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LOU DOBBS TONIGHT

Walter Reed Commander Fired; John McCain's Gaffe; New Intel Failure?

Aired March 1, 2007 - 18:00   ET

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


KITTY PILGRIM, HOST: We're following the grim news from Alabama. A tornado has killed at least eight people in a school in the city of Enterprise. Five other people were killed elsewhere in the state.
We will have a live report from Enterprise.

Also tonight, a bleak assessment of the rising threat to this country from drug cartels in Mexico and other countries.

We'll have a special report, "The War Within."

And illegal alien college students are a step closer to winning privileges that are denied to American citizens.

All of that and much more straight ahead.

ANNOUNCER: This is LOU DOBBS TONIGHT, news, debate and opinion for Thursday, March 1st.

Sitting in for Lou Dobbs, Kitty Pilgrim.

PILGRIM: Good evening.

The Army today fired the general in charge of Walter Reed Army Medical Center in Washington. The Army secretary relieved Major General George Weightman of his command for failing to fix appalling living conditions for some of our wounded troops.

Meanwhile, a Vietnam war hero, Senator John McCain, is facing a firestorm of protests over his remarks about the war in Iraq. The senator, a presidential candidate, said the lives of more than 3,000 of ours troops have been wasted in Iraq.

Kathleen Koch reports on the abrupt dismissal of the commander of Walter Reed.

Dana Bash reports on the outrage over Senator McCain's remarks on Iraq and what it could mean to his presidential hopes.

And Zain Verjee reports on new questions about U.S. intelligence, this time on North Korea.

We turn first to Kathleen Koch -- Kathleen.

KATHLEEN KOCH, CNN CORRESPONDENT: Kitty, Major General George Weightman had been at the helm at Walter Reed for only about six months. Still, as Army top brass wanted to hold someone accountable, he was the logical choice.

(BEGIN VIDEOTAPE)

KOCH (voice over): Major General George Weightman, the man in charge of Walter Reed Army Medical Center since August, was relieved of duty because top Army officials "had lost trust and confidence" in the commander's leadership. At the first meeting of the independent panel formed to investigate the problems at Walter Reed, Defense Secretary Robert Gates said nothing on camera about Weightman's dismissal, but a senior Pentagon official says Gates was "very much involved in the decision."

Pressure had been mounting for some accountability for the deplorable conditions and administrative roadblocks many outpatients faced at Walter Reed.

SEN. CLAIRE MCCASKILL (D), MISSOURI: This isn't about paint on the walls. This isn't about fixing holes in the ceiling. This is about a system that is not designed to make it easy for the wounded to get what they deserve.

SEN. BARACK OBAMA (D), ILLINOIS: The higher-ups in charge who knew about this should have addressed it. The fact that they didn't I think is shameful.

KOCH: Weightman himself had accepted responsibility just last week.

MAJ. GEN. GEORGE WEIGHTMAN, WALTER REED ARMY MEDICAL CENTER: A hundred percent of it falls on me. I'm responsible for everything that does happen or does not happen here at Walter Reed. And it was obviously a failure on my part to reach down and touch those soldiers and find out directly from them.

KOCH: Some point out Weightman isn't the only one to blame since they told top brass shortly after the war began about the poor outpatient care at Walter Reed.

STEVE ROBINSON, VETERANS FOR AMERICA: There's a bureaucracy that people have to go through that is extremely frustrating when you come back from war that needs immediate attention.

(END VIDEOTAPE)

KOCH: CNN has learned that two civilian employees at Walter Reed have been fired. Administrative action has been taken against one officer and several lower-ranking enlisted soldiers.

Whether or not any further personnel action will be taken could depend on the findings of that independent review panel. It's due to complete its work in about 45 days -- Kitty.

PILGRIM: Thanks very much, Kathleen Koch.

KOCH: You bet. PILGRIM: Senate Democrats opposed to the troop buildup in Iraq have come up with a new strategy to challenge President Bush. Senate Budget Committee chairman Kent Conrad says Democrats may cut $20 billion from next year's budget for the wars in Iraq and Afghanistan. President Bush has asked Congress for $142 billion to pay for combat operations in 2008.

