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LOU DOBBS TONIGHT

Democrats Promise New Era Of Bipartisanship On Capitol Hill; Nancy Pelosi Becomes First Woman Speaker Of The House; Major Change At Top Of Intelligence Community; Chinese CNOOC Pledging $16 billion To Develop Iranian Natural Gas Fields; Plans For Tighter Security At Vulnerable Port; Brian Bilbray Interview; Tom Lantos Interview

Aired January 4, 2007 - 18:00   ET

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


LOU DOBBS, CNN ANCHOR: Tonight, Democrats have taken control of the House of Representatives and the Senate for the first time in 12 years. The nation has its first woman speaker of the House.
Will those Democrats live up to their promises to roll back the all but total influence of corporate America and special interests on our Congress? We'll have complete coverage here tonight.

And Democrats say new immigration reform legislation is one of their top priorities. Critics, however, say the Democrats are bent on giving amnesty to millions of illegal aliens and leaving our open borders wide open. One of those critics is Congressman Brian Bilbray. He's among our guests here tonight.

All of that and much more straight ahead.

ANNOUNCER: This is LOU DOBBS TONIGHT, news, debate and opinion for Thursday, January 4th.

Live in New York, Lou Dobbs.

DOBBS: Good evening, everybody.

The Democrats today took control of the Congress, promising a new era of bipartisanship on Capitol Hill. The new House speaker, Congresswoman Nancy Pelosi, declared the new Congress must respond to voter calls for change.

The Democrats say they will take urgent action to help working men and women in this country and end what we call here the war on the middle class. But it is unclear whether the Democrats can overcome the opposition of powerful corporate and special interests and deliver on those promises.

Andrea Koppel tonight reports from Capitol Hill on the shift in power.

Bill Schneider reports from Washington on the issues the Democrats are not putting at the top of their agenda.

Lisa Sylvester reporting on whether the Democrats really will help working men and women in this country.

We turn first to Andrea Koppel -- Andrea.

ANDREA KOPPEL, CNN CONGRESSIONAL CORRESPONDENT: Lou, for the first time in 12 years, it was Democrats in both the House and the Senate who gaveled the Congress to order. And over in House, it was one Democrat in particular who held the gavel, Nancy Pelosi of California. For her, it was an historic moment.

(BEGIN VIDEOTAPE)

REP. JOHN BOEHNER (R), MINORITY LEADER: ... to the first woman speaker in our history, the gentle lady from California, Nancy Pelosi.

KOPPEL (voice-over): It was a day for the history books.

REP. NANCY PELOSI (D-CA), HOUSE SPEAKER: For our daughters and our granddaughters, today we have broken the marble ceiling.

KOPPEL: And surrounded by her grandchildren, with other political pioneers looking on and a couple of celebrities looking down, Speaker Nancy Pelosi became the highest-ranking elected woman in U.S. history. Now just two heartbeats from the presidency.

And she wasted no time putting Mr. Bush on notice on Iraq.

PELOSI: The election of 2006 was a call to change.

It is the responsibility of the president to articulate a new plan for Iraq that makes it clear to the Iraqis that they must defend their own streets and their own security, a plan that makes -- promotes stability in the region and a plan that allows us to responsibly redeploy our troops.

KOPPEL: On the other side of the Capitol...

UNIDENTIFIED MALE: The majority leader is recognized.

KOPPEL: ... the new Senate majority leader made clear Democrats expected the president's new plan on Iraq to bring U.S. troops home. But he didn't say when.

SEN. HARRY REID (D-NV), MAJORITY LEADER: Remove our troops from this civil war.

PELOSI: The House will come to order.

KOPPEL: The images of power gained and power lost were hard to miss. The longest-serving Republican speaker, Dennis Hastert, seemed almost hidden amidst a sea of members.

With her 31-seat majority, speaker Pelosi got down to business right away. Topping her to-do list, passing House rules as soon as this week banning members from receiving gifts and free travel from lobbyists. But first, a conference call with the president.

PELOSI: We're calling to give you the good news that this Congress is now fully sworn in and ready to work with you. GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Well, I'm ready to work with you all. I know it's a tremendous moment for you personally and I congratulate you.

(END VIDEOTAPE)

KOPPEL: But the real legislative business won't begin until early next week. That's when Democrats plan to launch and pass their 100 hours agenda, including everything from boosting the minimum wage to enacting all of the 9/11 recommendations. And all of this, Lou, before the president's State of the Union later this month.

DOBBS: Thank you very much.

Andrea Koppel from Capitol Hill.

Democrats are promising to implement a bold agenda over their first 100 hours. There are some critically important issues the Democrats, however, left out of their priorities.

Bill Schneider has our report from Washington -- Bill.

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Lou, it's not what politicians are talking about. It's what they're not talking about that may be most important.

