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Credit Card Debt; Iraq Plan Draws Fire; Iranian Advisors Targeted; Immigration Troubles

Aired January 27, 2007 - 18:00   ET


RICK SANCHEZ, CNN ANCHOR: I'm Rick Sanchez with a look what's happening in the news for you. Another deadly day in Iraq. Three U.S. soldiers killed today. Seven since Thursday. Roadside bombs blamed for all. Other attacks today have left 16 people dead. And police report finding 40 bodies in various places in Baghdad.
In Washington today, a massive protest against the war in Iraq. Tens of thousand crowded the National Mall and marched on the Capitol. Crowds heard several speak out against the war including actresses Susan Sarandon and Jane Fonda. Straight ahead on CNN a backlash within the Republican Party over President Bush's controversial Iraq War plan. This is Lou Dobbs bringing you this report. Then tonight at 10:00, teen sex. Should it somebody criminalized? A CNN special. I'll bring it to you then.

LOU DOBBS, CNN HOST: Good evening, everybody. Tonight, communist China accelerating its rapid and dangerous military buildup. Beijing can now destroy critically important U.S. satellites. Two of the world's leading authorities on China's challenge to the United States join us. And was there a government cover-up in the case of two U.S. Border Patrol agents sent to prison for doing their jobs?

Agents Compean and Ramos shot a Mexican drug smuggler who was in the country illegally who was then given immunity by the U.S. Justice Department to testify against them. Congressman Michael McCaul is demanding answers of our government. He is our guest. All of that, a great deal more straight ahead here tonight.

ANNOUNCER: This is LOU DOBBS THIS WEEK, news, debate and opinion this Saturday, January 27th. Here now, Lou Dobbs.

DOBBS: The Bush White House tonight faces new political challenges over its conduct of the war in Iraq. Democrats are planning to begin a debate in the full Senate on the president's plans to send 21,000 more of our troops to Iraq. Congressional Democrats are determined to block that plan.

Some Republicans also oppose the president. But they disagree on the political tactics they should use to challenge the White House. Dana Bash reports from Capitol Hill. Dana?

DANA BASH, CNN CORRESPONDENT: Lou, Democrats announced the very first vote on a resolution opposing the president's Iraq plan will be as early as this Tuesday, and it will be the most spirited and confrontational debate on Iraq since the war began four years ago. What's most stunning about it is it's not necessarily because Democrats now control Congress, it's because there is so much Republican opposition to the president's plan.

The Democratic leadership is pushing a resolution that the Senate Foreign Relations Committee approved on Wednesday with one GOP vote which says it's not in the national interests of the United States to increase troop levels in Iraq. There's a second resolution that was proposed by an influential Republican, John Warner of Virginia, which also disagrees with that president's plan to send more troops to Iraq but does so with less confrontational language.

Now all this has left the White House and its allies on this issue scrambling to find a way to blunt the political impact of these votes condemning the president and his new policy. The leading idea how to do that comes from one of the most vocal supporters of a troop increase in Iraq, that's Senator John McCain, a presidential candidate with a lot at stake politically for this to work.

McCain is working on a resolution to establish benchmarks to make sure the goal of the Iraq strategy is met with what he hopes will appeal to Republicans who don't necessarily want to be condemn the president but are still quite skeptical of this plan.

But the bottom line is the White House has had meetings with well over 100 lawmakers on both sides of the aisle and not had very much luck at all changing any minds. So White House officials, officials here on Capitol Hill who are allied with the White House understand they tell us that the best hope they have right now is to come up with some kind of alternative resolution to blunt the political damage that these votes could have on the president and his Iraq strategy. Lou?

DOBBS: Dana Bash reporting from Washington.

President Bush says he's determined to move forward with his plan to send more troops to Iraq. No matter what Congress says, the president is saying quote, "I'm the decision maker," about deploying those reinforcements.

President Bush also announced a new strategy to stop Iran from helping insurgents in Iraq. Suzanne Malveaux reports from the White House. Suzanne?


SUZANNE MALVEAUX, CNN CORRESPONDENT (voice-over): Well, Lou, national security officials confirm that the Bush administration has now authorized the U.S. military to not only capture but kill Iranian agents inside of Iraq. This of course if there's actionable intelligence that those agents are plotting or planning to attack American forces, Iraqi forces or coalition forces. This is a dramatic change in policy, a get tough policy against Iran.

Now, there have been many discussions we've learned since the fall involving the president, top officials at the State Department, the Pentagon and intelligence, all debating this policy, but it was just within the last few months President Bush signed off on this be because of the deteriorating conditions on the ground in Iraq. It has already caused a number of questions to be raised, controversial questions and issues whether or not this is going to actually provoke Iran or even make things more tense and more difficult between the American, Iraqi, as well as the Iranian governments.