Senator John McCain today expressed regret for saying the lives of more than 3,000 Americans have been "wasted" in Iraq. The senator said he should have used the word "sacrificed" instead. Another presidential candidate, Senator Barack Obama, made a similar comment last month. Senator Obama said his remark was a slip of the tongue.

Dana Bash reports.

(BEGIN VIDEO TAPE)

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT (voice-over): When John McCain made his bid for president official on "David Letterman," he also said this about Iraq.

SEN. JOHN MCCAIN (R), ARIZONA: We've wasted a lot of our most precious treasure, which is American lives.

BASH: The Democratic National Committee pounced, demanding an apology.

Hours later, the Vietnam veteran and former POW made clear he regretted using the word "wasted" to describe troops killed in Iraq. "I should have used the word sacrifice, as I have in the past," McCain said. "No one appreciates and honors more than I do the selfless patriotism of American service men and women in the Iraq War."

And guess who came to McCain's defense?

A Democrat running for president.

OBAMA: John McCain and I may have disagreements. The one area that I don't think he can be questioned is his dedication to American troops. He's been there. He's done that.

BASH: Barack Obama may seem an unlikely McCain sympathizer, but he's still smarting from having to apologize for saying virtually the same thing as he launched his presidential campaign last month: "We now have spent $400 billion and have seen over 3,000 lives of the bravest young Americans wasted," Obama said.

OBAMA: And we have a duty, a scared duty, to make sure that we are honoring their sacrifice by giving them missions in which they can succeed. I'm positive that was the intent in which he meant it. It was the same intent that I had when I made my statement.

(END VIDEO TAPE)

BASH: Now, McCain is making clear he regrets using the word "wasted" to describe the lives lost in Iraq, but not the sentiment behind it. He is somebody who is certainly an ardent supporter of the war in Iraq, but also somebody who has long criticized the way the administration has prosecuted the war. And again today, Kitty, he said, "We have paid a grievous price for those mistakes in the lives of the men and women who have died."

Kitty.

PILGRIM: Dana, language and intent, very important things in this campaign season.

BASH: Absolutely.

PILGRIM: Thanks very much, Dana Bash.

BASH: Thank you.

PILGRIM: Insurgents in Iraq have killed another one of our troops. Now, the Marine was killed yesterday in Al Anbar Province, west of Baghdad. Eighty of ours troops were killed in Iraq in February, 3,163 of our troops have been wounded since this war began. 23,677 of our troops have been wounded, 10,427 of them so seriously, they could not return to duty within three days.

Troubling questions tonight about U.S. intelligence on another country in the so-called "axis of evil," North Korea. The Bush administration may be backing away from assertions that North Korea definitely had a secret program to enrich uranium.

As Zain Verjee reports, this raises questions about the administration's entire policy toward North Korea over the past five years.

(BEGIN VIDEOTAPE)

ZAIN VERJEE, CNN STATE DEPT. CORRESPONDENT (voice over): Highly- enriched uranium is a key ingredient for building one type of nuclear bomb. Last year, the North Koreans exploded a plutonium-based device. But back in 2002, the intelligence community was sure they wanted to build uranium bombs, too.

JOHN MCLAUGHLIN, FMR. CIA DEPUTY DIRECTOR: We had high confidence that they were acquiring materials that could be used for a uranium enrichment program.

VERJEE: Intelligence officials at the time said there was evidence North Korea bought centrifuge equipment from Pakistan's nuclear scientist, A.Q. Khan, and acquired quantities of aluminum tubes. But the intelligence officials say they lacked specifics then and now.

MCLAUGHLIN: We did not know the magnitude of the program, where they were in its progress, or where it was located.

VERJEE: In October 2002, the U.S. confronted North Korea about the existence of this program. U.S. officials say North Korea acknowledged it at the time. In essence, admitting that they were cheating on an agreement not to develop a nuclear program.

Now there's a new deal with North Korea. The U.S. wants some answers.

CHRISTOPHER HILL, ASSISTANT SECRETARY OF STATE: We need to see what's happened to this equipment. If the tubes were not -- did not go into a highly-enriched uranium program, maybe they went somewhere else.

VERJEE: At a recent hearing, an intelligence official was frank.

JOSEPH DETRANI, U.S. INTELLIGENCE OFFICIAL: We still have confidence that the program is in existence at the mid-confidence level, yes, sir.