(BEGIN VIDEO TAPE)

SCHNEIDER (voice-over): There are a lot of things on the House Democrats' agenda.

PELOSI: Passing the 9/11 Commission recommendations; raising the minimum wage; making college more affordable; advocating stem cell research.

SCHNEIDER: What about the Bush administration's two signature policies -- tax cuts and the war in Iraq?

You can argue Iraq was the issue that brought Democrats to power.

Don't they have a mandate to do something about it?

REID: Iraq is where it is. The country is where it is. Iraq is an issue that we all need to work on and we will work on that.

SCHNEIDER: The problem is there's not a lot Congress can do about an ongoing military policy.

SEN. CARL LEVIN (D-MI), INTELLIGENCE COMMITTEE: No one is going to cut off funding to the troops that I know of.

SCHNEIDER: But they can make sure the cost of the war is evident. Democrats say they will no longer treat military spending in Iraq as emergency spending outside the regular budget.

Senate Democratic committee chairmen will hold hearings to look into what went wrong in Iraq and what to do next.

LEVIN: We have to examine whatever the president is going to propose.

SCHNEIDER: President Bush is daring Democrats to challenge his tax cuts.

BUSH: We kept taxes low.

SCHNEIDER: You want to roll back my tax cuts, President Bush is saying?

Go ahead, make my day.

House Democrats are dealing with taxes obliquely, by proposing a new so-called pay-go rule. That means new spending must be paid for by cutting spending on other programs or by raising taxes.

PELOSI: No new deficit spending. That will be part of the rules of the House.

SCHNEIDER: Republicans may not fall for it.

THOMAS MANN, BROOKINGS INSTITUTION: Most Republicans still believe in tax cuts and they want to exempt tax cutting from any so- called pay-go rule, only apply it to spending.

(END VIDEO TAPE)

SCHNEIDER: Some other big-ticket items Democrats are not talking about right now? Well, health care reform, Social Security reform, medical reform.

We haven't heard a lot about immigration reform. Why? Too big, too difficult, too controversial. They want to concentrate on things they can actually get done -- Lou.

DOBBS: And to actually see something done would be inspiring, would it not?

SCHNEIDER: It would be inspiring and, therefore, they're concentrating on things they think can pass and things that may get -- many of them will get substantial Republican support.

DOBBS: Well, give us your professional, analytical forecast. Will they be successful in achieving all of the priorities that they've set out for the so-called first 100 hours?

SCHNEIDER: They will pass the House. But, of course, that's only one step. They have to pass the Senate.

Some of them will. The minimum wage probably in a deal, including some tax cuts that the president wants for small business. But some of them will pass.

And some of them may be vetoed by the president, like funding for stem cell research. And it's going to be tough to override that veto. So, in the end, once you get through this process, in the end, only a few will make it into law.

DOBBS: I suspect at that point the Democratic leadership would be saying to the president, make our day.

SCHNEIDER: Exactly what they would be saying.

DOBBS: Bill Schneider, thank you very much.

SCHNEIDER: Sure.

DOBBS: One of the things the Democrats say they can do is to help ease the many financial burdens of our middle class working families. Working men and women have struggled for years as corporate America has put commercial interests ahead of the national interest and has actually won the political power and legislative power to write bills. But for all the Democrats' bold rhetoric, they may be unable to deliver on many of those promises.

Lisa Sylvester reports from Washington.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Democrats are now steering the country. They're promising to give middle class families what they want, a higher minimum wage, to make college more affordable, and to rid Washington of corrupt lobbyists.

PELOSI: The election of 2006 was a call to change, not merely to change the control of Congress, but for a new direction for our country.

SYLVESTER: But the rhetoric may be easier to deliver than results. Democrats may control both chambers, but the margin is so slim in the Senate, and with a Republican president with veto power, this could be the get-nowhere Congress.

JAMES THURBER, AMERICAN UNIVERSITY: There are many issues where there's going to be deadlock, deadlock within the Senate because basically it's tied. Deadlock between the Senate and the House, therefore, but also deadlock between the president and Congress.

SYLVESTER: The stage is set for confrontation across the board.

On trade, Democrats plan to fight to protect American jobs, replacing free trade with fair trade. Many Republicans, including President Bush, vow to fight additional tariffs.

On kitchen table issues, raising the minimum wage has widespread support, but even that's not a given. Republicans are lobbying for more business breaks in exchange, which could be a deal breaker.

And on immigration, the U.S. Chamber of Commerce predicts victory on passing a guest worker program amnesty for illegal aliens. The chamber's president delicately putting it this way... TOM DONOHUE, U.S. CHAMBER OF COMMERCE: You know, people that oppose guest worker programs are dumb as a box of rocks.