President Bush addressing that this week.


GEORGE W. BUSH, PRESIDENT: It just makes sense that if somebody's trying to harm our troops or stop us from achieving our goal or killing innocent citizens in Iraq, that we will stop them. It's an obligation we all have is to protect -- is to protect our folks and achieve our goal.

Now, some are trying to say because we're enforcing -- helping ourselves in Iraq by stopping outside influence from killing our soldiers or hurting Iraqi people that we want to expand this beyond the borders. That's a presumption that simply is not accurate.


MALVEAUX: Officials say another reason for this capture or kill policy is to send a clear signal to Iran that the Bush administration is getting much tougher. It wants to weaken the Iranian government to get it to try to comply to give up its nuclear program.


DOBBS: Suzanne Malveaux reporting from the White House.

The Senate has confirmed the president's nominee to be the next commander of our troops in Iraq. Lieutenant General David Petraeus. Senators confirming by 81 votes to zero. General Petraeus is the army's leading authority on counter insurgency, he is replacing General George Casey who has been nominated to be the next army chief of staff.

The first U.S. reinforcements sent to Baghdad are expected to joint fight against insurgents over the next few days. U.S. and Iraqi troops have been fight something less than a mile from the supposedly secure Green Zone. The fighting illustrating again than Iraqi troops are still incapable of battling insurgents without U.S. support. Arwa Damon reports from Baghdad.


ARWA DAMON, CNN CORRESPONDENT (voice-over): This is where the battle for Baghdad was fought, out of apartments and high rise buildings that lined this major Baghdad thoroughfare. Listen carefully as the U.S. troops spot an Iraqi insurgent in a nearby building.

UNIDENTIFIED MALE: You can see the corner of a building. Sun light, right? They run between there and that blue door. See, there they go.

DAMON: The insurgents are so close the Americans can see them without bin binoculars.

UNIDENTIFIED MALE: There you go, there you go. That's a money maker right there.

DAMON: That are material was shot by a Pentagon camera crew. At another building nearby, we had a different vantage point.

We arrived on this rooftop near Baghdad's Haifa Street seven hours into the battle. The American troops side by side with their Iraqi counterparts are being fired at from one of those high rises in the foreground. American Apache helicopters circle the building repeatedly to trial to get a clear shot at the insurgents inside, but they can't. So the target building's coordinates are radioed to a site far from Haifa Street and that's when it happened.

A precision guided U.S. missile fired from a site unseen levels the building where the insurgents were hold up. As soon as the building falls, the insurgent guns go virtually silent. Just the occasional shot here and there.

It's a reminder that the Iraqi Army still needs the United States military.

(on camera): Across the river from Haifa Street, another Stryker Battalion is also fighting alongside Iraqi forces in yet another Sunni stronghold. The aim there as it is here, to disrupt the insurgency so that eventually other troops can come in to clear, hold and rebuild.

(voice-over): Some of the Stryker armored vehicles leave, some of them stay to help Iraqi troops hold the ground for another day. Arwa Damon CNN, on Haifa Street in Baghdad.


DOBBS: Nearly 3,100 of our troops have been killed in the war in Iraq, 23,114 of our troops wounded since the beginning of the war, 10,278 of them so seriously they could not return to duty within three days.

As the fighting in Iraq intensifies, our troops in Afghanistan are preparing to face a new offensive by radical Islamist terrorists. President Bush this week ordered a temporary increase in the number of troops in Afghanistan as well. The military will extend the deployment of an entire infantry brigade, more than 3,000 troops, by up to four months.

The president also asking Congress for nearly $11 billion more to fight the war in Afghanistan. U.S. and NATO commanders expect radical Islamists to launch a new offensive in Afghanistan in the spring.

Still ahead here, one state governor is sending National Guard troops to our southern boarder with Mexico to do the work that the federal government has refused to do. We'll have that report and communist China launching a new challenge to U.S. military superiority and interests around the globe. That challenging in space.

We'll have that report and two leading authorities on China's rising challenge to the United States. They'll be with us.

And as the political battle over the war in Iraq escalates, three of the country's leading political commentators and strategists join us as well, the Reverend Jesse Jackson, Georgette Mosbacher, Errol Louis. Stay with us.


DOBBS: Once again, individual states taking action to protect our borders because the federal government will do nothing. Texas is sending an additional 600 National Guard troops to the border with Mexico. They're going there to work with Border Patrol and law enforcement units. Texas already has 1,700 of its guardsmen at the border and apparently, these new troops will be prepared to actually arrest and capture illegal aliens and drug smugglers. Unlike other National Guards deployed to the border. Casey Wian has the report.