VERJEE: Midlevel, meaning they're not absolutely sure. Critics say the intelligence community is softening its position on North Korea's uranium program and may have exaggerated the information it had. But a senior intelligence official tells CNN that this thinking is wrong and nothing has changed since 2002.

(END VIDEOTAPE)

VERJEE: Another U.S. official tells CNN there is high confidence North Korea was pursuing a uranium-enrichment program. But a recently declassified report acknowledges there are still questions, saying the degree of progress toward producing enriched uranium remains unknown -- Kitty.

PILGRIM: Thanks very much, Zain Verjee.

Still to come, a backlash against national standards for driver's licenses. Now, a key anti-terrorist program is delayed.

We'll have a special report on that.

Also, illegal alien college students demand privileges denied to American citizens. And some members of Congress actually believe that's a good idea.

We'll have a story.

And killer tornadoes tear through Alabama and Missouri, killing as many as 14 people, including eight people at a high school.

We'll have a live report.

(COMMERCIAL BREAK)

PILGRIM: Legislation sponsored by Congressman Duncan Hunter calls for a congressional pardon for imprisoned former Border Patrol agents Ignacio Ramos and Jose Compean. Now, tonight, one more congressman has signed on as a co-sponsor, A Democrat this time -- Congressman Lincoln Davis from Tennessee.

To date, 87 Republicans and three Democrats are co-sponsoring the legislation.

New concessions tonight by the administration to get reluctant states to sign on to the Real ID Act. The law requires national standards for driver's licenses to be put in place over a year from now. But as Lisa Sylvester reports, the deadline for compliance has been extended.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice over): States can take an extra 18 months to meet new minimum driver's licenses standards under the Real ID Act. The Department of Homeland Security said the delay was necessary because the agency took longer than expected to issue new rules.

MICHAEL CHERTOFF, HOMELAND SECURITY SECRETARY: The idea here is not to set an impossible bar. It is to set an ambitious but realistic timeline so we get the job done properly, but also so that we avoid simply kicking the can down the road indefinitely.

SYLVESTER: Under the new standards, applicants must improve identity with a narrow list of documents, such as passport or certified birth certificate, provide a Social Security number, evidence of legal status, and confirm their address. The state agency that issues driver's licenses must authenticate documents by matching them against the Social Security Administration's database and state birth records. Finally, a state's database must be accessible to other states to verify a person does not hold multiple licenses.

The 9/11 Commission recommended tightening standards. Seventeen of the 18 hijackers had multiple forms of identification.

JANICE KEPHART, PRESIDENT, 9/11 SECURITY SOLUTIONS: When we were on the 9/11 Commission, what we saw was identity was the underlay of everything that kind of went wrong with 9/11.

SYLVESTER: Still, 24 states are considering legislation to not comply with the new standards because of funding and privacy concerns. The National Conference of State Legislatures says that while the start date has been pushed back, states are still expected to have all driver's licenses reissued within five years, even those who ask for the delay.

BILL WYATT, NATIONAL CONFERENCE OF STATE LEGISLATURES: We think a more realistic goal would be to reissue those 245 million driver's licenses over 10 years. It would save states an awful lot of money

SYLVESTER: The program is expected to cost $11 billion.

(END VIDEOTAPE)

SYLVESTER: DHS will allow states to tap into $100 million in homeland security grants as an offset. If states don't comply with the Real ID Act, the federal government will not recognize their driver's license as a valid form of identification and it will not be accepted, for instance, to board airplanes -- Kitty. PILGRIM: Lisa, in this age of technology, it seems five years and 10 years is a bit long, doesn't it?

SYLVESTER: It does indeed seems like it's a while. Now, what states are saying is that they would like to spread that cost out over that time period. The technology is there. What they are really worried about is the cost -- Kitty.

PILGRIM: Thanks very much, Lisa Sylvester.

Illegal aliens are about to receive a big break under a bill introduced in the House today. The DREAM Act of 2007 would allow states to give in-state tuition to illegal aliens. And that, as Bill Tucker reports, would put those opportunities on a path to amnesty and citizenship.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice over): The Development, Relief and Education for Alien Minors Act, or DREAM Act, as it's better known, has been around since 2002. It's never passed Congress. But the bill, which would allow states to offer illegal aliens in- state tuition, create amnesty and a path to citizenship, has been reintroduced to the House by Representative Lincoln Diaz-Balart of Florida.