SYLVESTER: That group includes a growing number of Democrats who are listening to concerns of working Americans that inviting illegal workers into the country will drive down wages and dry up good-paying jobs.

(END VIDEOTAPE)

SYLVESTER: House Democrats have a long list of promises they've made to the American people. Senate Democrats have not gone that far. So, as Bill Schneider mentioned, the House could easily pass legislation and claim quick victory, but their proposals might never actually become law -- Lou.

DOBBS: Thank you very much.

Lisa Sylvester.

Thank you.

As the Democrats today took control on Capitol Hill, Bush administration officials announced a major change at the top of this country's intelligence community. The director of National Intelligence, John Negroponte, is to resign. He will become deputy secretary of state.

Separately, reports the president is about to appoint a new ambassador to the United Nations, succeeding outgoing John Bolton.

Ed Henry reports from the White House -- Ed.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Lou, all kinds of shuffling within the administration. White House officials will not confirm it, but various officials say that the president is expected to nominate Zalmay Khalilzad as the new U.S. ambassador to the United Nations. He would leave his post as ambassador to Iraq.

White House officials, meanwhile, are confirming that the president on Friday will nominate retired vice admiral Mike McConnell to replace John Negroponte as the director of National Intelligence. Negroponte then will shift over to the State Department, where he'll be number two to Secretary Condoleezza Rice.

That shift already, though, facing some static from Democrats. The new Senate intelligence chairman, Jay Rockefeller, charging that there's a void of leadership in the intelligence community because Negroponte's former deputy general, Michael Hayden, who is now the CIA director, still months later has not been replaced within the Director of National Intelligence Office.

Meanwhile, the president also looking for a new top lawyer. The White House counsel, Harriet Miers, today saying she's resigning -- Lou.

DOBBS: Ed Henry from the White House.

President Bush today held a conference call lasting nearly two hours talking with the Iraqi prime minister, Nuri al-Maliki. The call scheduled to last only one hour. Their conference comes days before the president is to announce a new strategy for the war in Iraq.

In Iraq, insurgents have killed another of our troops. Two of our troops have been killed in Iraq so far this month.

3,006 of our troops have been killed since the beginning of this war, 22,714 wounded. 10,142 of them so seriously they could not return to duty within three days.

ABC News is tonight reporting North Korea appears to have made preparations for another nuclear weapons test. A short time ago, Reuters news agency reported U.S. intelligence has no evidence at this point of an imminent nuclear test. North Korea has already carried out one such test in October. Intelligence officials say that test may have been a failure.

We, of course, will be watching this story for any developments and we'll be bringing them to you.

Still ahead, a communist Chinese company breaking U.S. law, forming an energy alliance with Iran. So why is that Chinese company still listed on the New York Stock Exchange?

We'll have that special report.

Communist China, other nations have sharply increased their efforts to steal our most sensitive secrets.

We'll have that story as well.

And the Department of Homeland Security rolling out a new program trying to secure our ports.

We'll have that special report and a great deal more straight ahead.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: The U.S. government bars American companies from doing business now with Iran. At the same time, it is opening American capital markets to foreign companies that do business with Iran. And in so doing, they violate American law.

What's being done about it? Christine Romans reports.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): The United States trying to isolate this man. The Chinese doing business with him. State-owned Chinese oil company CNOOC is pledging $16 billion to develop Iranian natural gas fields, flouting American foreign policy and law, undermining Washington's stated goal.

VICTOR COMRAS, FMR. STATE DEPT. OFFICIAL: Cut off the extra flow of funds that were generated by the Iran oil and gas sector so that we could limit their ability to fund terrorism and to develop weapons of mass destruction.

ROMANS: As Iran defiantly pursues its nuclear program, the State Department says, "We think this is a particularly bad time to be initiating major new commercial deals with Iran. We have raised our concerns about this reported deal with the company and the Chinese authorities."

The Iran-Libya Sanctions Act forbids foreign companies that invest in Iran's energy sector from tapping American capital markets. CNOOC is listed on the New York Stock Exchange, one of 33 Chinese companies, many of which maintain ownership by or close ties with the communist government.

REP. ILEANA ROS-LEHTINEN (R), INTERNATIONAL RELATIONS COMMITTEE: Just because they're on the stock exchange here in the United States, just because they have the veneer of being like any old -- good old- fashioned American company, they are not.

ROMANS: The New York Stock Exchange says since no action has been taken against CNOOC, "We don't comment on hypotheticals." But as the Treasury Department aggressively tries to isolate Iran, foreign companies using American capital markets are injecting funds into a country with a long list of dangerous ambitions.

FRANK GAFFNEY, CENTER FOR SECURITY POLICY: Like sponsored terrorism in Iraq, destabilizing that country, taking over Lebanon, building nuclear weapons, buying ballistic missiles, and the like.