CASEY WIAN, CNN CORRESPONDENT (voice-over): Texas Governor Rick Perry is deploying 12 armed National Guard platoons, about 600 new troops to highly trafficked crossing points along the Mexican border. Each platoon will be accompanied by a border patrol agent and a local police officer.

Border law enforcement officials welcomed Governor Perry's help because the violence from warring Mexican drug cartels is spilling over to the U.S. side.

SHERIFF LEO SMANIEGO, EL PASO COUNTY, TEXAS: We know it's a federal problem. But we can't just sit, you know, sit back and wait for Uncle Sam to do something about it.

WIAN: The Border Patrol says the National Guard has helped reduce illegal alien and drug smuggling. Apprehensions are down 34 percent since the guard arrived on the border. But there are new concerns about orders preventing the guard from arresting anyone. A prime example the confrontation between Tennessee National Guard troops and four or five heavily armed men who crossed the Arizona border earlier this month. The national guardsmen retreated after the illegal border crossers came within 35 feet of their post. The guard troops called the Border Patrol, allowing the paramilitaries to escape back to Mexico.

WARDE NICHOLS, ARIZONA STATE HOUSE: They weren't following the protocol of normal coyotes that are smuggling humans across the border, with Kevlar vests, night vision goggles. We don't know if they were terrorists checking the line to see what the National Guard would and wouldn't do. I think we're more at risk today than we were two weeks ago with the actions taken by the National Guard on the border.

WIAN: Nichols' Arizona Homeland Security Committee will question National Guard officials about the incident and about the guard's rules of engagement at a hearing next week.


WIAN (on camera): Also next week, the Tennessee guard troops will actually receive an award for following orders and retreating during the confrontation. A growing number of border lawmakers want the orders changed so the guard can actually apprehend illegal border crossers.

DOBBS: This is incredible, Casey. Actually giving National Guard troops an award for simply following orders?

WIAN: And it's an order that a lot of National Guard troops are uncomfortable. So many, in fact, when the guard was first deployed to the border we had commanders tell us many refused the deployment because they would not be able to fire if necessary to apprehend illegal aliens and in many cases would not be armed.

DOBBS: This is one of the most disgusting things that could be asked of anyone serving in the National Guard and being asked to serve in what is a war zone. It is the drug cartels have rendered our southern border with Mexico that. It seems to me to be absolutely unconscionable. Do you think anything is going to be done about it?

WIAN: Well, there is something being done for a change on the south side of the border. New Mexican President Felipe Calderon has sent in federal troops to try to combat corrupt police officers in Tijuana and it's also been done in Nuevo Laredo.

Actually, Mexico seems to be taking the border violence situation more seriously than the United States does, Lou.

DOBBS: Let's hope that that at least on the Mexican side of the border that that trend continues and perhaps we can also hope that the trend on this side of the border will reverse.

Casey, thank you very much. Casey Wian.

Republicans in the House are preparing to fight president's so- caused comprehensive immigration reform legislation that is now being pushed by the Democratic leadership of this new Congress. But congressman who believe in strong action to strengthen borders and to stop illegal immigration are facing a tough fight. And they are offering a pretty good fight of their own as well.

Lisa Sylvester reports.


LISA SYLVESTER, CNN CORRESPOPNDENT (voice-over): President Bush is facing an all-out revolt in his party. Mainstream Republicans are abandoning him. Not over the war, but on immigration.

REP. ED ROYCE, (R) CA: Once again, we see that the president is pushing amnesty and doing it without any thoughts about how we're going to fix the current system.

SYLVESTER: Republican Congressman Sam Johnson called the White House ideas "empty and implausible."

BUSH: We should establish a legal and orderly path for foreign workers.

SYLVESTER: In his State of the Union address, President Bush reiterated a plan to give millions of illegal aliens citizenship and to create a guest worker program.

The applause came from the Democratic side. Republicans say no matter how the White House dresses it up, giving green cards to illegal aliens is amnesty. And unfair to those who waited in line.

REP. TOM TANCREDO, (R) CO: They're suckers. That's the message you send when you give people who are here illegally amnesty. Even when you say, you have to pay a fine and learn English because frankly if that's the case if that's the way we do it, why don't we just say wherever you are in the world, send us a check. We'll send you a card.

SYLVESTER: Senator Ted Kennedy will introduce a comprehensive amnesty bill in the Senate this spring, but the battle is on the house side. Democrats have a solid majority. However, it includes a number of conservative Democrats who oppose the president's plan.

STEVE CAMAROTA, CENTER FOR IMMIGRATION STUDIES: In the House, assuming that 80 percent of Republicans continue to oppose the president's amnesty, if they get about 40 or 50 Democrats, and they might, to oppose it as well, then it will stop.

