a tough road.

(END VIDEO CLIP)

PILGRIM: In Iraq, the military today said two more American soldiers have been killed in combat. One soldier was killed in Balad. That's north of Baghdad. That's when insurgents attack a U.S. convoy. Another soldier was wounded in that attack.

Military officials also said an American soldier was killed in the northern city of Mosul on Sunday. There was no explanation for the delay, however, in reporting that attack.

And in the southern city of Basra, gunmen today killed an Iraqi television reporter and his 3-year-old son. The reporter worked for an American-funded television network.

The wars in Iraq and Afghanistan have put a huge strain on our military. But Defense Secretary Donald Rumsfeld has agreed to only a temporary increase in the size of the Army. Rumsfeld wants to delay a decision on a permanent increase until the next year at the earliest.

Senior Pentagon correspondent Jamie McIntyre reports -- Jamie.

JAMIE MCINTYRE, CNN CORRESPONDENT: Well, Kitty, that's the question. Should that temporary increase be made permanent? Earlier this week Defense Secretary Rumsfeld said there's a, quote, "good strong possibility" that the Army won't need the extra troops sometime in the future.

That rankled members of Congress today. House Armed Services Committee was taking testimony on the Army's budget and many advocates in Congress of a bigger military were disappointed that Rumsfeld is not acting sooner.

Today the civilian and military heads of the Army were asked questions about it, and the chief of staff of the Army, General Peter Schoomaker, insisted that if he comes to the conclusion he needs more troops, he's confident he'll get them.

(BEGIN VIDEO CLIP)

GEN. PETER SCHOOMAKER, CHIEF OF STAFF, ARMY: I am fully confident that if I were to walk through the door to the secretary of defense and tell them we need to build the Army again, that he would say to do it.

REP. ELLEN TAUSCHER: I would be right behind you the day you do that and I frankly don't care what you call it. The secretary is very facile with definitions. I don't care if you call it temporary, part- time, sometimes, maybe. I just think we need more active duty troops, and I hope we'll get to that sooner than later.

(END VIDEO CLIP)

MCINTYRE: California Congresswoman Ellen Tauscher, one of the strong advocates of increasing the size of the U.S. military and the Marines, for that matter, as well, the U.S. Army and the Marines. Tauscher among the critics who say that the Pentagon needs to act sooner because the force is nearing a breaking point.

She pointed out that 40 percent of the troops now in Iraq are from National Guard units, and in response, the Navy -- the Army said it would be relying a lot less on Guard and Reserve troops in the next rotation. And that the heavier percentage during this rotation was to give some of the active duty troops a break and that in the next rotation, they'll be relying less and less on the Guard -- Kitty.

PILGRIM: All right. Thank you very much, Jamie McIntyre.

Lawmakers today began a pretty tough debate on new measures to control illegal aliens and tighten our border security. And one of the bill's sponsors, House Judiciary Chairman Jim Sensenbrenner, declared the main goal of the measure is to prevent another September 11 attack.

Congressional correspondent Ed Henry reports -- Ed.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Good evening, Kitty.

That's right. The key way that James Sensenbrenner would like to prevent another 9/11 attack is by banning illegal immigrants from getting driver's licenses. That's the key provision of this REAL ID Act which finally kicked off debate today. These are the leftover provisions which were not included in the 9/11 intelligence reform bill back in December.

This legislation would also make it more difficult to seek political asylum here in America. It would also strengthen the border along the U.S.-Mexico border by building the rest of the wall, about three more miles, near San Diego.

Now there are Democrats, though, opposing this strongly today, saying they believe the asylum provisions go too far.

Also, Democratic Congresswoman Jane Harman today saying that while James Sensenbrenner has reportedly said that many of the 9/11 hijackers were able to get driver's licenses and that may have been how they were able to carry out their attacks, Harman today saying that, in fact, many -- and, in fact, all of the hijackers already had legal immigration documentation when they got here and that whether or not they had driver's licenses, in her estimation, had nothing to do with their ability to carry out the attacks.

But Republican Congressman Tom Davis said that this legislation will strengthen the United States.

(BEGIN VIDEO CLIP)

REP. TOM DAVIS (R), GOVERNMENT REFORM COMMITTEE CHAIRMAN: We don't tell states who they can issue driver's licenses to. That's up to them. We do say if you want to use it for federal purposes, such as getting on an airplane, you'd have to show what's called legal presence, that people are who they say they are. They can't be somebody else. They can't be here illegally. This is not an immigration issue. This is a national security issue.

(END VIDEO CLIP)

HENRY: Despite the debate back and forth, this legislation is expected to clear the House tomorrow after a floor vote. It faces an uncertain fate in the Senate, however. Senator Majority Leader Bill Frist has not committed yet to bring up this legislation after it passes through the House.

And, also, there's a lot of division in the House, in particular over this guest worker program that President Bush talked about in the State of the Union last week. House Majority Leader Tom DeLay and other Republicans saying they would prefer that immigrants would have to -- illegal immigrants would have to go back to their home country before coming back to the United States to get temporary legal status.

That's a very thorny issue that still has to be worked out -- Kitty.

PILGRIM: Indeed it is. Thanks very much.

Ed Henry.

Later in the broadcast, House Judiciary Committee Chairman Jim Sensenbrenner will join me and he'll tell me why he believes the REAL ID legislation must be implemented as soon as possible.

Coming up next, why our nuclear power plants could be easy targets for terrorists.

(COMMERCIAL BREAK)

PILGRIM: The U.S. Marine Corps has stripped 11 Marines of their Purple Hearts because they were not wounded in combat. The Purple Heart is meant to recognize American troops wounded by the enemy. But the Marine Corps says the 11 Marines were injured in accidents.

Ed Lavendera reports from Atchison, Kansas.

(BEGIN VIDEOTAPE)

ED LAVENDERA, CNN CORRESPONDENT (voice-over): Marine Corporal Travis Eichelberger keeps his Purple Heart in the same box it came in hidden away in his father's closet.

CPL. TRAVIS EICHELBERGER, U.S. MARINE CORPS: That's for safety. That's Dad's idea, actually.

LAVENDERA: In the first weeks of the Iraq war, the 21-year-old Marine was run over by a U.S. military tank while he was sleeping. He suffered major injuries to his pelvis and legs. His mother said his knees looked like pancakes. He was awarded the Purple Heart in the hospital bed.

EICHELBERGER: I did kind of feel, you know, like, you know, you felt good about yourself, like, you know, people were going to recognize you more.

LAVENDERA: To receive a Purple Heart, a service member must be injured directly or indirectly by an enemy attack. The Marine Corps says that's why Eichelberger and 10 other Marines should not have received the Purple Heart. About two years after he was injured on the battlefield, Eichelberger was told the medal had been revoked.

EICHELBERGER: It kind of seems like I've told a lie almost. You know, I've put in job applications that says I am a Purple Heart recipient.

LAVENDERA: The Marine Corps is taking full responsibility for putting these young Marines in an awkward situation. A Marine spokesman says the medals had to be taken away "to protect the honor and integrity of the award" and that "the Marine Corps made a mistake in rushing to award these Marines before having all the relevant facts."

After receiving the Purple Heart, Eichelberger returned to a hero's welcome in his small hometown of Atchison, Kansas, a parade in his honor.

EICHELBERGER: Thanks isn't enough. I can't say -- saying thanks to you guys isn't enough.

LAVENDERA: He bought a truck complete with the Purple Heart license plate.

EICHELBERGER: So I'm going to have to change that out.

LAVENDERA: Eichelberger says he was shocked to learn he didn't deserve the Purple Heart. Now he worries about what others will think about his service in Iraq.

EICHELBERGER: It's to the point now that, if something does come out of all this media coverage and they just decide and let us keep it, then it's like, oh, well, I'm just getting to keep it because we made, you know, a fuss about it. So it's -- either way, it's tarnished it.

LAVENDERA: The Marines say they spent almost a year reinvestigating the cases of these 11 Marines. That's little solace to Corporal Eichelberger who says he's the one who has to explain to his neighbors why his Purple Heart was taken away.

Ed Lavendera, CNN, Atchison, Kansas. (END VIDEOTAPE)

PILGRIM: Well, that brings us to the subject of tonight's poll. Do you believe the 11 Marines that were awarded Purple Hearts should be able to keep their medals? Vote yes or no. Cast your vote at loudobbs.com. We'll bring you the results a little bit later in the show.

In our special report, "America's Security Risks," tonight, our threat to nuclear power plants. Attorneys general from seven states are calling for tighter security. They say much more needs to be done to prevent an attack on one of the more than 100 nuclear plants across this country.

Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN FINANCIAL CORRESPONDENT (voice-over): The nuclear power industry in America has rarely known a quiet day. For the last several decades, it's been wracked with controversy from the building of a nuclear power plant at Diablo Canyon in California to the accident at Three Mile Island in Pennsylvania.

Plagued by ongoing debates over where to safely dispose of radioactive waste and accusations of too cozy a relationship between the industry and the Nuclear Regulatory Commission.