ROMANS: CNOOC in Beijing did not answer e-mails seeking comment.

(END VIDEOTAPE)

ROMANS: By law, this proposed CNOOC deal requires the president to launch an investigation to determine which sanctions apply here. Congress also looking into the matter. It's on the top of the agenda for the House Foreign Relations Committee -- Lou.

DOBBS: Thank you very much, Christine Romans.

That brings us to the subject of our poll tonight. Do you believe companies that do business with nations that sponsor terrorism should be allowed to be listed on the New York Stock exchange? Yes or no?

Please cast your vote at LouDobbs.com. The results upcoming.

Tonight, plans for tighter security at one of the most vulnerable ports in our nation's -- parts of our nation's infrastructure. The Department of Homeland Security says it will implement a program designed to provide secure identification for all truck drivers and dock workers at all U.S. ports.

But as Bill Tucker reports, questions remain about just how realistic a March deadline is for this heightened port security.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): By the end of March, the Department of Homeland Security says it will have issued secure identifications to 150,000 workers at the ports of New Jersey and New York. It is a development the regional port authority welcomes. "... we are pleased the program is moving ahead... We have be calling for this measure for some time."

The plan is to roll out the new measures nationally over the next 18 months. As part of this program, all dock workers and truck drivers servicing the docks will undergo lengthy background checks.

Anyone convicted of espionage, sedition, treason or terrorism will be permanently disqualified, as well as those who have been convicted of murder, unlawful possession of explosives, or making threats to a public place. Being an illegal alien will also disqualify a worker.

Other crimes can make a person ineligible such as drug-selling, robbery, sexual abuse. But there is an appeals process for those crimes.

Many trucking companies and port operators were overwhelmed with the program, leaving the International Longshore and Warehouse Union to say, "We don't know the details of this program. The 469 pages of regulations were just published and we are in the process of reviewing them."

And then there is the question of the cards themselves. They're designed to contain biometric identifying data, but there will be no readers at the ports to read the data. The Coast Guard says it will deal with that issue by conducting random checks at ports with mobile card readers.

(END VIDEOTAPE)

TUCKER: And then there's the question of cost. Each card is expected to cost somewhere in the neighborhood of $140 to $160, a cost that right now is expected to be paid by the workers, Lou, and not by the companies.

DOBBS: The charade that we call homeland security continues. This, however, is an important step, it seems to me. And one that should have been taken, one would think, long ago.

TUCKER: Yes. It is a big step, and a lot of people acknowledge that there are problems, and hopefully they will be worked out as they begin rolling out implementation.

DOBBS: Something less than the five years it's taken to this point.

Bill Tucker, thank you very much.

Coming up next, foreign spies stepping up their efforts to steal U.S. secret defense technology. We'll have a report on which nations are behind the espionage.

A congressman at the forefront of the battle against illegal immigration taking his top stand into the new democratically- controlled Congress. Congressman Brian Bilbray joins us here.

And the lab that tests and certifies those e-voting machines, well, it has a few problems of its own. We'll have a report now on the latest threat to e-voting.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Foreign spies tonight are increasing their efforts to steal American technological secrets. A Defense Security Service report saying there is a surge in espionage activity from Asian countries, and some reports saying communist China is leading the way.

Kathleen Koch reports.

(BEGIN VIDEOTAPE)

KATHLEEN KOCH, CNN CORRESPONDENT (voice-over): Espionage attempts aimed at sensitive U.S. defense technology have shot up 43 percent over the last year. That finding in a new report by the Defense Security Service counterintelligence office.

Space systems, lasers and missile and radar-evading stealth technology were in greatest demand.

GAFFNEY: I'm quite concerned that the technology that this country relies upon for its national security is being steadily eroded and compromised by enemies, actual or potential.

KOCH: And East Asian and Pacific countries are the biggest suspected thieves. The study found they account for a third of all spy attempts. The Near East is next at 23 percent, followed by Eurasia at 19 percent. And South Asia at 13 percent. Africa and the Western Hemisphere count for 11 percent.

The 29-page report doesn't accuse specific countries. But China, followed by Russia and Iran, are often cited by U.S. officials as the top spy threats to the United States.

GAFFNEY: It allows them to get up the proverbial learning curve far faster to avoid costly and time-consuming mistakes and to focus their energies on improving on our designs rather than having to come up with them in the first place themselves.

KOCH: The study is based on suspicious foreign contacts reported to the government by defense contractors and other defense-related sources. It says operatives in some cases made simple verbal requests for classified information. Other methods, trying to buy controlled technology. Spying while visiting U.S. companies, offering marketing services to contractors.

UNIDENTIFIED FEMALE: I don't know how to say good-bye.

KOCH: Some cases were right out of James Bond, like a female spy who seduced a translator to learn his password and access his computer network.