SYLVESTER: The illegal alien amnesty debate has created strange political dynamics. Democrats are aligned with and supporting a Republican president. Republican lawmakers are working to defeat the Republican president's proposals.


SYLVESTER (on camera): Most Republican lawmakers feel the president is just completely tone deaf on this issue because he's pandering to special interests. Corporate America looking for cheap labor and Hispanic activist groups pursuing ethnic interests. While both Democrats and Republicans seek Hispanic votes. Lou?

DOBBS: Lisa, thank you very much. It is truly, as you put it, the dynamics, the politics in this are breathtaking. And I think people are awakening to what is really going on here in terms of illegal alien amnesty and open borders as all of these people seem to be serving corporate or socio-ethnocentric mass masters.

SYLVESTER: Indeed they are, Lou. They certainly have a perspective on this issue. And they've been lobbying hoping that this Democratic Congress will listen. But of course we've got the Republican lawmakers, that as you mentioned, they are putting up quite a fight.

DOBBS: Lisa, thank you very much. Lisa Sylvester from Washington. Up next here, abuse of credit card practices are draining the budgets of hard-pressed middle class families and enriching those credit card companies. The Senate has decided to take a look. We'll have a report. Congressman Michael McCaul demanding information from the Department of Homeland Security's investigation of the case of twos two border patrol agents. Congressman McCaul joins us here later in the broadcast.

Communist China's provocative behavior and technology advances are threatening American interests around the world. That report coming up next. Stay with us.


DOBBS: Consumers in this country have run up almost a trillion dollars in debt on their credit cards. Those consumers pay almost $15 on every $100 of personal disposable income simply to make interest payments on that debt. With consumer debt now at record highs, the Senate Banking Committee has decided to focus on the credit card industry and the way in which it is doing business and treating its customers. Bill Tucker reports.


BILL TUCKER, CNN CORRESPONDENT (voice-over): Chairman Christopher Dodd began the hearing with some advice for the credit card companies.

SEN. CHRISTOPHER DODD, (D) CT: Irrespective of the current legality of such practices, you should take a long hard look how you treat your customers.

TUCKER: Six thousand companies issue credit cards, 640 million credit cards are in circulation adding up to lots of debt.

ROBBERT MANNING, CREDIT CARD NATION: I've heard the term $9300 is the average household debt. But of the three out of five households that actually carry a debt, it's over $13,000.

TUCKER: That debt a burden for consume he or she but a boon to the credit card companies.

ELIZABETH WARREN, HARVARD LAW SCHOOL: They made $79 billion last year. In interest and late fees.

UNIDENTIFIED MALE: Interest and late fees are two different things.

WARREN: That's absolutely true.

UNIDENTIFIED MALE: The late fees are the tricks and traps. The interest is the legitimate.

WARREN: A 29 percent interest rate for being a few days late is not within the range of legitimate.

TUCKER: Legitimate or not, the credit card companies hold almost unchecked power over consumers.

MICHAEL DONOVAN, ATTORNEY: Gentlemen, the credit card is one of the only contracts throughout the common law of the United States and of any country in which the superior bargaining entity has the right to change its terms at any time.


TUCKER (on camera): Last year, consumers paid $17 billion in late penalties alone. Lou, to put that in perspective, that is 10 times the amount they paid just a decade ago.

DOBBS: I love Senator Dodd's admonition to those credit card companies to start paying attention to their customers. Let's hope that either they do or that the Senate continues to take a very hard look at what is being done to consumers by the credit card companies.

Bill Tucker, thank you very much. Time for some of your thoughts. Ricky in Texas said, "Lou, big companies say that the North American Union is necessary for us to compete in the world market. So I guess we will all be working for 50 cents an hour. That's what it will take to compete with the likes of China, India and Mexico. Give me a break."

And Phil in Florida said, "My wife and I watch you regularly. The 6:00 p.m. local news is a thing of the past at our house. Your persistent questioning is long overdue. We all need to stick our heads out of their windows and say we are mad as hell and not going to take it any more. Keep asking the tough questions for us."

We're certainly going to keep asking and hopefully we'll even get some answers. Send us your thoughts at Each of you whose e-mail is read here receives a book, "War on the Middle Class."

Up next here, new criticism from Congress over the imprisonment of two U.S. Border Patrol Agents, Congressman Michael McCaul of Texas in fact is demanding more information about the trial and more about the report from the Department of Homeland Security which was promised to him two months ago. Is there a cover-up? We'll find out what he thinks here next.

And communist China and its dangerous challenge to American interests. We'll have a special report on China's anti-satellite missile performance.

And the president's hard sell. President Bush saying he's determined to send more than 20,000 more troops. That issue and a lot of others next as Jesse Jackson, Georgette Mosbacher and Errol Louis join me. Stay with us.