DANIELLE BRIAN, PROJECT ON GOVERNMENT OVERSIGHT: Really the problem we have is a government agency that is so close to the industry that they are simply unwilling to say, you know what, I'm sorry that you don't like this, you're going to have to increase security to the levels that we've decided are appropriate.

TUCKER: Today, there are 103 commercial nuclear plants operating at 64 sites in 31 states, and, according to the NRC, they've never been safer.

NILS DIAZ, CHAIRMAN, NUCLEAR REGULATORY COMMISSION: I think nuclear power plant facilities in the United States are as safe as they should be. We have increased security in the power plants rapidly after 9/1. We continue to do so. We are very confident that they are safe, that they are secure, and that we have done what need to be done to protect the American people.

TUCKER: In January of this year, attorneys general from seven states -- California, Arizona, Wisconsin, Illinois, Arkansas, New York and Connecticut -- wrote letters in support of a petition presented to the Nuclear Regulatory Commission by Mothers for Peace and the Committee to Bridge the Gap. They want security measures around the plants tightened.

BILL LOCKYER, CALIFORNIA ATTORNEY GENERAL: I know because I have law-enforcement personnel what the specifics are in California, and I do not think that they are secure and enhanced in a way that's adequate. TUCKER: The industry defends itself, noting that its plants are physically strong structures which they say can withstand the impact of a commercial jetliner. While defending their own security measures, they do say there needs to be better cooperation with state and federal response teams.

MARVIN FENTEL, NUCLEAR ENERGY INSTITUTE: We've done a lot in the last three years. The federal government's done a lot. But we haven't been able to yet integrate it to what I would say is an optimum situation.

(END VIDEOTAPE)

TUCKERS: Now critics say the plants should be able to withstand an attack by 19 attackers, just like we faced on 9/11. They NRC says they have updated their standards from pre-9/11 levels, but, Kitty, they won't tell us by how much, pleading the case of secrecy.

PILGRIM: Well, understandably so. Nevertheless, a disturbing report. Thanks very much.

Bill Tucker.

Well, coming up next, how India could be looting the future of global communications.

(COMMERCIAL BREAK)

PILGRIM: During the dot-com boom, American telecom companies built massive communication networks around the world. But now, after the telecom bust, foreign companies are buying up thousands of miles of fiber optic cable buried miles under the ocean, and they're buying it for pennies on the dollar. In that fire sale, Indian outsourcers see a huge opportunity.

Christine Romans reports.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT (voice-over): The lifeline for Indian outsourcers is the cable that sends the information from big U.S. companies to cheap Indian laborers and back again.

SCOTT CLELAND, PRECURSOR GROUP: Think about this business, you know. It literally depends on that transoceanic pipe. It has to function. You know that if it doesn't work, the whole business browns out. Their whole industry browns out. So it's absolutely critical to secure.

ROMANS: Now one of the biggest Indian outsourcers may control up to 80 percent of the pipe, the bandwidth on the Pacific route.

If Tata's deal to buy Tyco's undersea cable operations goes through, India's Tata will own one of the world's highest capacity international underwater cable systems and control the channels through which it ships all kinds of lucrative outsourcing.

Tata says, "With this deal, no one will be able to beat us." Indeed, it could give Indian outsourcing a turbo charge and, analysts say, head-off competition from other low-cost labor markets.

MARIBEL LOPEZ, FORRESTER RESEARCH: India is worried about China and other countries coming in to steal their business. So they want to make sure that they can snap up one of the most valuable crucial assets that's required to win business, which is the reliable cheap connectivity to the U.S. market.

ROMANS: Much of that connectivity is being bought by foreign companies cheaply. There have been three major deals in the last year. Tata's deal, a mere $130 million. A majority of Global Crossing went for $250 million, and Reliance Infocom of India bought FLAG for $211 million, about six cents on the dollar.

(END VIDEOTAPE)

ROMANS: Kitty, one critic likened this to looting during a blackout, all this U.S.-built infrastructure being snapped up for next to nothing, and, in the case of Tata, it could result in more U.S. jobs being sent overseas.

PILGRIM: Christine, isn't the government concerned about this?

ROMANS: This deal was announced in November. It hasn't been approved yet by the U.S. government. But the U.S. Committee for Foreign Investments won't confirm or deny that it is investigating this. But it has to pass through them before it can get final approval.

PILGRIM: Thanks very much.

Christine Romans.

Hewlett-Packard CEO Carly Fiorina today ousted by the company's board. The board asked Fiorina to resign, citing the company's disappointing performance since it bought COMPAQ Computer two years ago. Fiorina isn't walking away empty-handed, however. She'll receive more than $21 million in severence. Fiorina is known for her infamous comment on outsourcing. She said, "There is no job that is America's God-given right anymore."

Next, a battle in Congress over immigration. I'll talk with one congressman who's calling for a crackdown on driver's licenses for illegal aliens.

(COMMERCIAL BREAK)

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

PILGRIM: In a moment, one controversial bill in Congress receives strong support from the White House and the author of the bill is my guest. But, first, these stories. Authorities in Florida have captured a man police believe killed one sheriff's deputy and wounded two others. The deputies were responding to a domestic disturbance call today when the suspect opened fire and fled. He has been identified as 29-year-old Jason Lee Wheeler.

At least 43 people were injured in Spain today when a car bomb exploded in Madrid. Basque separatists are believed to be responsible. It was the worst terrorist blast in Spain's capital since the March train bombing which killed nearly 200 people.

An ailing Pope John Paul II today missed ash Wednesday prayers for the first time in his 26 years as pope. The pope marked the Catholic holiday, which begins the Lenten season in his hospital room. He has been hospitalized for more than a week with a respiratory infection.

As we reported, the House today began debating a bill that would help stop millions of illegal aliens in this country from obtaining U.S. driver's licenses.

Congressman James Sensenbrenner introduced the bill. He's chairman of the House Judiciary Committee and joins me from Capitol Hill. And thanks for joining us, sir.

REP. JAMES SENSENBRENNER, (R-WI) HOUSE JUDICIARY COMMITTEE: Thank you.

PILGRIM: Today the White House issued a statement saying it strongly supports House passage of this. This is quite a boon for your efforts which have had some difficulties, so far.

SENSENBRENNER: Well, I hope that my colleagues in the House tomorrow when we vote on the bill and those in the Senate when they get it, will realize that unless we have an I.D. program where people who have driver's licenses are really those who say they are, we're going to have a huge border security problem. And what the bill does is it says that if you wish to use your driver's licenses for federal I.D. purposes like getting on a plane, you have to prove your legal presence in the United States.

PILGRIM: To remind our viewers, this was originally part of a 9/11 measure. Then was stripped out and now is being introduced sort of on its own.

Does this make it stronger, do you think?

SENSENBRENNER: Well, I think it would be very hard for someone who votes no on this bill to explain to their constituents why they think illegal aliens should still get driver's licenses. You have to remember that Muhammad Atta, the ringleader of the 9/11 murderers got a six-month visa and a six-year driver's license from the state of Florida. Had my bill been law then, that driver's license would have expired as the date of his expiration of his visa, and he would not have been able to get on a plane because he was using an expired I.D.

PILGRIM: You see it as a security bill, not an immigration bill, is that right?

SENSENBRENNER: This is the absolute security bill in America when somebody comes here, we should need to know who they are, why they're here and when they are going to leave. And if we make our I.D. system through the driver's licenses more accurate and more secure, we will be able to more easily spot people who don't belong here anymore or never should have gotten into the country in the first place.

PILGRIM: Let's talk about one separate issue and that's border security. The intelligence reform bill calls for 2,000 more border patrols. The budget only allows for about 200, how do you reconcile these differences in numbers. Does it worry you?

SESENBRENNER: It worries me a lot, because we're not going to get border security without enforcement personnel. Two weeks ago, the five Republican chairmen who were House conferees on the intelligence bill sent the president a letter calling on him to fully fund the 2,000 additional border patrol agents and 40,000 additional detention beds called for in the intelligence bill. I guess because the president refused to do so we're going to have to shuffle some money around, because without adequate enforcement, we're not going to be able to get the type of security that the American public expects our government to give them.

PILGRIM: Thanks very much for being with us tonight, Congressman James Sensenbrenner.

SESENBRENNER: Thank you.

PILGRIM: As we reported last night, the president's budget for 2006 would eliminate federal funding that helps the states cover the costs of incarcerating illegal aliens. Well, tonight Arizona governor Janet Napolitano is fighting back. And she has billion the federal government $118 million for the cost of keeping criminal illegal aliens in Arizona prisoners -- prisons. Governor Napolitano says Arizona has done its by taking criminals off the street. And she says the federal government has abandoned it's responsibility by refusing to pay its share of the costs.

Well, let's turn now to the high cost of free trade. Our nation's exploding trade deficit with China has sparked an intense debate in Congress. Some lawmakers are calling for the United States to dramatically change its trade relations with China.

Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Congress gave China permanent normal trade relation status in 2000. That lowered U.S. tariffs on Chinese goods. But since then, the U.S. trade deficit with China has ballooned to an estimated $150 billion. And the United States has been hemorrhaging manufacturing jobs.