The opposition is already on the move.

KRIS KOBACH, UNIV. OF MISSOURI-KANSAS CITY: The DREAM Act is a nightmare when it comes to the rule of law. First of all, it gives in-state tuition to illegal aliens who are violating the law. Meanwhile, U.S. citizens who follow the law from out of state, they have to pay full tuition. Secondly, it's part of a massive amnesty for illegal aliens who happen to attend college.

TUCKER: If the illegal alien student is admitted to a college or university, and has been in the country for at least five years, he or she would have their status made legal. And they can apply for permanent status after two years in school.

Supporters of the bill argue it's not fair that children should be held responsible for the actions of their parents.

IRA MEHLMAN, FED. FOR AMER. IMMIG. REFORM: This legislation directly affects the middle class in the United States. Not only are they rewarding people who broke the law, but they are essentially taking resources away from middle class kids in the United States. And essentially, what they're saying is we're going to deny seats at a public university to an American kid.

TUCKER: Currently, it's against federal law for states to make in-state tuition rates available to illegal aliens under the Immigration Reform Act of 1996 unless they offer in-state tuition rates to citizens, regardless of the state they live in.

(END VIDEOTAPE) TUCKER: But 10 states currently make the benefit available to illegal aliens while denying it to citizens, which means they're offering a discount to illegal aliens, in addition to taking the space away from citizens and legal residents -- Kitty.

PILGRIM: Bill, that is an unbelievable story. Ten states are denying federal law.

Where do they stand legally?

TUCKER: Well, it's interesting, because they're a flat-out contradiction to federal law, which states it about as simply as you can state it, that, if you do this for illegal aliens, you have to do it for every kid in the United States of America. Those states currently don't do that.

In Texas, there's currently an effort under way to repeal that legislation. And that's in the Texas legislature.

PILGRIM: Thanks very much, Bill Tucker.

Well, that does bring us to the subject of tonight's poll.

Do you believe that illegal aliens should be eligible for in- state tuition at American colleges and universities while U.S. citizens are denied the same privilege? Yes or no?

Cast your vote at loudobbs.com. We'll bring you the results a little bit later in the broadcast.

Coming up, a Democratic congressman under investigation takes a ride on Air Force One after he's appointed to a key committee seat.

We'll have the details on that.

"The War Within," tracking America's illegal drugs. We'll tell you where they're coming from and where they're going.

And deadly tornadoes sweep through the middle of the country. As many as 14 people have been killed.

We'll have a live report.

(COMMERCIAL BREAK)

PILGRIM: Republicans and taxpayers are still expressing outrage tonight at Congressman William Jefferson being named to the Homeland Security Committee. In 2005, federal agents found $90,000 in the congressman's freezer.

Andrea Koppel tells us why Jefferson, still under investigation by the FBI, was on Air Force One with President Bush today.

(BEGIN VIDEOTAPE)

ANDREA KOPPEL, CNN CONGRESSIONAL CORRESPONDENT (voice over): President Bush arrived in New Orleans, the hometown of Congressman William Jefferson, just one day after House Republicans kicked up a political dust storm, pledging to try to block the Louisiana lawmaker's appointment to the Homeland Security Committee. But today the Republican leader didn't raise as much as an eyebrow when he learned Mr. Bush had just given Jefferson a ride to New Orleans on Air Force One.

REP. JOHN BOEHNER (R), MINORITY LEADER: The president's going to Mr. Jefferson's hometown. And as customary under Democrat and Republican presidents, they typically invite the hometown member to join them on those flights.

KOPPEL: Republicans are accusing Speaker Nancy Pelosi of failing to practice what she's preached. Last summer, after the FBI raided Jefferson's congressional office over allegations he had accepted bribes, and about six months before midterm elections, Pelosi forced Jefferson to resign his seat on a powerful tax-writing committee.

REP. NANCY PELOSI (D-CA), HOUSE SPEAKER: The House Democratic Caucus is determined to uphold a high ethical standard.