ANNOUNCER: This is LOU DOBBS THIS WEEK. News, debate and opinion. Here again, Lou Dobbs.

DOBBS: The wife of imprisoned Border Patrol agent Ignacio Ramos attended the president's State of the Union address. Monica Ramos the guest of Congressman Dana Rohrabacher of California. Rohrabacher is a leading advocate for those agents who are serving lengthy prison sentences convicted on the evidence by a drug smuggler given immunity by the U.S. Justice Department. The drug smuggler testified, of course, against those agents and it was the basis for the entire prosecution.

Several Republican congressmen this week called for a closer look into that case. But they say they're being stonewalled by the Department of Homeland Security. One of the congressmen is Michael McCaul, a member of the homeland security committee. I asked the congressman why the inspector general isn't turning over that report as promised.


REP. MICHAEL MCCAUL, (R) TX: Well, as you know, when I was chairman of the investigation subcommittee, when this came to our attention, we requested a meeting with the Inspector General's office. He made several assertions as to the guilt of the agents. And then after which requested the report of investigation. They gave us assurances for months that this would be turned over. As we entered into the new Congress, he told me that my request had expired with the old Congress. That it would not be honored now. And that the only way I could obtain the report was to go through the Freedom of Information Act.

DOBBS: Wait a minute. A U.S. congressman being told by the Department of Homeland security you have to file a freedom of information request?

MCCAUL: That's what we were told. And Lou, this defies not only the Homeland Security Committee, it defies the will of the Congress and it defies the will of the people who are entitled to the truth in this case.

DOBBS: Well, Congressman Culverson (ph) said point blank he thinks it's a cover-up. What do you think?

MCCAUL: We won't know till we know the evidence. As I former federal prosecutor, I reserve judgment till we get evidence. You have to ask the question, why are they being so reluctant to turn over such important information. And either it's total arrogance or it's gross incompetent.

DOBBS: Well, you're a former federal prosecutor. Let me ask you something. And I think it's admirable you're trying to get the facts. That's what we're all trying to do. But the facts as they are established right now to the advantage of the prosecution, to the disadvantage of the defense, are based on the testimony of a legal alien, Mexican drug smuggler given immunity to testify against the agents. As a prosecutor, does that make any sense to you?

MCCAUL: It's an extraordinary case. Typically you have someone plead guilty to a charge and then cooperate in an investigation or in a case. This is an extraordinary set of facts here. In addition the judge not allowing the agents out on bond, in my view, when the real issue is risk of flight, these are law enforcement officers. There is no risk of flight. Where are they going to flee to, Mexico? That was an absurd result, I believe. And I think the judge should have let them out on bond.

DOBBS: Well, we're approaching three months since the Department of Homeland Security told you it would be what, about two weeks before you would have that report. The arrogance of the Department of Homeland Security as well as its overall incompetence is breathtaking. What do you do next?

MCCAUL: We have a constitutional responsibility for oversight in the Congress. That is what I am exercising. I relentlessly will pursue the truth in this case until that report is turned over. Did I meet with the new Democrat chairman of the subcommittee. He has sent a letter of demand to the department. As of yesterday, we still have not received those documents. And if we don't, we're prepared to move forward with a subpoena and if necessary, take the bold step of holding this department in contempt of Congress.

DOBBS: Well, I think that all of us interested in the welfare of this country and the justice for these two agents certainly wish you all the best of luck. And thank you, congressman, for being here.

MCCAUL: Thanks, thanks Lou.


DOBBS: Still ahead, communist China shows it has the ability to destroy our military satellites. Our special report on Beijing's growing threat to American interests. And President Bush facing a split within his own party over Iraq. I'll be talking with Jesse Jackson, Georgette Mosbacher and Errol Louis about that issue and many others. Stay with us.


DOBBS: Communist China tonight refusing to explain why it conducted its first-ever successful anti-satellite missile test. That test just the latest in a series of dangerous new military challenges to the United States and our interests around the world. Beijing is rapidly modernizing its military forces. And Christine Romans has the report.


CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): Defense experts see a pattern of behavior that highlights China's strategy to exploit American weaknesses and close the gap on American military superiority. Behavior like firing ground-based lasers to blind a U.S. reconnaissance satellite and rapid progress toward a blue water navy.

In October, a Chinese Song class diesel powered submarine like this one stalked the USS Kitty Hawk, surfacing, the U.S. Navy says close to the carrier group. More recently, China destroyed one of its own lower earth orbit satellites, a critical milestone. MICHAEL PILLSBURY, PENTAGON CONSULTANT: Essentially it's catastrophic. I would use the word "catastrophic" in a crisis. And China knows this.