REP. BERNIE SANDERS (I), VERMONT: The middle class of America is shrinking. Real inflation accounted for wages are going down. The new jobs being projected will be low wage, poor benefit jobs.

SYLVESTER: Congressman Bernie Sanders has introduced legislation to revoke China's permanent normal trade relation status also known as PNTR. Sanders has 60 co-sponsors who are also worried that China will take over as the next economic and political superpower.

REP. DANA ROHRABACHER (R), CALIFORNIA: There has been no political reform in China. And until then, this is no different than feeding any other ugly, vicious dictatorship. It will eventually pose a threat to the United States and it already does.

SYLVESTER: But the Manufacturers' Alliance, which represents U.S. manufacturers of all sizes, says rolling back PNTR with China could have a devastating impact on the U.S. economy.

TOM DUESTERBERG, PRES., MANUFACTURERS ALLIANCE: Repealing PNTR would be a nuclear option. It would be the worst possible form of unilateralism. The United States has spent two, three generations trying to build a system of international trade based on rules.

SYLVESTER: Currently China is ignoring trade rules governing its currency and copyright enforcement. Lawmakers hope that threatening to revoke China's trade status will force the Chinese to comply with trade regulations, Making it possible for U.S. jobs to return.

(END VIDEOTAPE)

SYLVESTER: Representative Bernie Sanders first introduced this legislation last year. It was buried in the House Ways and Means Committee and didn't go anywhere. But this year he has more co- sponsors and more Republican on board -- Kitty.

PILGRIM: Thanks very much, Lisa Sylvester.

My next guest has serious concerns about President Bush's plan to reform Social Security. Senator Olympia Snowe, a Republican, says we need more consensus before we overhaul the system. And Senator Snowe joins me tonight from Capitol Hill. Thanks for being here.

Senator Snowe, you come from a state which -- in which this is a very big issue.

What are your concerns about the president's plan?

SENATOR OLYMPIA SNOWE (R), MAINE: Well, first and foremost, I think it's important to establish a consensus on the facts and the nature and the dimension of the problem. I think that's important, not only for those of us in Congress, but also for the American people. I also think it's important to approach this issue, which is so critical to so many people, you know, currently our seniors, but also in the future to other generations, that we deal with this issue in a very systematic, thorough and deliberate way. I think it's very important that we give this every consideration in a careful way in the United States Congress and not just rush into acting in an expeditious way that ultimately affects the underlying program that has worked so well for 70 years. PILGRIM: The president has suggested for younger workers that private accounts could be used. Do you object to them out of hand or do you think that perhaps they could be in addition to the current system?

SNOWE: It certainly could be in addition to the current system. And that's something that we can look at in the overall scheme of, you know, in broadening retirement security. And that's what I indicated to the president in our meeting last week. I thought it was important. But I do have concerns about carving out from the payroll tax in order to craft these personal savings account because it will add $2 trillion in additional debt that we can ill afford at this time, not to mention what it would do to the fundamentals of the existing Social Security system.

PILGRIM: Senator Snowe, you remember the Senate Finance Committee. What's your estimation of the cost of this and are you worried about its impact on the deficit?

SNOWE: Well, I certainly am. And that's what we are trying to extract, as well, from administration officials, exactly what will be the cost. And we're looking at a 10-year window for the cost of the upward of $2 trillion, because it's the budgetary requirement or does it go beyond that into multi-trillions of dollars over the period of time which I expect it would. Therefore, we're talking about a major cost in addition to the fact that we have not addressed the fundamental problem structurally with the Social Security system in 2042 or 2052. So we really have a lot of work to do before we can proceed in any deliberate way on this issue. I think we really have to do our homework and proceed cautiously and prudently. Because this program has worked exceptionally well. And I don't think we want to add confusion without knowing what the facts are.

PILGRIM: Let me -- we're almost out of time, but I really do want to get to something near and dear to your heart. It's the importation -- drug importation bill that you introduced. Tell us little bit about that and why it's different.

SNOWE: Absolutely. Senator Dorgan and I, along with almost 28 of our colleagues in the United States Senate on a bipartisan basis and as well as bicameral (ph). Companion legislation was introduced in the House. What we are saying is, it's time to have drug importation from Canada and the European Union. We've set up a safety regulated method of doing so. Unfortunately, FDA has not done it. It's had the authority to do it for almost six years. It's failed to do it. And so we are really putting in place every safety related measure possible to make it safe so the American people, American consumers can have access to more affordable medications. Right now Americans are paying more than any other industrialized country. That's not fair given the fact that they spend so much on the research and development that has benefited people, not only in America, but worldwide.

PILGRIM: Thank you very much for explaining it to us, Senator Olympia Snowe.

SNOWE: Thank you.

PILGRIM: A warning tonight for the million and a half employees of Wal-Mart. The world's largest retailer tonight says it will close one of its Canadian stores. Employees at the Quebec store were close to becoming the first to have a union contract with Wal-Mart, but instead of agreeing to the union's demands, the company decided to shut down the store and fire the employees.

Coming up next our "Face-Off" on whether President Bush's budget will do anything to cut the massive federal deficit.

(COMMERCIAL BREAK)

PILGRIM: Well, President Bush today faced new criticism over his $2.5 trillion budget for next year. More than 150 programs will be eliminated or slashed under the president's proposal. And that brings us to tonight's "Face-Off.

Joining us from Capitol Hill is Senator Jon Corzine. He says the president budget represents the type of quote, "irresponsibility and dishonest bookkeeping that would make Ken Lay blush." That's a quote.

And Senator Chuck Grassley, on the other hand, says he appreciates the president's effort to cut the deficit. Thanks for joining us.

And so I have to -- Senator Corzine, I do have to start with you. Is that a little bit overstated, or do you think that's fair?

SEN. JON CORZINE, (D) NEW JERSEY: Well, I really think there are two sets of books here. The one presented in the budget plan meets the president's objective over the next 5 years of halving the budget deficit.

Unfortunately, it leaves out some major programs like the cost of the war in Iraq and Afghanistan, the cost of the beginning investment in the privatization of Social Security which the president has made his top priority on domestic. The reform of the alternative minimum tax, which I know Senator Grassley believes has to be addressed. There is the extension of the tax cuts that the president has put down.

All of those things are going to lead to much higher deficits because they are going to erode the revenues and increase the expenditures that we have. So I don't think we're seeing the real product of what's going to happen over the next 5 years.

PILGRIM: Senator Grassley it does leave out Iraq and Afghanistan. Is that OK?

SEN. CHUCK GRASSLEY, (R-IA) FINANCE CMTE. CHAIRMAN: Well, listen, when you appropriate money for things that are going to be one-time expenditures or maybe two-time expenditures and you don't predict the future to know exactly how much you want, you wait until you get there, until you know exactly what you should ask for. But one of the principles of bookkeeping is you don't build into a baseline that kind of expenditures, because it's just an excuse to spend on top of that amount next time.

And so it seems to me this is the most honest sort of budgeting, when you don't put things into the baseline that aren't going to be there forever. And in regard to the tax cut, I think you have to take Greenspan's word for it that the tax cuts were very, very essential to get us out of the recession and to have the revitalization of tax money coming into the federal government that's coming in right now.

And makings those tax cuts permanent is not anything that needs to be budgeted from this standpoint, because it's existing tax policy. Should it be for 10 years or should it be permanent? Everybody believes that permanency and predictability in tax policy is the best way to do that.

PILGRIM: What about Social Security?

GRASSLEY: You are asking me?

PILGRIM: Yes.

GRASSLEY: Social Security won't be an issue unless the president becomes Professor Bush and has a seminar with the American people. And at the Grass Roots convince people that there needs to be changes made in Social Security so our grandchildren and children can have the same programs that we have. And unless we make changes, they won't have.

Unless the president gets that job done, it won't really be an issue here in Congress. Now I want the president to make that jump. And I want to be able to help him get the reforms that he's proposing. Or even if he doesn't propose them, reforms that we know need to be done so that our children and grandchildren can have Social Security.

PILGRIM: Let me talk to Senator Corzine about the president's pledge to cut the deficit in half in the next 5 years. Do you think that's attainable with the current numbers and the current math that's going on?

CORZINE: Well, as I said if you live by the budget numbers the president proposed, I think that's the way the arithmetic works. But the fact is that those very important items that I itemized before, war in Iraq, the president's proposal with regard to Social Security, AMT, extension of the tax cuts, they are left out. And I don't see how those are going to add up.

And I respectfully disagree with Chairman Grassley, who I want to stay on a good side of here, but the fact is is that the president is making proposals of 150 cuts in programs that he has comes to Congress with just as much as he has to come with on the Social Security reform proposal that he's laying down. And so that has to be won in Congress.

I suspect that Chairman Grassley is not going to be too excited about the cut in the farm programs that I see done. I doubt there are going to be Republicans or Democratic Senators going to be happy about the Amtrak cuts that we see up and down that northeast corridor. And there are a whole bunch of governors, which I happen to have a little bit of interest in these days are not going to like the Medicaid cuts. So, those have to be argued out just as much as does the Social Security privatization scheme that the president has put forward.