(on camera): As to the surge in spying by East Asian and Pacific nations, the report predicts that will only worsen as those countries continue to wrestle with technology shortfalls in their weapons developments programs.

Kathleen Koch, CNN, the Pentagon.

(END VIDEOTAPE)

DOBBS: Time now for some of your thoughts.

Diane in Oklahoma said, "While watching the many tributes to President Ford these past few days, honoring a good man who served his country in tough times, I couldn't help but wonder why our 3,000-plus fallen heroes in the current war receive so little attention when their caskets return home."

Ben in Oklahoma, "I have no faith that either party will heed the will of the majority of U.S. citizens when it comes to securing our border."

And Joy in California, "It takes U.S. citizens 10 years of paying into Social Security before any benefits are paid. And now they want us to pay illegals after 18 months? What kind of nightmare are we living in?"

Send us your thoughts to LouDobbs.com. More of them coming up here later.

Each of you whose e-mail is read here receives a copy of my book, "War on the Middle Class."

Up next, the Democrat who becomes the next chairman of the House Foreign Affairs Committee joins us. He promises to investigate a $16 billion oil deal between communist China and Iran. Congressman Tom Lantos is our guest.

California Republican congressman Brian Bilbray's district faces illegal immigration issues each and every day. The congressman vowing to continue to fight illegal alien amnesty and for border security.

Finally, a government office created to monitor electronic voting in this country admits potential security concerns for e-voting software. We'll tell you what they're doing about it.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Our top stories, Democrats have taken control of the House of Representatives and the Senate for the first time in 12 years. The nation has its first woman speaker of the House, Congresswoman Nancy Pelosi. In her first speech, Congresswoman Pelosi called for a new era of bipartisanship. Democrats are promising a bold agenda of reform over their first 100 hours.

Tonight, new concerns about the integrity of our nation's e- voting systems. Federal regulators say a major testing laboratory for electronic voting machines came up short in a preliminary review, the Electoral Assistance Commission finding that documentation and lab procedures didn't meet federal standards.

Watchdog groups say the lab in question, Colorado-based Ciber, tested software for voting machines used in 42 states in the midterm elections. The EAC knew about the problems in August but said nothing.

(BEGIN VIDEO CLIP)

DONETTA DAVIDSON, ELECTION ASSIST. COMM.: You don't really post preliminary findings until the process is done. When you're in a process, you want to do the findings at the end. If they don't meet the requirements at the end, obviously we'll post that.

(END VIDEO CLIP)

DOBBS: Critics are outraged at the testing problems that could leave e-voting systems vulnerable to security breaches weren't disclosed. They say this highlights the risk of a certification process that is both secretive and has too little federal oversight. The company, Ciber, did not return our calls for comment.

Republican Vern Buchanan, Republican of Florida, was among those sworn in to the 110th Congress today. But the congressional leadership has made it clear his seating is provisional. Buchanan's victory over Democrat Christine Jennings is being challenged in court and is also the focus of a congressional investigation.

That controversy involves e-voting machines and some 18,000 ballots that did not record votes for the House seat in November. Those votes could have changed the outcome of the election.

The head of one of the nation's most sensitive security branches has resigned under pressure. Ambassador Linton Brooks is chief of the National Nuclear Security Administration. Energy Secretary Samuel Bodman said he asked Brooks to resign because of management problems, such as the recent breach of security at Los Alamos National Laboratory. The energy secretary says the agency under Brooks simply hasn't done enough to protect the security of the American people.

The privacy of U.S. mail protected by law, but President Bush may have changed all that. When the president signed a postal bill last month, President Bush added a signing statement that appears to loosen the rules.

President Bush authorized the opening of mail for reasons of public safety and the collection of foreign intelligence. The ACLU is investigating what that means exactly, whether it's already been used, in fact, to open our mail.

Amazon.com's founder Jeff Bezos entered the commercial space race. Bezos released video of the launch vehicles test site on his company's Web site. The spacecraft climbed about 295 feet before it landed. Bezos says his goal is to lower the cost of space flight to make it more accessible for private exploration in the long-term. Bezos joins a small group of private entrepreneurs trying to break government monopolies on space exploration.

A spectacular light show east of the Rockies has snow-bound citizens there thinking what will happen next? Thousands of people saw what appeared to be a meteor breaking up early today. But the U.S. military says it was actually a Russian rocket reentering the atmosphere. Officials are looking into reports that a piece of the rocket landed in Wyoming.

And the U.S. Border Patrol tonight is reporting one of its observation posts on the Arizona-Mexico border was approached by unknown gunmen. The site in the Rust Desert District, was approached late last night. The site is manned by National Guard troops who, according to their policy, withdrew.

The Border Patrol would not say whether any shots were fired. No guardsmen were injured in the incident, and the gunmen fled back into Mexico. The area where the incident took place is a known drug smuggling corridor.