ROMANS: Pillsbury wrote a report for the government on China's anti-satellite warfare programs. He says 90 percent of American military and intelligence traffic relies on satellites.

PILLSBURY: How we coordinate our air force, how we pass messages around the world, everything goes through these space satellites they've shown they can shoot down within a half an hour.

ROMANS: The United States asked for more transparency from China but also emphasized ...

SEAN MCCORMACK, STATE DEPT. SPOKESMAN: I would say we have good relations with China.

ROMANS: Critics call that a weak response.

JOHN TKACIK, HERITAGE FOUNDATION: I think the Chinese basically laugh at this kind of response. It signals to the Chinese that we are not going to do anything. I'm afraid that when the Chinese leadership is left with the impression that the U.S. is ambivalent, that the U.S. is agnostic on this, it gives them no incentive to change their behavior.

ROMANS: He says American policy makers refuse to recognize China's hostile intentions toward this country.


ROMANS (on camera): The prevailing attitude in Washington is to down play the threat of military modernization while U.S. policy is to encourage the Chinese to be a responsible member of the international community, Lou.

DOBBS: Christine, thank you very much.

Joining me now, two of the country's leading authorities on communist China and Beijing's threats to the United States, Gordon Chang, the author of "The Coming Collapse of China", Richard Fisher, vice president at the International Assessment and Strategy Center. And Christine, if you would I'd like you to remain with us here.

Gordon, let me ask you, this successful test is, I mean, that's something that the intelligence agencies in this country apparently did not see coming.

GORDON CHANG, AUTHOR, "COMING COLLAPSE OF CHINA": No, Lou, there have been three testifies beforehand which were unsuccessful. They did not expect this test to be so well done. This really points out one important thing, and that is we have underestimated China's military capacity for quite some time. And the importance of this test is it shows that we have been asleep. While we have slept, they have developed this satellite killer. And now we can see the consequences of our failures.

DOBBS: Rick Fisher, the fact is that our low earth orbit satellites, military satellites are the backbone of communications for the military and what China has said here is, your ours if we have to get into a conflict.

RICHARD FISHER, INTL. ASSESSMENT AND STATEGY CENTER: Absolutely, Lou. Not only that, the KT1, which was used on January 11, will be followed by larger more capable missiles that can target our much higher altitude navigation and even the satellites we depend on to warn us of nuclear strikes and therefore, protect ourselves and deter nuclear attack against us.

DOBBS: Christine has been following this story on the rising red storm, if you will. What is the reaction of most of the people you're talking with, whether it's in Washington, the military, in elected office? There seems to be just a sanguine acceptance of what is happening in the direction that China is taking.

ROMANS: Well, the official policy seems to be we are somehow helping China's rise to become peaceful as long as we don't press them, as long as we don't anger them, as long as we don't somebody too strongly worded. We know Washington issued them a diplomatic note about this satellite situation. But a lot of people are saying, it's just not enough. With the almost $230 billion trade deficit, we just don't have the negotiating ability.

DOBBS: As we continue to finance whatever the adventure may be on the part of the Chinese. Gordon, Putin this week criticized the United States' plans to develop space-based weapons. Of course we have them and continuing to develop them and was joined by India in calling for no space-based weapons. What do you make of that statement, particularly as it comes in the wake of the Chinese demonstration of its ability to kill satellites?

CHANG: Well, Putin really blamed this test on the United States. He said it wasn't China's fault. He said because the United States has all these weapons, it made China do it. But the point is that China has been developing an anti-satellite killer for 20 years or so, since the 1980s, long before President Bush ever thought about running for office. And you can see this blame America first attitude among so many people.

DOBBS: It's a tortured piece -- It is really a tortured piece of reasoning, the effect of it is hard to discern.

Rick, the idea that the United States in any way should fall behind China or any other nation in space-based weaponry is unthinkable. How advanced is our weaponry in space, and how far do we have to go to be -- to claim absolute superiority for some period of time?

FISHER: Quite a ways. But clearly our engineers have been conducting experiments, and we do have the building blocks to build both offensive and defensive capacities in space. But we need the policy commitment, we need the budgetary support, and we need some time to put it all together. The Chinese are now ahead of us. They have a working direct ascent anti-satellite capability and we have none.

DOBBS: And we have a situation where as Christine pointed out, approaching a $230 billion deficit with China for 2006. We have a trade relationship that is absolutely separated from our political relationship, our foreign policy, vis-a-vis China.

How can we possibly continue to do that and have exert any influence over China, Gordon?

CHANG: We certainly can't exert any influence when we have the national security advisor of this country trying to make excuses for President Hu Jintao of China. He said, for instance, that maybe president Hu did not know what was going on in Beijing about the satellite test. But that's ludicrous. I don't know what's worse, whether Chinese generals are running free or whether White House officials are trying to make excuses for those in Beijing.