I don't think what you see is what you are going to get. And as a consequence of all these big charges that are going to come down the pipe that are left out, I think we're going to see high levels of budget deficits for as far as the eye can see.

PILGRIM: Well, in the interest of friendly debate, we have to call it here. Thank you for joining us, Senator Corzine and Senator Grassley. Thanks.

CORZINE: Thank you.

PILGRIM: A new stamp honoring the nation's 40th president went on sale today. Ceremonies were held across the country for the new Ronald Reagan stamp. 170 million stamps were printed and collectors lined up to buy them.

Former first lady Nancy Reagan unveiled the new design last November in California.

Well, here's a reminder to vote in tonight's poll about the marines who received Purple Hearts from noncombat injuries in the war in Iraq. And the question is, "Do you believe the 11 marines that were awarded Purple Hearts should be able to keep their medals? yes or no?" Cast your vote at loudobbs.com. We'll bring you the results in just a few minutes here.

Coming up next, on the road to peace in the Middle East: A leading expert on the latest Israeli/Palestinian cease-fire.

(COMMERCIAL BREAK)

PILGRIM: Dramatic video just in to CNN. In Massachusetts tonight, the Coast Guard rescued three fishermen from a sinking boat. The men aboard the 38-foot boat called Hollywood radioed for help this afternoon saying the boat was sinking. A Coast Guard helicopter brought the men to safety. No one was injured.

Let's turn now to new hope for peace in the Middle East.

Israel says it will soon lift travel restrictions on Palestinians in Gaza and the West Bank following an historic cease-fire agreement. Israeli Prime Minister Ariel Sharon and Palestinian President Mahmoud Abbas declared the truce yesterday at a summit meeting in Egypt.

Joining me now for more on this major development is Danielle Pletka of the American Enterprise Institute. She's in Washington. Danielle, thanks for being here.

DANIELLE PLETKA, AMERICAN ENTERPRISE INSTITUTE: Thanks for having me.

PILGRIM: We've seen so many -- ten cease-fires over the last four years all fail. Where are we here with this truce? Are we in a more hopeful place?

PLETKA: I think we are in a more hopeful place. Don't forget. This is a cease-fire between a new Palestinian leader and an Israeli leader. Mahmoud Abbas is a different man, a man with more integrity than Yasser Arafat. So I think we have reason to be more hopeful, but perhaps not blindly optimistic.

PILGRIM: President Bush has agreed to meet with Sharon and Abbas and he was criticized widely in his first term for not being quite as engaged in the Middle East peace process as many thought he should be. Is he now and do you think that his efforts will be helpful?

PLETKA: I think the president's principle on this remains the same, which is that at the end of the day, peace is between the Israelis and the Palestinians. The United States is not a party to these negotiations. We're just a facilitator. Now there are better people who are involved in this. Yasser Arafat is gone from the scene. The president can afford for the United States to be more involved, to push more. But we have to remember that the peace has to be built between them, one that isn't built between them isn't going to last.

PILGRIM: The big question is whether Hamas and Islamic Jihad will allow this to proceed. What's your expert opinion on that?

PLETKA: Well, I think that certain terrorist groups have already made clear that they are not going to allow this to proceed. Hezbollah is one of them. They pay some of the Al Aqsa Martyrs Brigade's troops that are going to be out there trying to kill people as they always have. Terrorist groups are sustained by the constant murder of civilians. And so I can't imagine they're going to be able to refrain.

PILGRIM: What's your timetable? How soon do you think we'll see results or will this be years?

PLETKA: Well, I hope that we don't go by any timetable. At the end of the day we have got to build on reality, we've got to build on results. And one of the problems we had in the past was that we set artificial deadlines that everybody had to meet willy nilly. This will take years. The real question is, are we going to be able to move solidly forward or is it going to be one step forward, two steps back, five steps back and another disaster on our hands? I'm more hopeful, but we shouldn't set artificial timetables.

PILGRIM: Danielle, I read an op-ed piece that I think is beautifully written that you came up with and it's talking about the position of Europe, vis-a-vis the United States in this process. We have Secretary of State Condoleezza Rice in Europe right now making very conciliatory statements to the Europeans, let's work together, let's turn the page, let's set a new future. Do you think the Europeans and the Americans will be able to work together on this very important issue?

PLETKA: I have no doubt that we'll be able to work together. I think that the Europeans in the United States can work together on a whole variety of issues. Our problems are not agreeing about whether peace is vital in the Middle East or Iran shouldn't have nuclear weapons. Our problems are always when it comes to the end of the game, what should we do about it? The Europeans are always interested in pushing Israel into an agreement that isn't sustainable with the Palestinians and the United States is a little more careful. But I think as we work together, we will be able to be helpful together.

PILGRIM: Thanks very much for joining us this evening. Danielle Pletka.

Let's take a look now at some of your thoughts. Many of you wrote about Carly Fiorina's forced departure as chief executive at Hewlett-Packard. David Marks of Manteca, California writes, "Carly Fiorina once said Americans must realize that they don't have a God- given right to a job. Well, welcome to the unemployment line, Carly."

And Tim Hutchinson of Kennesaw, Georgia writes, "There is a God. American IT workers are dancing in the streets. The only way it could be better would be to hear that her job has been outsourced to India."

And on Social Security, Ron Rhinehart of Mesa, Arizona writes, "Why should Americans now trust their elected leaders in Congress to fix Social Security? They're the ones who stole it from us in the first place. Maybe they can find a way for foreign workers with U.S. jobs to pay into it."

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

Still ahead, the results of tonight's poll and a preview of what's ahead tomorrow.

(COMMERCIAL BREAK)

PILGRIM: Now the results of tonight's poll. 87 percent of you believe that the 11 marines that were awarded Purple Hearts should be able to keep their medals. 13 percent do not. Thanks for being with us tonight. Please join us tomorrow. America's security risks, how vulnerable is our national power grid to a terrorist attack? We'll have a special report on that.

Also tomorrow, the author of "Nuclear Terrorism, the Ultimate Preventable Catastrophe" and the exploding record trade deficit in this country and its devastating impact on American workers.

For all of us here, good night from New York. "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 February 9, 2005 - 18:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: This is LOU DOBBS TONIGHT for Wednesday, February 9. Here now for an hour of news, debate and opinion, sitting in for Lou Dobbs, Kitty Pilgrim.
KITTY PILGRIM, HOST: Good evening.

President Bush today gave Iran one of its clearest warnings yet to stop its escalating nuclear program. The president said bluntly that Iran must not develop a nuclear weapon.

At the same time, Secretary of State Condoleezza Rice said Iran could face U.N. sanctions if it fails to give up its nuclear ambitions.

Senior White House correspondent John King reports -- John.

JOHN KING, CNN CORRESPONDENT: And Kitty, in both the comments from Secretary Rice and the president here at the White House today, more evidence that this administration is still not operating in sync with the key European partners when it comes to efforts, diplomatic efforts right now to try to get Iran to be more forthcoming about its nuclear program.

Secretary Rice's first trip overseas has been well received in Europe. But listen to her here. She wants the Europeans to be much more tougher in their approach with Iran, to make clear that if Iran does not fully cooperate with the international community and allow unfettered inspections of its nuclear program, that the international community is ready to take this case to the United Nations Security Council.

The Europeans have been unwilling to set a deadline. You need to listen carefully to this very diplomatic language, but it is clear Secretary Rice is a bit impatient.

(BEGIN VIDEO CLIP)

CONDOLEEZZA RICE, SECRETARY OF STATE: I think the message is there. The Iranians need to get that message. And we can certainly always remind them that there are other steps that the international community has at its disposal should they not be prepared to -- to live up to these obligations.

(END VIDEO CLIP)

KING: The question came up here at the White House today. President Bush in the Oval Office, meeting with Poland's president, in Washington for consultations on Iraq and other issues.

Mr. Bush was asked about Iran. He praised Secretary Rice for starters, saying he thought her trip had gone quite well. But listen again to Mr. Bush. He will go to Europe later this month. This will be one of the key points of contention.

Again, the administration wants the Europeans to tell the Iranians, "Come clean with your nuclear program or face a sanctions debate in the United Nations Security Council." Mr. Bush saying it is critical that everyone involved in this debate speak with one voice.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The Iranians just need to know that the free world is working together to send a very clear message. Don't develop a nuclear weapon. And the reason we're sending that message is because Iran with a nuclear weapon would be a very destabilizing force in the world.

And I look forward to going over to Europe to continue discussing this issue with our allies. It's important we speak with one voice.

(END VIDEO CLIP)

KING: Now again that one voice, at least in the administration's perspective, lacking right now. The Europeans pushing Iran to be more forthcoming, pushing Iran to allow unfettered inspections of its nuclear program but unwilling, at least so far, to set a clear date, saying they are willing to take this to the United Nations if Iran does not cooperate more so.

So clearly, Kitty, as Mr. Bush prepares to go overseas and his secretary of state returns from her first trip, the president says a good first trip but clearly work left for Mr. Bush if he is to get this administration on the same page with the Europeans in what the White House hopes would be a tougher posture toward Iran -- Kitty.

PILGRIM: All right. Thanks very much, John King. Thanks, John.