A strong advocate in the fight against illegal immigration, Congressman Brian Bilbray easily won reelection to the House. His victory came in his California district that deals with the illegal immigration crisis every day. And though the new Congress is expected to push through an amnesty agenda for illegal aliens, Congressman Bilbray says he'll stand his ground. The congressman joins us tonight from Washington.

Congressman, good to have you with us. It's quite a different world there, isn't it, than the one you left?

REP. BRIAN BILBRAY (R), CALIFORNIA: Well, it's an honor to be with you and, yes, it's a brave new world but it's a world of challenges and opportunities.

DOBBS: Now in the minority party, Congressman, there isn't really much you can do about illegal immigration or border security, is there?

BILBRAY: Oh, absolutely there is. I just finished talking to Sylvester Reyes who's actually going to be a new chairman about a bill that he has, about making it a very simple system, working with David Dreier at cracking down on the source of illegal immigration. That's illegal employment of illegals. And so all we do is we shift from one chairman to the other. But the strategy should be the same and that's defending our national community -- I mean our local communities from overseas influences.

DOBBS: The fact is that a couple of Republican Congressmen -- so-called hardliners, J.D. Hayworth, John Hostettler, for example, as you know -- lost the election. Many of the savants and pundits say that they were too hardline on the issue of illegal immigration. What's your take?

BILBRAY: First of all, every one of those -- Lou, every one of the opponents of those two members actually said that they were hardliners on stopping illegal immigration than the Republican candidates. And the Democrats ran on getting tough. They actually ran on the fact that the Republicans hadn't done enough to control it.

The other side, too, is that for every member of -- Republican that lost that was strong on immigration control, there was five or six Republicans who were soft on it that lost the election.

So if you look at the Northeast -- and I'm not going to name names -- but everybody knows who in Pennsylvania and Connecticut and New York that wasn't really standing up on the immigration issue, that the voters took them to task for it and blamed the Republicans for not doing more.

And I think the real issue was not doing more at cracking down on the employers and allowing the Chamber of Commerce to dictate the Republican policy on national security and immigration control rather than the American people.

DOBBS: Congressman, one of my favorite comments emanating today from Washington came not from anyone in government, in point of fact, but rather someone who influences government, tries to every day, Tom Donohue, the head of the U.S. Chamber of Commerce. I would just like, if we could, to hear his comments again on a guest worker program.

(BEGIN VIDEO CLIP)

TOM DONOHUE, PRES., U.S. CHAMBER OF COMM.: Oh, it's going to pass and it's going to pass sometime in the next -- when we get an immigration bill done because the shortage of workers is getting critical and it's, you know, people that oppose guest workers programs are dumb as a box of rocks.

(END VIDEO CLIP)

DOBBS: How do you stand on guest worker programs?

BILBRAY: Well, is he talking about a guest worker program where people from out of the country come into the country legally and get permitted to come here and work for awhile and then go home, or is he really talking about the amnesty program of allowing those who are illegally here to be rewarded for breaking the law and being officially endorsed for their illegal activity and then given citizenship? That's the big question to him, and we'll decide who's dumb as a rock as we decide, are you willing to stand up for enforcing the law and not rewarding those who broke it, and are you willing to stand up for those who have not broken our immigration law who wait patiently in other countries to come here, work, do the kind of work that the chamber says they want done and then go home, not get citizenship, not get Social Security, not get -- earn income tax credit and not get job security that's far beyond what legal U.S. citizens are allowed?

That's the challenge for the chamber. Are they really for a guest worker program or is this their way of trying to reward themselves and the people that are profiteering from illegal immigrants that are their members, that the employers who have been hiring illegals behind our back for the last 20 years.

DOBBS: Congressman Bilbray, thank you for being here.

BILBRAY: Thank you for doing everything you've done, Lou.

DOBBS: Coming up next here, the incoming chairman of the House Foreign Affairs Committee. He's outraged that red China would pop $16 billion in to the economy or Iran. Congressman Tom Lantos joins us.

And President Bush considering sending more troops to Iraq. I'll be talking with a former military leader about whether he thinks there should be even more American boots on the ground. Stay with us.

(COMMERCIAL BREAK)

DOBBS: A second aircraft carrier is headed to the Persian Gulf this month as a warning to both Iran and Syria. The USS John C. Stennis and its support ships will be deployed to bolster the aircraft carrier group already on station already in the Gulf. The move is, we're told, intended to show U.S. resolve in the face of possible provocative acts by either Iran, or Syria or both.

Communist China making ominous moves around the world, trying to spread its influence. This time it is Iran. A controversial $16 billion deal to develop Iran's national gas resources, a deal with a terrorist state with nuclear ambition.