The important thing is that we need a foreign policy that is resolute. Because unless we have that, we have no chance whatsoever.

DOBBS: Christine, I want to ask you this, as you have been reporting on this over the years. I don't recall a time, and I'm wondering if you do, in which the State Department spokesman, whether official or the actual spokesman have ever had anything but the most tepid responses to anything that has created any tension in the relationship between China and the United States.

ROMANS: Just this week, the spokesman there said I would say we have a good relationship with the Chinese. We'd like them to be more transparent but we have a good relationship. And the critics would say every time we sort of say China, please don't do that, you want to be a responsible member of the community. Then we say but you know, we're very happy with the way things are. And you're a friend of ours and an ally. So there aren't really strong words ever. It's diplomacy, frankly. These are the way these people talk.

FISHER: It's bad diplomacy though because we never make China pay a price for aggressive conduct. This anti-satellite test is only the last in a series of provocative incidents that go back more than a half decade.

DOBBS: Rick, while I can understand we'd all prefer that China had not pursued this, I think reasonable people would assume they would pursue their own national interests.

Give us your best judgment as to why this country seems so, I guess the issue would be utterly tepid and weak in asserting its own interests with China and insisting upon maintaining military superiority and committing to technological advance and the latest weaponry no matter whether space based or terrestrial.

FISHER: Indeed, Lou. We're falling behind in many areas. And the Chinese are quickly catching up. I question why we are falling behind ourselves. I would hope that as more attention is focused on this challenge, that more Americans would wake up and demand that the United States maintain a comfortable lead, a comfortable military superiority so that China is not tempted to make a very serious mistake such as thinking that it could get away with shooting down one of our satellites and that we will do nothing.

DOBBS: A very good point, and that's where we're going to have to end.

We thank you very much Gordon Chang, thank you as always Christine, thank you very much.

Coming up next here, congressional backlash over Iraq has President Bush talking very tough, I'll be taking that issue up and others with Jesse Jackson, Georgette Mosbacher, Errol Louis when we continue. Stay with us.


DOBBS: Joining me now from Chicago, Reverend Jesse Jackson, here in our studios in New York, republican strategist georgette Mosbacher, former Republican national committeewoman. "New York Daily News" columnist and editorial board member, Errol Louis. Good to have you all with us.

Errol, let me begin with you.

This president is facing what was expected, Democratic opposition on Capitol Hill to the reinforcements in his conduct of this war. But Republicans are joining as well in their own way.

ERROL LOUIS, "NEW YORK DAILY NEWS": There's some Republicans you expected. Chuck Hagel and others who are even eyeing national campaigns are positioning themselves where they've always been.

But you've also got some Republicans who are maybe going to put a finger in the wind. By and large, they are going to stand with the president, even on a symbolic measure like stating that the troop increase is not in the national interests. But he quelled a rebellion in the ranks. There was some talk that it might be even worse.

DOBBS: Georgette, any surprise in your mind about what is basically turning into an open rebellion?

GEORGETTE MOSBACHER, REPUBLICAN STRATEGIST: Well, I was surprised. I was surprised by certainly by Senator Warner. But I do think that when you have two-thirds of the nation that are against the president's policies in Iraq, that you're going to having Republican senators particularly after the bloodbath of this last election step back and say, we have to cover ourselves. And I think that's what you're seeing.


REV. JESSE JACKSON, RAINBOW/PUSH COALITION: He has lost the Congress in November, he's lost the confidence of the American people. And he's a lame duck. He's in a very weak position, and when even Iraq the Mission recommends we move toward negotiating with our adversaries and Iran and Syria, he recommends in fact a provocative act. So it's a kind of defiance by him and rebellion by the Congress.

DOBBS: It's, even General David Petraeus this week confirm to be the leader of our troops in Iraq saying, it is hard but it is not hopeless. But at the same time saying there are no guarantees in what is in addition to ugly combat, there are no guarantees in this test of wills. Do you concur?

LOUIS: That's right. Absolutely. There's nothing but bad news on the horizon although Petraeus may be able to turn the situation around. I think though that the Congress has given the president everything he asked for. Other than that symbolic vote of confidence. He's going to have the money. He's going to have the troops. He's got the commander that he wanted. I e he shook up his leadership team, new defense secretary. This is going to be his last best maybe only shot at trying to turn around a situation that is just going to hell in hand basket.

DOBBS: What is your guess as the -- as to the implications for the Republican Party, Georgette, given these historically low poll numbers in at least one poll, numbers that are reminiscent if not quite at the same low level as Richard Nixon? What are the implications for the party for the congressional Senate races and of course, the 2008 election?