A top Air Force general today said the U.S. military routinely updates its war plans for Iran, but the general said there is no heightened state of alert at the moment.

Now, if the United States did attack Iranian nuclear sites, military experts say the Air Force and Navy would probably launch limited air and missile strikes.

Pentagon correspondent Barbara Starr reports.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN CORRESPONDENT (voice-over): One hundred and fifty miles southwest of Tehran, the Iraq heavy water plant, a facility international inspectors believe is critical to Iran's nuclear weapons program. One of many suspected nuclear sites the U.S. says are well hidden around the country. Finding all of the sites would be just one problem in launching any so-called limited strike to take them out. To avoid Iranian military on the ground, the U.S. would likely fire from long distances, using Tomahawk cruise missiles from ships in the Persian Gulf and precision bombs from the long-range B-2 stealth bomber.

But military and security experts agree Iran's religious leaders would strike back hard.

KENNETH POLLACK, BROOKINGS INSTITUTION: There's no reason to believe that the Iranians would see them limited. In fact, the Iranians might choose to retaliate in a far less limited fashion. In particular, they're likely to try to employ terrorist attacks.

STARR: Iran's long-standing support for Hezbollah and its ability to marshal terrorist attacks in retaliation is a major concern. But there is more.

Experts say Iran could retaliate with a missile strike. With a range of 1,500 kilometers, its Shahab 3 and other missiles could hit U.S. troops in Iraq and Kuwait, strike Israel and even reach Turkey.

Iran's mobile launchers would be difficult to preemptively destroy.

Former defense secretary, William Cohen, is an ardent supporter of diplomacy with Iran, and he knows the limits of the limited strike option. In 1998, the U.S. conducted air strikes against Saddam Hussein's missile facilities, hoping to halt his missile production for two years.

WILLIAM COHEN, FORMER DEFENSE SECRETARY: You can reconstitute facilities that are destroyed, and so unless you're talking about all- out devastation and an occupation of a country with widespread destruction, limited attacks are good on a temporary basis, but again the down side is you may end up causing a national -- a rising nationalism and a revolution of a different sort against the United States.

STARR (on camera): Could the U.S. military launch a strike against Iran? The answer is, of course, yes. But the Bush administration is making it clear diplomacy is the preferred option. No military action against Iran is anticipated.

Barbara Starr, CNN, the Pentagon.

(END VIDEOTAPE)

PILGRIM: There was a defiant response from Iran to the warnings from President Bush and Secretary of State Condoleezza Rice. The Iranian president declared today Iran will never give up its nuclear programs. He insisted it was for peaceful purposes. The Iranian president also warned of unspecified, quote, "massive consequences" if it is treated unfairly over its nuclear program.

Defense Secretary Donald Rumsfeld focused on Iraq during a visit to old Europe today. Rumsfeld is in southern France for a meeting of the NATO defense ministers. Speaking to a crew of U.S. destroyers, Rumsfeld acknowledge the road that to peace in Iraq will be difficult.

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, SECRETARY OF DEFENSE: I wish I could assure you that everything was going to turn out well, but I can't. I suspect that there are going to be more people killed, that there will be more difficulties, that it will be a bumpy road, a tough road.

(END VIDEO CLIP)

PILGRIM: In Iraq, the military today said two more American soldiers have been killed in combat. One soldier was killed in Balad. That's north of Baghdad. That's when insurgents attack a U.S. convoy. Another soldier was wounded in that attack.

Military officials also said an American soldier was killed in the northern city of Mosul on Sunday. There was no explanation for the delay, however, in reporting that attack.

And in the southern city of Basra, gunmen today killed an Iraqi television reporter and his 3-year-old son. The reporter worked for an American-funded television network.

The wars in Iraq and Afghanistan have put a huge strain on our military. But Defense Secretary Donald Rumsfeld has agreed to only a temporary increase in the size of the Army. Rumsfeld wants to delay a decision on a permanent increase until the next year at the earliest.

Senior Pentagon correspondent Jamie McIntyre reports -- Jamie.

JAMIE MCINTYRE, CNN CORRESPONDENT: Well, Kitty, that's the question. Should that temporary increase be made permanent? Earlier this week Defense Secretary Rumsfeld said there's a, quote, "good strong possibility" that the Army won't need the extra troops sometime in the future.

That rankled members of Congress today. House Armed Services Committee was taking testimony on the Army's budget and many advocates in Congress of a bigger military were disappointed that Rumsfeld is not acting sooner.

Today the civilian and military heads of the Army were asked questions about it, and the chief of staff of the Army, General Peter Schoomaker, insisted that if he comes to the conclusion he needs more troops, he's confident he'll get them.

(BEGIN VIDEO CLIP)

GEN. PETER SCHOOMAKER, CHIEF OF STAFF, ARMY: I am fully confident that if I were to walk through the door to the secretary of defense and tell them we need to build the Army again, that he would say to do it.

REP. ELLEN TAUSCHER: I would be right behind you the day you do that and I frankly don't care what you call it. The secretary is very facile with definitions. I don't care if you call it temporary, part- time, sometimes, maybe. I just think we need more active duty troops, and I hope we'll get to that sooner than later.

(END VIDEO CLIP)

MCINTYRE: California Congresswoman Ellen Tauscher, one of the strong advocates of increasing the size of the U.S. military and the Marines, for that matter, as well, the U.S. Army and the Marines. Tauscher among the critics who say that the Pentagon needs to act sooner because the force is nearing a breaking point.

She pointed out that 40 percent of the troops now in Iraq are from National Guard units, and in response, the Navy -- the Army said it would be relying a lot less on Guard and Reserve troops in the next rotation. And that the heavier percentage during this rotation was to give some of the active duty troops a break and that in the next rotation, they'll be relying less and less on the Guard -- Kitty.

PILGRIM: All right. Thank you very much, Jamie McIntyre.

Lawmakers today began a pretty tough debate on new measures to control illegal aliens and tighten our border security. And one of the bill's sponsors, House Judiciary Chairman Jim Sensenbrenner, declared the main goal of the measure is to prevent another September 11 attack.

Congressional correspondent Ed Henry reports -- Ed.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Good evening, Kitty.

That's right. The key way that James Sensenbrenner would like to prevent another 9/11 attack is by banning illegal immigrants from getting driver's licenses. That's the key provision of this REAL ID Act which finally kicked off debate today. These are the leftover provisions which were not included in the 9/11 intelligence reform bill back in December.

This legislation would also make it more difficult to seek political asylum here in America. It would also strengthen the border along the U.S.-Mexico border by building the rest of the wall, about three more miles, near San Diego.

Now there are Democrats, though, opposing this strongly today, saying they believe the asylum provisions go too far.

Also, Democratic Congresswoman Jane Harman today saying that while James Sensenbrenner has reportedly said that many of the 9/11 hijackers were able to get driver's licenses and that may have been how they were able to carry out their attacks, Harman today saying that, in fact, many -- and, in fact, all of the hijackers already had legal immigration documentation when they got here and that whether or not they had driver's licenses, in her estimation, had nothing to do with their ability to carry out the attacks.

But Republican Congressman Tom Davis said that this legislation will strengthen the United States.

(BEGIN VIDEO CLIP)

REP. TOM DAVIS (R), GOVERNMENT REFORM COMMITTEE CHAIRMAN: We don't tell states who they can issue driver's licenses to. That's up to them. We do say if you want to use it for federal purposes, such as getting on an airplane, you'd have to show what's called legal presence, that people are who they say they are. They can't be somebody else. They can't be here illegally. This is not an immigration issue. This is a national security issue.

(END VIDEO CLIP)

HENRY: Despite the debate back and forth, this legislation is expected to clear the House tomorrow after a floor vote. It faces an uncertain fate in the Senate, however. Senator Majority Leader Bill Frist has not committed yet to bring up this legislation after it passes through the House.

And, also, there's a lot of division in the House, in particular over this guest worker program that President Bush talked about in the State of the Union last week. House Majority Leader Tom DeLay and other Republicans saying they would prefer that immigrants would have to -- illegal immigrants would have to go back to their home country before coming back to the United States to get temporary legal status.

That's a very thorny issue that still has to be worked out -- Kitty.

PILGRIM: Indeed it is. Thanks very much.

Ed Henry.

Later in the broadcast, House Judiciary Committee Chairman Jim Sensenbrenner will join me and he'll tell me why he believes the REAL ID legislation must be implemented as soon as possible.

Coming up next, why our nuclear power plants could be easy targets for terrorists.

(COMMERCIAL BREAK)

PILGRIM: The U.S. Marine Corps has stripped 11 Marines of their Purple Hearts because they were not wounded in combat. The Purple Heart is meant to recognize American troops wounded by the enemy. But the Marine Corps says the 11 Marines were injured in accidents.

Ed Lavendera reports from Atchison, Kansas.

(BEGIN VIDEOTAPE)

ED LAVENDERA, CNN CORRESPONDENT (voice-over): Marine Corporal Travis Eichelberger keeps his Purple Heart in the same box it came in hidden away in his father's closet.

CPL. TRAVIS EICHELBERGER, U.S. MARINE CORPS: That's for safety. That's Dad's idea, actually.