My guest tonight is Congressman Tom Lantos. He's the incoming chair of the House Foreign Affairs Committee.

And Mr. Chairman, although not official yet, welcome. Good to have you here.

REP. TOM LANTOS, (D) CALIFORNIA: It's good to be here, Lou.

DOBBS: With the proscriptions against doing business with Iran, under the Iraq -- Libyan legislation that is the Iran Freedom Support Law, how can this be permitted to go unnoted and without response?

LANTOS: Well, you're absolutely right. We have a law on the books and it's up to the administration to fully enforce it. Next week I am calling Secretary Rice to get an assurance from her that sanctions will be imposed on China if China goes ahead with its plan to put $16 billion into Iran, which obviously will be used, at least in part, to develop nuclear weapons.

The administration has a legal obligation to place sanctions on Iran. This has not been done in the past. And I will insist that it be done. And if the answer is unsatisfactory, I will hold early hearings on this subject.

DOBBS: But will you also consider whether or not the administration, as required by law, irrespective of its powers permitted under that law to ultimately waive sanctions -- it is required under law to begin an investigation immediately. Will you also be looking into when that investigation begin -- began, whether it began at all?

LANTOS: Absolutely. And I will seek assurance from the secretary of state that the sanctions will not be waived. We simply cannot allow China to supply Iran with billions of dollars to be used for the development of nuclear weapons.

DOBBS: As chairman of the House of Foreign Affairs Committee, Congressman Lantos, one of the great voids, some would argued many voids, in U.S. foreign policy has been focus and clearer strategy in the Western Hemisphere -- moving, if I may, quickly from the Middle East. But Central and South America have been all but ignored in the minds of many by this government. Are you going to, as well, focus on that issue?

LANTOS: One of our highest priorities will be developments in our own hemisphere. The most serious problem, obviously, is Venezuela, where Hugo Chavez goes out of his way to insult and to attack the United States. But there are other governments also which are moving in a far left direction. And we will be focusing on this issue early on.

DOBBS: Let's turn to the 100 hour priorities of the Speaker. Nancy Pelosi wants a great deal accomplished in quick order. Are you confident that she and the Democrats will be successful in the House and then ultimately in the Senate?

LANTOS: Well, let me divide the two issues. I am convinced that Speaker Pelosi will be totally successful in achieving the goals that she outlined in the House. What will happen in the Senate is a more difficult question because the Senate is very narrowly divided. And there is always the danger of a presidential veto.

But Nancy's promise was to get these things done in the House and I'm convinced she will succeed.

DOBBS: The speaker talked about bipartisanship. She talked about partnership. The president, some would argue about six years late, started talking about bipartisanship with some gusto this week. Do you think that bipartisanship can succeed, that there can be partnership between these two parties and truly develop constructive legislation and resolve many of the problems and issues that are confronting the country? LANTOS: Lou, I truly do. My good friend and the former chairman of the House Foreign Affairs Committee -- Henry Hyde and I work together hand in glove on a broad range of issues, including this most significant historic piece of legislation, providing for nuclear cooperation in the civilian field with India.

When this was proposed, many thought it would not have a ghost of a chance. We worked together on a bipartisan basis. We led the way and we passed the legislation. The Senate followed and the president signed the legislation.

I will do my utmost, wherever possible, to work in a bipartisan fashion. What is at stake is the fate of the United States, both in terms of military problems, in terms of our prestige, our reputation. We are going through a period where the U.S. prestige is at a low point historically. And my number one task will be to increase global respect for the United States and cooperation of friends and allies.

DOBBS: Tom Lantos, congressman -- Democratic Congressman, California, 26 years in the House, the only Holocaust survivor serving in the U.S. House.

And it is our delight to have the opportunity to talk with you. We wish you all the best.

LANTOS: Thank you, Lou. I appreciate it.

DOBBS: Thank you.

A reminder now to vote in our poll. The question is, do you believe companies that do business with nations that sponsor terrorism should be allowed to be listed on the New York Stock Exchange? Yes or no. Cast your vote, please, at LouDobbs.com. We'll bring you the results here in just a matter of moments.

Coming up at the top of the hour, "THE SITUATION ROOM" and Wolf Blitzer -- Wolf.

WOLF BLITZER, CNN ANCHOR: Thanks very much, Lou.

There's a power shift going on in Washington. Democrats taking over. But will they make a move to bring the war in Iraq to an end? We're covering all the angles of the story. Congressman John Murtha among our guests.

On of the world's most wanted men, in a rare interview speaking out about the last time he saw Osama bin Laden.

Plus, addiction to painkillers and moments of paranoia. The secret life of a Supreme Court justice. We have that story.

And what happened to winter? A toasty season has some scientists ringing alarm bells about global warming.

All that coming up right here in "THE SITUATION ROOM" -- Lou.