KOPPEL: But this week Pelosi backed Jefferson's appointment to the Homeland Security panel because she said he'd be better placed to help out his hurricane-ravaged district. And again, today, defended her decision.

PELOSI: Mr. Jefferson has already paid a price not being appointed to the Ways and Means Committee. In fact, being put off the Ways and Means Committee because there was some thought that the allegations, although they're still allegations, had some relationship to the work of that committee.

KOPPEL: New York congressman Peter King is the committee's top Republican.

REP. PETER KING (R), HOMELAND SECURITY CHAIRMAN: So she's saying a person was has too many ethical issues to be on the Ways and Means Committee is going to be dumped on to the Homeland Security Committee, a committee which is one of four committees that has constant access to classified information, is aware of ongoing threats and investigations and plots.

(END VIDEOTAPE)

KOPPEL: But Democratic leadership aides point out that all members have access to the same intelligence as members of the Homeland Security Committee. And for his part, Congressman Jefferson continues to deny all the allegations against him -- Kitty.

PILGRIM: Thanks very much, Andrea Koppel.

Former congressman Bob Ney is in federal prison tonight. He's serving a two-and-a-half-year sentence for corruption. Ney, a Republican from Ohio, pleaded guilty last October to conspiracy and also making false statements. Now, the congressman admitted he traded his influence for gifts arranged by former lobbyist Jack Abramoff. Abramoff is currently serving a prison term for fraud.

Time now for some of your thoughts.

And Chris in Texas writes, "In regards to those not being given the proper medical and rehabilitation services at Walter Reed, I'm so sorry all the kids that put their lives on the line for all of us just have us spit in their face."

And Wyndell in South Carolina, "The top military officers and the White House want to send more troops to Iraq when they can't even properly take care of the ones who have already served and been injured there. Something is very, very wrong here."

Frances in Washington writes, "Republicans claim our troops will be discouraged to hear that many Americans no longer support the war in Iraq. I wonder how our troops feel when they find out how poorly they will be treated if they come home wounded and are sent to Walter Reed."

E-mail us at loudobbs.com. We'll have more of your thought a little bit later in the broadcast. Each of you whose e-mail is read here will receive a copy of Lou's new book, "War on the Middle Class."

And coming up, "The War Within." Where are America's drugs coming from? And what are we doing about it?

We'll have a special report.

And your newborn can have $500 -- if you live in California, that is. And we'll have the details on California's giveaway.

And deadly tornadoes rip through Alabama, a high school, as storms tear across the middle of the country. We'll have a live report on all of that.

Stay with us.

(COMMERCIAL BREAK)

PILGRIM: Deadly tornadoes today ripped through the United States. At least eight people were killed when a tornado struck a high school in Enterprise, Alabama. Another five people are reported killed in other areas of the state.

Now for the latest on these deadly tornadoes, we go to Jamie McIntyre in Enterprise, Alabama -- Jamie.

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: It's just a devastating scene here at the Enterprise High School in Enterprise, Alabama, where that very powerful tornado cut a swathe through the nearby neighborhoods and then hit the very heart of this high school, where student had been assembled in an auditorium as a protective measure because of the warnings. And the tornado hit that very part, killing as many as eight students.

But it's been devastating day all across the state. Here's some of the eyewitnesses' accounts of the tornadoes across the state.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: One was pinned waist down. They had -- that one girl -- the other girl come out, she was unconscious. And then there was a guy that was in there. They pulled him out about 30 minutes ago.

I mean, when I left there about 15 minutes ago, they were still working on the girl. She's pinned. The whole wall's collapsed on her.

We were standing at the hotel. We'd seen it when it was coming through. I mean, everybody stopped, the lights went out, and we had seen it just go behind Lowe's. And it just took a path straight down. I mean, it was -- it was huge.

UNIDENTIFIED MALE: Well, I was right across the road and I had seen it come down from the sky, and it wiped out everything.

UNIDENTIFIED FEMALE: I put my children and I in the closet and I covered our heads with the blanket, and we just held on until it was over. When we stuck our head out, we could tell the roof was gone. And we wait for the wind to die down a bit, and everyone was crying, and we got back out and got to safety. We went over to the church across the street.