LAVENDERA: In the first weeks of the Iraq war, the 21-year-old Marine was run over by a U.S. military tank while he was sleeping. He suffered major injuries to his pelvis and legs. His mother said his knees looked like pancakes. He was awarded the Purple Heart in the hospital bed.

EICHELBERGER: I did kind of feel, you know, like, you know, you felt good about yourself, like, you know, people were going to recognize you more.

LAVENDERA: To receive a Purple Heart, a service member must be injured directly or indirectly by an enemy attack. The Marine Corps says that's why Eichelberger and 10 other Marines should not have received the Purple Heart. About two years after he was injured on the battlefield, Eichelberger was told the medal had been revoked.

EICHELBERGER: It kind of seems like I've told a lie almost. You know, I've put in job applications that says I am a Purple Heart recipient.

LAVENDERA: The Marine Corps is taking full responsibility for putting these young Marines in an awkward situation. A Marine spokesman says the medals had to be taken away "to protect the honor and integrity of the award" and that "the Marine Corps made a mistake in rushing to award these Marines before having all the relevant facts."

After receiving the Purple Heart, Eichelberger returned to a hero's welcome in his small hometown of Atchison, Kansas, a parade in his honor.

EICHELBERGER: Thanks isn't enough. I can't say -- saying thanks to you guys isn't enough.

LAVENDERA: He bought a truck complete with the Purple Heart license plate.

EICHELBERGER: So I'm going to have to change that out.

LAVENDERA: Eichelberger says he was shocked to learn he didn't deserve the Purple Heart. Now he worries about what others will think about his service in Iraq.

EICHELBERGER: It's to the point now that, if something does come out of all this media coverage and they just decide and let us keep it, then it's like, oh, well, I'm just getting to keep it because we made, you know, a fuss about it. So it's -- either way, it's tarnished it.

LAVENDERA: The Marines say they spent almost a year reinvestigating the cases of these 11 Marines. That's little solace to Corporal Eichelberger who says he's the one who has to explain to his neighbors why his Purple Heart was taken away.

Ed Lavendera, CNN, Atchison, Kansas. (END VIDEOTAPE)

PILGRIM: Well, that brings us to the subject of tonight's poll. Do you believe the 11 Marines that were awarded Purple Hearts should be able to keep their medals? Vote yes or no. Cast your vote at loudobbs.com. We'll bring you the results a little bit later in the show.

In our special report, "America's Security Risks," tonight, our threat to nuclear power plants. Attorneys general from seven states are calling for tighter security. They say much more needs to be done to prevent an attack on one of the more than 100 nuclear plants across this country.

Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN FINANCIAL CORRESPONDENT (voice-over): The nuclear power industry in America has rarely known a quiet day. For the last several decades, it's been wracked with controversy from the building of a nuclear power plant at Diablo Canyon in California to the accident at Three Mile Island in Pennsylvania.

Plagued by ongoing debates over where to safely dispose of radioactive waste and accusations of too cozy a relationship between the industry and the Nuclear Regulatory Commission.

DANIELLE BRIAN, PROJECT ON GOVERNMENT OVERSIGHT: Really the problem we have is a government agency that is so close to the industry that they are simply unwilling to say, you know what, I'm sorry that you don't like this, you're going to have to increase security to the levels that we've decided are appropriate.

TUCKER: Today, there are 103 commercial nuclear plants operating at 64 sites in 31 states, and, according to the NRC, they've never been safer.

NILS DIAZ, CHAIRMAN, NUCLEAR REGULATORY COMMISSION: I think nuclear power plant facilities in the United States are as safe as they should be. We have increased security in the power plants rapidly after 9/1. We continue to do so. We are very confident that they are safe, that they are secure, and that we have done what need to be done to protect the American people.

TUCKER: In January of this year, attorneys general from seven states -- California, Arizona, Wisconsin, Illinois, Arkansas, New York and Connecticut -- wrote letters in support of a petition presented to the Nuclear Regulatory Commission by Mothers for Peace and the Committee to Bridge the Gap. They want security measures around the plants tightened.

BILL LOCKYER, CALIFORNIA ATTORNEY GENERAL: I know because I have law-enforcement personnel what the specifics are in California, and I do not think that they are secure and enhanced in a way that's adequate. TUCKER: The industry defends itself, noting that its plants are physically strong structures which they say can withstand the impact of a commercial jetliner. While defending their own security measures, they do say there needs to be better cooperation with state and federal response teams.

MARVIN FENTEL, NUCLEAR ENERGY INSTITUTE: We've done a lot in the last three years. The federal government's done a lot. But we haven't been able to yet integrate it to what I would say is an optimum situation.

(END VIDEOTAPE)

TUCKERS: Now critics say the plants should be able to withstand an attack by 19 attackers, just like we faced on 9/11. They NRC says they have updated their standards from pre-9/11 levels, but, Kitty, they won't tell us by how much, pleading the case of secrecy.

PILGRIM: Well, understandably so. Nevertheless, a disturbing report. Thanks very much.

Bill Tucker.

Well, coming up next, how India could be looting the future of global communications.

(COMMERCIAL BREAK)

PILGRIM: During the dot-com boom, American telecom companies built massive communication networks around the world. But now, after the telecom bust, foreign companies are buying up thousands of miles of fiber optic cable buried miles under the ocean, and they're buying it for pennies on the dollar. In that fire sale, Indian outsourcers see a huge opportunity.

Christine Romans reports.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT (voice-over): The lifeline for Indian outsourcers is the cable that sends the information from big U.S. companies to cheap Indian laborers and back again.

SCOTT CLELAND, PRECURSOR GROUP: Think about this business, you know. It literally depends on that transoceanic pipe. It has to function. You know that if it doesn't work, the whole business browns out. Their whole industry browns out. So it's absolutely critical to secure.

ROMANS: Now one of the biggest Indian outsourcers may control up to 80 percent of the pipe, the bandwidth on the Pacific route.

If Tata's deal to buy Tyco's undersea cable operations goes through, India's Tata will own one of the world's highest capacity international underwater cable systems and control the channels through which it ships all kinds of lucrative outsourcing.

Tata says, "With this deal, no one will be able to beat us." Indeed, it could give Indian outsourcing a turbo charge and, analysts say, head-off competition from other low-cost labor markets.

MARIBEL LOPEZ, FORRESTER RESEARCH: India is worried about China and other countries coming in to steal their business. So they want to make sure that they can snap up one of the most valuable crucial assets that's required to win business, which is the reliable cheap connectivity to the U.S. market.

ROMANS: Much of that connectivity is being bought by foreign companies cheaply. There have been three major deals in the last year. Tata's deal, a mere $130 million. A majority of Global Crossing went for $250 million, and Reliance Infocom of India bought FLAG for $211 million, about six cents on the dollar.

(END VIDEOTAPE)

ROMANS: Kitty, one critic likened this to looting during a blackout, all this U.S.-built infrastructure being snapped up for next to nothing, and, in the case of Tata, it could result in more U.S. jobs being sent overseas.

PILGRIM: Christine, isn't the government concerned about this?

ROMANS: This deal was announced in November. It hasn't been approved yet by the U.S. government. But the U.S. Committee for Foreign Investments won't confirm or deny that it is investigating this. But it has to pass through them before it can get final approval.

PILGRIM: Thanks very much.

Christine Romans.

Hewlett-Packard CEO Carly Fiorina today ousted by the company's board. The board asked Fiorina to resign, citing the company's disappointing performance since it bought COMPAQ Computer two years ago. Fiorina isn't walking away empty-handed, however. She'll receive more than $21 million in severence. Fiorina is known for her infamous comment on outsourcing. She said, "There is no job that is America's God-given right anymore."

Next, a battle in Congress over immigration. I'll talk with one congressman who's calling for a crackdown on driver's licenses for illegal aliens.

(COMMERCIAL BREAK)

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

PILGRIM: In a moment, one controversial bill in Congress receives strong support from the White House and the author of the bill is my guest. But, first, these stories. Authorities in Florida have captured a man police believe killed one sheriff's deputy and wounded two others. The deputies were responding to a domestic disturbance call today when the suspect opened fire and fled. He has been identified as 29-year-old Jason Lee Wheeler.

At least 43 people were injured in Spain today when a car bomb exploded in Madrid. Basque separatists are believed to be responsible. It was the worst terrorist blast in Spain's capital since the March train bombing which killed nearly 200 people.

An ailing Pope John Paul II today missed ash Wednesday prayers for the first time in his 26 years as pope. The pope marked the Catholic holiday, which begins the Lenten season in his hospital room. He has been hospitalized for more than a week with a respiratory infection.

As we reported, the House today began debating a bill that would help stop millions of illegal aliens in this country from obtaining U.S. driver's licenses.

Congressman James Sensenbrenner introduced the bill. He's chairman of the House Judiciary Committee and joins me from Capitol Hill. And thanks for joining us, sir.

REP. JAMES SENSENBRENNER, (R-WI) HOUSE JUDICIARY COMMITTEE: Thank you.

PILGRIM: Today the White House issued a statement saying it strongly supports House passage of this. This is quite a boon for your efforts which have had some difficulties, so far.