DOBBS: Wolf, looking forward to it. Thank you.

Next, I'll be talking with retired General David Grange about what we could possibly gain by sending more troops to Iraq.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: President Bush has, again, just said that he will announce a new strategy for Iraq next week. President is rumored to be sending as many as 40,000 of our troops to Iraq. President Bush says, however, he's not made a final decision on that strategy. The president making those remarks at the White House, meeting there with German Chancellor Angela Merkel.

General David Grange joins me now. General, let's talk about phased redeployment, surge, and the language that is starting to be invented around the crisis that is Iraq. What do you make of it?

BRIG. GEN. DAVID GRANGE (RET), CNN MILITARY ANALYST: Well, why don't we use the word reinforce what we have there in order to try to win this thing.

I think right now, just keeping a lid on it with just small offensive operations, keeping a lid on it while we train Iraqi forces up, which is necessary, but knowing that half of them are not going to be loyal to the elected government, I think that troops need to be sent more to take the offensive, the fight to the enemy. For instance, Anbar province, and also the militia -- the core militia units, and take them down.

DOBBS: General John Abizaid is out. General Casey likely is at the end of, we are to believe, the word within the Pentagon itself, as well as the White House -- the unofficial word.

The general staff at this point saying that they believe that they can have all of the Iraqi authorities in charge of each of the provinces by the end of this year. Do you believe that, and secondly do you believe that means we can see substantial reductions in U.S. troops?

GRANGE: I don't believe it, for the following reason. You're not going to have the loyalty of the Iraqi military that's trained up in the numbers you need to take down places like -- to secure places like Anbar province and Baghdad in those particular areas.

So I think that -- it reminds me of the final days of Vietnam. I was there as an adviser. And you're kind of left out there on your own when you start withdrawing before the areas are secure. And so what you have to do, I believe, is to have the resolve to take the offensive and take down some of these place that we know are our opponents that are sponsored by Iran, for instance. Otherwise, we're going to leave in a defeated way.

DOBBS: Leave in a defeated way. But the president has said for the first time after years of saying that we're winning, has finally acknowledged that we are not winning and we're not losing. Is it, do you think, within the capacity of this Pentagon, this general staff and administration to come up with a victory, or is in point of fact, victory no longer an option in the thinking of any of the leaders, either military or civilian?

GRANGE: Well, the leaders I know, victory is always an option. And I think that it can be won.

Right now, it's a holding action. It can be won. I think it does require a surge. I think we have to draw some red lines for Iran. You know, our enemy are looking at this thing as a regional conflict. We look at it as a conflict within Iraq. And we have to actually take some action in the region -- if nothing else, just warn, put a finger in the eye of Iran, say, stay out of it or you're going to suffer the consequences. I mean, we're not going to win unless we take it on that way. And, yes, victory can be had.

DOBBS: General David Grange, thank you.

Coming up next, the results of our poll, more of your thoughts. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Now the results of our poll tonight: 94 percent of you do not believe companies that do business with nations that sponsor terrorism should be allowed to be listed on the New York Stock Exchange; 6 percent disagree.

Time now for more of your thoughts.

Paul in Ohio -- "I have an idea to keep the two border agents out of prison. Have them move into that church that's protecting the illegal alien from being deported. The government doesn't seem to want to enter that church."

And Ronald in Wisconsin -- "Dear Lou, like many Americans, I also called the U.S. district attorney and President Bush's office related to the irresponsible handling of the Border Patrol agents Ramos and Compean. But then, Lou, I had this thought. I'm calling the wrong offices. I should be calling President Felipe Calderon in Mexico, since he's in charge of Washington policy. Do you have his number?"

Well, we do, but we haven't been able to get through on that line, so maybe you'd like to try another.

Lisa in Minnesota -- "Lou, how can anyone in Washington, D.C. even consider paying Social Security benefits to illegal aliens? What do these people in Washington represent?"

And Lucy in Illinois wrote my favorite email of the evening. She has the most important and sensible response to all the furor over Congressman Keith Ellison's choice to be sworn in using the Koran. She writes -- "Dear Lou, our do-nothing legislators make me mad as hell. Yet again, they waste time and energy on what book a new legislator should use for swearing-in ceremony. Instead of the Bible or the Koran, why not make all of them swear on the U.S. Constitution? Perhaps they'll be more inclined to actually perform their constitutional responsibilities."

We love hearing from you. Send us your thoughts at LouDobbs.com.

Thanks for being us with tonight. Join us here tomorrow. Among our guests, the Reverend Jesse Jackson. We'll be talking about a new urban policy: Trying to create jobs, help working men and women.

Please join us. For all of us here, thanks for watching. Good night from New York. "THE SITUATION ROOM" begins now with Wolf Blitzer -- Wolf.

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