MOSBACHER: Well, I think that what you're seeing just today in the conference that the president addressed of Republicans in a meeting that they're trying to come up with a slate of ideas and in fact, they had Newt Gingrich down there trying to give them some -- an outline.

DOBBS: There's a new voice.

MOSBACHER: I mean an outline for how to get the confidence back of the American people for the Republican Party. And I think that's what we've got to do.

DOBBS: Jesse, the Democrats putting forward obviously Hillary Clinton, who is the front-runner in the contest, the early stages of this contest. But she looks overwhelming right now in terms of financial support and the poll support we're seeing at this stage. What is your take on what the Democrats are doing in their fielding of these early candidates?

JACKSON: : You know, four years ago, when many of us demonstrated against the war because we did not see the evidence of weapons of mass destruction and an al Qaeda connection and an imminent threat at that time.

The legislators were with the president because he was strong and they were fearful of making a misstep.

Now there will be a huge demonstration in Washington tomorrow. Now the demonstrators and legislators are in lock step. So the American public is going in one direction. Clearly Democrats and Republicans and even the candidates for '08, it's kind of open season.

The only big stick there they it be -- will they be against the war and then for funding it. That is a contradiction. If they are for ending the war, you must also challenge the funding and make certain it is transparent.

DOBBS: Jesse Jackson, Georgette Mosbacher, Errol Lewis, we're going to be back in a moment and we're going to take up the issue. Is it a political mistake, perhaps a political disaster for the Democrats to take on the funding of our forces in Iraq? Stay with us.


DOBBS: All right. We're back with our political roundtable. Errol, I'm going to turn to you first for this.

Jesse has just called and said that they're going to have to use, the Democrats in Congress are going to have to use fund to stop the policies they object to. Do you concur?

LOUIS: Well, I think they're going to avoid it. It's really a trap for the Democrats in a lot of ways. You've got big demonstrations going on all over the country this weekend aimed really at almost one person, Nancy Pelosi.

Those demonstrations at this point are not aimed at the Bush administration which has made clear it's going to go forward with its plans in Iraq. They're aimed at pushing the Democrats further to the left, pushing them in a direction that might not be well advised for 2008.

Pushing them to get into issues of cutting the funding. The charge that the Democrats don't support the troops has no credibility to it unless they start interfering with the ability of the military to conduct this war.

DOBBS: Let's turn to ...

JACKSON: Lou, but the question is there a correlation between more money and troop support. I'm still talking about parents sending their kids material for protecting their bodies. And in some sense, we're seeing a lot of instances where there is no correlation between the funding and troop support but fund and no bid contracts. The credibility question is at stake here as well about more money meaning more support for more troops.

DOBBS: Georgette, I want to turn to you, if I may. The idea that we have just watched Ford Motor report a $12.7 billion loss, 52,000 jobs lost, meanwhile we're watching Toyota this year, will move ahead of Ford as the number two carmaker in the country. Likely to take over number one, General Motors. A Republican Congress and a Republican President and the business establishment which is predominantly Republican are blowing it, are they not?

MOSBACHER: It's a matter of the marketplace. And the truth of the matter is the American auto -- automobile companies aren't producing what the American consumer wants. And there is no legislation, there is nothing anyone can do if bad management and a lack of listening to the consumer is going to put you out of business. That's as simple as it is.

DOBBS: You would have thought somebody in Detroit would have figured that out. Millions upon millions of dollars worth of bonuses, tens of thousands of jobs lost over the years and we continue to pursue these free trade policies that are absolutely nuts in my opinion.

JACKSON: These are trade policies not automotive company policies when Honda and Toyota can build plants in this country and Ford cannot build plants in Toyota. That's fighting with one hand tied behind our backs. This is a policy where we're exporting capital and goods and importing cheap labor and cheap product.

I think we should look at our trade policy, not just automotive but ingenuity.

DOBBS: Errol?

LOUIS: When you see Toyota make $17 billion in the same year that Ford loses 13 you know that you have got a real serious structural imbalance. These are big numbers. This isn't just one company making some bad mistakes. This is a company coming to terms with bad decisions made over the course of a generation. A lot of these car companies are basically pension plans that also occasionally turn out cars not enough people want to buy.

DOBBS: That's a great way to put it.

LOUIS: We've got a situation - look, if there are profits at Ford, the management keeps it and the owners keep it. If there's problem, they are going to have to absorb that loss as well.

DOBBS: Errol Louis, thanks for being here. Georgette Mosbacher, thank you very much. Jesse Jackson, thank you very much.

Thank you very much for being with us. We hope you have a very pleasant weekend. Good night from New York. THIS WEEK AT WAR with Tom Foreman is next.


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