SENSENBRENNER: Well, I hope that my colleagues in the House tomorrow when we vote on the bill and those in the Senate when they get it, will realize that unless we have an I.D. program where people who have driver's licenses are really those who say they are, we're going to have a huge border security problem. And what the bill does is it says that if you wish to use your driver's licenses for federal I.D. purposes like getting on a plane, you have to prove your legal presence in the United States.

PILGRIM: To remind our viewers, this was originally part of a 9/11 measure. Then was stripped out and now is being introduced sort of on its own.

Does this make it stronger, do you think?

SENSENBRENNER: Well, I think it would be very hard for someone who votes no on this bill to explain to their constituents why they think illegal aliens should still get driver's licenses. You have to remember that Muhammad Atta, the ringleader of the 9/11 murderers got a six-month visa and a six-year driver's license from the state of Florida. Had my bill been law then, that driver's license would have expired as the date of his expiration of his visa, and he would not have been able to get on a plane because he was using an expired I.D.

PILGRIM: You see it as a security bill, not an immigration bill, is that right?

SENSENBRENNER: This is the absolute security bill in America when somebody comes here, we should need to know who they are, why they're here and when they are going to leave. And if we make our I.D. system through the driver's licenses more accurate and more secure, we will be able to more easily spot people who don't belong here anymore or never should have gotten into the country in the first place.

PILGRIM: Let's talk about one separate issue and that's border security. The intelligence reform bill calls for 2,000 more border patrols. The budget only allows for about 200, how do you reconcile these differences in numbers. Does it worry you?

SESENBRENNER: It worries me a lot, because we're not going to get border security without enforcement personnel. Two weeks ago, the five Republican chairmen who were House conferees on the intelligence bill sent the president a letter calling on him to fully fund the 2,000 additional border patrol agents and 40,000 additional detention beds called for in the intelligence bill. I guess because the president refused to do so we're going to have to shuffle some money around, because without adequate enforcement, we're not going to be able to get the type of security that the American public expects our government to give them.

PILGRIM: Thanks very much for being with us tonight, Congressman James Sensenbrenner.

SESENBRENNER: Thank you.

PILGRIM: As we reported last night, the president's budget for 2006 would eliminate federal funding that helps the states cover the costs of incarcerating illegal aliens. Well, tonight Arizona governor Janet Napolitano is fighting back. And she has billion the federal government $118 million for the cost of keeping criminal illegal aliens in Arizona prisoners -- prisons. Governor Napolitano says Arizona has done its by taking criminals off the street. And she says the federal government has abandoned it's responsibility by refusing to pay its share of the costs.

Well, let's turn now to the high cost of free trade. Our nation's exploding trade deficit with China has sparked an intense debate in Congress. Some lawmakers are calling for the United States to dramatically change its trade relations with China.

Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Congress gave China permanent normal trade relation status in 2000. That lowered U.S. tariffs on Chinese goods. But since then, the U.S. trade deficit with China has ballooned to an estimated $150 billion. And the United States has been hemorrhaging manufacturing jobs.

REP. BERNIE SANDERS (I), VERMONT: The middle class of America is shrinking. Real inflation accounted for wages are going down. The new jobs being projected will be low wage, poor benefit jobs.

SYLVESTER: Congressman Bernie Sanders has introduced legislation to revoke China's permanent normal trade relation status also known as PNTR. Sanders has 60 co-sponsors who are also worried that China will take over as the next economic and political superpower.

REP. DANA ROHRABACHER (R), CALIFORNIA: There has been no political reform in China. And until then, this is no different than feeding any other ugly, vicious dictatorship. It will eventually pose a threat to the United States and it already does.

SYLVESTER: But the Manufacturers' Alliance, which represents U.S. manufacturers of all sizes, says rolling back PNTR with China could have a devastating impact on the U.S. economy.

TOM DUESTERBERG, PRES., MANUFACTURERS ALLIANCE: Repealing PNTR would be a nuclear option. It would be the worst possible form of unilateralism. The United States has spent two, three generations trying to build a system of international trade based on rules.

SYLVESTER: Currently China is ignoring trade rules governing its currency and copyright enforcement. Lawmakers hope that threatening to revoke China's trade status will force the Chinese to comply with trade regulations, Making it possible for U.S. jobs to return.

(END VIDEOTAPE)

SYLVESTER: Representative Bernie Sanders first introduced this legislation last year. It was buried in the House Ways and Means Committee and didn't go anywhere. But this year he has more co- sponsors and more Republican on board -- Kitty.

PILGRIM: Thanks very much, Lisa Sylvester.

My next guest has serious concerns about President Bush's plan to reform Social Security. Senator Olympia Snowe, a Republican, says we need more consensus before we overhaul the system. And Senator Snowe joins me tonight from Capitol Hill. Thanks for being here.

Senator Snowe, you come from a state which -- in which this is a very big issue.

What are your concerns about the president's plan?

SENATOR OLYMPIA SNOWE (R), MAINE: Well, first and foremost, I think it's important to establish a consensus on the facts and the nature and the dimension of the problem. I think that's important, not only for those of us in Congress, but also for the American people. I also think it's important to approach this issue, which is so critical to so many people, you know, currently our seniors, but also in the future to other generations, that we deal with this issue in a very systematic, thorough and deliberate way. I think it's very important that we give this every consideration in a careful way in the United States Congress and not just rush into acting in an expeditious way that ultimately affects the underlying program that has worked so well for 70 years. PILGRIM: The president has suggested for younger workers that private accounts could be used. Do you object to them out of hand or do you think that perhaps they could be in addition to the current system?

SNOWE: It certainly could be in addition to the current system. And that's something that we can look at in the overall scheme of, you know, in broadening retirement security. And that's what I indicated to the president in our meeting last week. I thought it was important. But I do have concerns about carving out from the payroll tax in order to craft these personal savings account because it will add $2 trillion in additional debt that we can ill afford at this time, not to mention what it would do to the fundamentals of the existing Social Security system.

PILGRIM: Senator Snowe, you remember the Senate Finance Committee. What's your estimation of the cost of this and are you worried about its impact on the deficit?

SNOWE: Well, I certainly am. And that's what we are trying to extract, as well, from administration officials, exactly what will be the cost. And we're looking at a 10-year window for the cost of the upward of $2 trillion, because it's the budgetary requirement or does it go beyond that into multi-trillions of dollars over the period of time which I expect it would. Therefore, we're talking about a major cost in addition to the fact that we have not addressed the fundamental problem structurally with the Social Security system in 2042 or 2052. So we really have a lot of work to do before we can proceed in any deliberate way on this issue. I think we really have to do our homework and proceed cautiously and prudently. Because this program has worked exceptionally well. And I don't think we want to add confusion without knowing what the facts are.

PILGRIM: Let me -- we're almost out of time, but I really do want to get to something near and dear to your heart. It's the importation -- drug importation bill that you introduced. Tell us little bit about that and why it's different.

SNOWE: Absolutely. Senator Dorgan and I, along with almost 28 of our colleagues in the United States Senate on a bipartisan basis and as well as bicameral (ph). Companion legislation was introduced in the House. What we are saying is, it's time to have drug importation from Canada and the European Union. We've set up a safety regulated method of doing so. Unfortunately, FDA has not done it. It's had the authority to do it for almost six years. It's failed to do it. And so we are really putting in place every safety related measure possible to make it safe so the American people, American consumers can have access to more affordable medications. Right now Americans are paying more than any other industrialized country. That's not fair given the fact that they spend so much on the research and development that has benefited people, not only in America, but worldwide.

PILGRIM: Thank you very much for explaining it to us, Senator Olympia Snowe.

SNOWE: Thank you.

PILGRIM: A warning tonight for the million and a half employees of Wal-Mart. The world's largest retailer tonight says it will close one of its Canadian stores. Employees at the Quebec store were close to becoming the first to have a union contract with Wal-Mart, but instead of agreeing to the union's demands, the company decided to shut down the store and fire the employees.

Coming up next our "Face-Off" on whether President Bush's budget will do anything to cut the massive federal deficit.

(COMMERCIAL BREAK)

PILGRIM: Well, President Bush today faced new criticism over his $2.5 trillion budget for next year. More than 150 programs will be eliminated or slashed under the president's proposal. And that brings us to tonight's "Face-Off.

Joining us from Capitol Hill is Senator Jon Corzine. He says the president budget represents the type of quote, "irresponsibility and dishonest bookkeeping that would make Ken Lay blush." That's a quote.

And Senator Chuck Grassley, on the other hand, says he appreciates the president's effort to cut the deficit. Thanks for joining us.

And so I have to -- Senator Corzine, I do have to start with you. Is that a little bit overstated, or do you think that's fair?

SEN. JON CORZINE, (D) NEW JERSEY: Well, I really think there are two sets of books here. The one presented in the budget plan meets the president's objective over the next 5 years of halving the budget deficit.

Unfortunately, it leaves out some major programs like the cost of the war in Iraq and Afghanistan, the cost of the beginning investment in the privatization of Social Security which the president has made his top priority on domestic. The reform of the alternative minimum tax, which I know Senator Grassley believes has to be addressed. There is the extension of the tax cuts that the president has put down.

All of those things are going to lead to much higher deficits because they are going to erode the revenues and increase the expenditures that we have. So I don't think we're seeing the real product of what's going to happen over the next 5 years.

PILGRIM: Senator Grassley it does leave out Iraq and Afghanistan. Is that OK?

SEN. CHUCK GRASSLEY, (R-IA) FINANCE CMTE. CHAIRMAN: Well, listen, when you appropriate money for things that are going to be one-time expenditures or maybe two-time expenditures and you don't predict the future to know exactly how much you want, you wait until you get there, until you know exactly what you should ask for. But one of the principles of bookkeeping is you don't build into a baseline that kind of expenditures, because it's just an excuse to spend on top of that amount next time.

And so it seems to me this is the most honest sort of budgeting, when you don't put things into the baseline that aren't going to be there forever. And in regard to the tax cut, I think you have to take Greenspan's word for it that the tax cuts were very, very essential to get us out of the recession and to have the revitalization of tax money coming into the federal government that's coming in right now.

And makings those tax cuts permanent is not anything that needs to be budgeted from this standpoint, because it's existing tax policy. Should it be for 10 years or should it be permanent? Everybody believes that permanency and predictability in tax policy is the best way to do that.

PILGRIM: What about Social Security?

GRASSLEY: You are asking me?

PILGRIM: Yes.

GRASSLEY: Social Security won't be an issue unless the president becomes Professor Bush and has a seminar with the American people. And at the Grass Roots convince people that there needs to be changes made in Social Security so our grandchildren and children can have the same programs that we have. And unless we make changes, they won't have.

Unless the president gets that job done, it won't really be an issue here in Congress. Now I want the president to make that jump. And I want to be able to help him get the reforms that he's proposing. Or even if he doesn't propose them, reforms that we know need to be done so that our children and grandchildren can have Social Security.

PILGRIM: Let me talk to Senator Corzine about the president's pledge to cut the deficit in half in the next 5 years. Do you think that's attainable with the current numbers and the current math that's going on?

CORZINE: Well, as I said if you live by the budget numbers the president proposed, I think that's the way the arithmetic works. But the fact is that those very important items that I itemized before, war in Iraq, the president's proposal with regard to Social Security, AMT, extension of the tax cuts, they are left out. And I don't see how those are going to add up.

And I respectfully disagree with Chairman Grassley, who I want to stay on a good side of here, but the fact is is that the president is making proposals of 150 cuts in programs that he has comes to Congress with just as much as he has to come with on the Social Security reform proposal that he's laying down. And so that has to be won in Congress.

I suspect that Chairman Grassley is not going to be too excited about the cut in the farm programs that I see done. I doubt there are going to be Republicans or Democratic Senators going to be happy about the Amtrak cuts that we see up and down that northeast corridor. And there are a whole bunch of governors, which I happen to have a little bit of interest in these days are not going to like the Medicaid cuts. So, those have to be argued out just as much as does the Social Security privatization scheme that the president has put forward.

I don't think what you see is what you are going to get. And as a consequence of all these big charges that are going to come down the pipe that are left out, I think we're going to see high levels of budget deficits for as far as the eye can see.

PILGRIM: Well, in the interest of friendly debate, we have to call it here. Thank you for joining us, Senator Corzine and Senator Grassley. Thanks.

CORZINE: Thank you.

PILGRIM: A new stamp honoring the nation's 40th president went on sale today. Ceremonies were held across the country for the new Ronald Reagan stamp. 170 million stamps were printed and collectors lined up to buy them.

Former first lady Nancy Reagan unveiled the new design last November in California.

Well, here's a reminder to vote in tonight's poll about the marines who received Purple Hearts from noncombat injuries in the war in Iraq. And the question is, "Do you believe the 11 marines that were awarded Purple Hearts should be able to keep their medals? yes or no?" Cast your vote at loudobbs.com. We'll bring you the results in just a few minutes here.

Coming up next, on the road to peace in the Middle East: A leading expert on the latest Israeli/Palestinian cease-fire.

(COMMERCIAL BREAK)

PILGRIM: Dramatic video just in to CNN. In Massachusetts tonight, the Coast Guard rescued three fishermen from a sinking boat. The men aboard the 38-foot boat called Hollywood radioed for help this afternoon saying the boat was sinking. A Coast Guard helicopter brought the men to safety. No one was injured.

Let's turn now to new hope for peace in the Middle East.

Israel says it will soon lift travel restrictions on Palestinians in Gaza and the West Bank following an historic cease-fire agreement. Israeli Prime Minister Ariel Sharon and Palestinian President Mahmoud Abbas declared the truce yesterday at a summit meeting in Egypt.

Joining me now for more on this major development is Danielle Pletka of the American Enterprise Institute. She's in Washington. Danielle, thanks for being here.

DANIELLE PLETKA, AMERICAN ENTERPRISE INSTITUTE: Thanks for having me.

PILGRIM: We've seen so many -- ten cease-fires over the last four years all fail. Where are we here with this truce? Are we in a more hopeful place?

PLETKA: I think we are in a more hopeful place. Don't forget. This is a cease-fire between a new Palestinian leader and an Israeli leader. Mahmoud Abbas is a different man, a man with more integrity than Yasser Arafat. So I think we have reason to be more hopeful, but perhaps not blindly optimistic.

PILGRIM: President Bush has agreed to meet with Sharon and Abbas and he was criticized widely in his first term for not being quite as engaged in the Middle East peace process as many thought he should be. Is he now and do you think that his efforts will be helpful?

PLETKA: I think the president's principle on this remains the same, which is that at the end of the day, peace is between the Israelis and the Palestinians. The United States is not a party to these negotiations. We're just a facilitator. Now there are better people who are involved in this. Yasser Arafat is gone from the scene. The president can afford for the United States to be more involved, to push more. But we have to remember that the peace has to be built between them, one that isn't built between them isn't going to last.

PILGRIM: The big question is whether Hamas and Islamic Jihad will allow this to proceed. What's your expert opinion on that?

PLETKA: Well, I think that certain terrorist groups have already made clear that they are not going to allow this to proceed. Hezbollah is one of them. They pay some of the Al Aqsa Martyrs Brigade's troops that are going to be out there trying to kill people as they always have. Terrorist groups are sustained by the constant murder of civilians. And so I can't imagine they're going to be able to refrain.

PILGRIM: What's your timetable? How soon do you think we'll see results or will this be years?

PLETKA: Well, I hope that we don't go by any timetable. At the end of the day we have got to build on reality, we've got to build on results. And one of the problems we had in the past was that we set artificial deadlines that everybody had to meet willy nilly. This will take years. The real question is, are we going to be able to move solidly forward or is it going to be one step forward, two steps back, five steps back and another disaster on our hands? I'm more hopeful, but we shouldn't set artificial timetables.

PILGRIM: Danielle, I read an op-ed piece that I think is beautifully written that you came up with and it's talking about the position of Europe, vis-a-vis the United States in this process. We have Secretary of State Condoleezza Rice in Europe right now making very conciliatory statements to the Europeans, let's work together, let's turn the page, let's set a new future. Do you think the Europeans and the Americans will be able to work together on this very important issue?

PLETKA: I have no doubt that we'll be able to work together. I think that the Europeans in the United States can work together on a whole variety of issues. Our problems are not agreeing about whether peace is vital in the Middle East or Iran shouldn't have nuclear weapons. Our problems are always when it comes to the end of the game, what should we do about it? The Europeans are always interested in pushing Israel into an agreement that isn't sustainable with the Palestinians and the United States is a little more careful. But I think as we work together, we will be able to be helpful together.

PILGRIM: Thanks very much for joining us this evening. Danielle Pletka.

Let's take a look now at some of your thoughts. Many of you wrote about Carly Fiorina's forced departure as chief executive at Hewlett-Packard. David Marks of Manteca, California writes, "Carly Fiorina once said Americans must realize that they don't have a God- given right to a job. Well, welcome to the unemployment line, Carly."

And Tim Hutchinson of Kennesaw, Georgia writes, "There is a God. American IT workers are dancing in the streets. The only way it could be better would be to hear that her job has been outsourced to India."

And on Social Security, Ron Rhinehart of Mesa, Arizona writes, "Why should Americans now trust their elected leaders in Congress to fix Social Security? They're the ones who stole it from us in the first place. Maybe they can find a way for foreign workers with U.S. jobs to pay into it."

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

Still ahead, the results of tonight's poll and a preview of what's ahead tomorrow.

(COMMERCIAL BREAK)

PILGRIM: Now the results of tonight's poll. 87 percent of you believe that the 11 marines that were awarded Purple Hearts should be able to keep their medals. 13 percent do not. Thanks for being with us tonight. Please join us tomorrow. America's security risks, how vulnerable is our national power grid to a terrorist attack? We'll have a special report on that.

Also tomorrow, the author of "Nuclear Terrorism, the Ultimate Preventable Catastrophe" and the exploding record trade deficit in this country and its devastating impact on American workers.

For all of us here, good night from New York. "ANDERSON COOPER 360" is next.

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