(END VIDEO CLIP)

MCINTYRE: As you can imagine, Kitty, here at the Enterprise High School, I've witnessed hundreds of dramatic scenes. Parents looking for their children. Sometimes joyfully reunited. Others just very concerned as the enormity of the situation sinks in. And of course harried rescue workers trying to organize things and get a sense of the scale of the damage. Kitty?

PILGRIM: That's a heartbreaking scene. Do you know how much warning they had?

MCINTYRE: Apparently quite a bit of warning. The tornado warnings were posted early in the day. Tornado warnings. And then they turned to a tornado watch and then tornado warning. There were tornado sirens that went off and we hear those nearby at Ft. Rucker, where we were actually at the base doing a story about helicopter training.

The thing that struck me was we took refuge in a building when we heard those warnings. And I got to tell you, the building that we were in, it was a substantial building but it would not have withstood the force of the tornado that has destroyed the center section of this high school behind me.

Kitty? PILGRIM: Jamie that's -- How prepared this was community for such -- is this a common tornado area?

MCINTYRE: Well, they were very prepared and the response was quite quick. But there's no way to adequately prepare for a storm that has the force that this storm had. And again walking to this area from about a mile away, passed house after house, that had either seriously damaged or destroyed. People with stories of narrow escapes. Cars overturned. I mean it's just -- no matter how ready you are, it's hard to be 100 percent ready for something like that.

PILGRIM: How quickly are they getting help and support services in there, Jamie?

MCINTYRE: Well, it's been flooding in. And people have been coming in. And of course, they're still searching through the wreckage here to make sure nobody's left inside. Trying to do the process of accounting for everyone. But the whole community, as you can imagine, is pulling together. And they also got help, by the way, from nearby Ft. Rucker when sent nearby helicopters to take people to other hospitals as the local hospitals began to get full.

PILGRIM: Thanks very much. Jamie McIntyre. Thanks, Jamie.

Now we go to CNN meteorologist Reynolds Wolf for more on these deadly tornadoes and the severe weather gripping the eastern half of the country. Reynolds?

REYNOLDS WOLF, CNN METEOROLOGIST: Absolutely, Kitty. We've really been focusing for much of the day, in parts of south Alabama, especially in Dale County where we had off the damage and in Enterprise. Now we are going to move up into the center of the state of Alabama into Jefferson County. Here's Birmingham. Birmingham, as well as all of Jefferson county, currently under a tornado warning at this time. From Gardendale, southward to Homewood.

We have got one large rotating cell that's moving to the northeast. Doing so, I believe, around 45 to 50 miles an hour. Certainly this is going to cause all kinds of problems. We're talking about the potential of damaging winds, large hail, heavy rainfall. And of course the possibility of tornadoes as well. Certainly if you're in the Birmingham area or in Homewood, anywhere in that area, you certainly want to take cover immediately.

Now we're going to shift focus a little bit more over towards Georgia. Let's do that now. Taking Atlanta and point southward over towards Macon. We've got one strong rotating storm this hour here in the Macon area and again, here you go, this is I-75 and that one storm we're watching, just to the southwest of Milledgeville at this time, north of Warner Robbins Air Force Base. Here Perry, Georgia, and near Columbus, Georgia you have another large cell that is crossing over the Chattahoochee River.

What is interesting, Kitty, this, what we're seeing in Alabama, is just one tiny part of an immense storm system. We're going to back away a little bit and show you that seeing thundershowers into parts of the Ohio Valley and then in the top half of the system, going back to the twin city, we're talking about snowfall. Possibly blizzard- like conditions over the next couple of hours. Temperatures in Minneapolis at 27 degrees currently, 31 in Des Moines back in the Corn Belt. And the back half of the system pulling moisture off of Lake Superior. Cold air coming in behind it.

We're talking about a major snowfall event in the Twin Cities. They could see over a foot of snowfall before the system dies out. So we're talking about snow in parts of the Midwest and into the upper plains and in the Southeast, possibly devastating. Already devastating tornadoes and we're not done just yet. Let's send it back to you.

PILGRIM: Thanks very much, Reynolds Wolf. And we know you'll be following this very closely and we'll keep you updated on this throughout the evening and we'll continue to follow the developments throughout the evening here on CNN.

Let's turn to a new report, though, that says millions of dollars earmarked for homeland security are actually being used for pork programs around the country. All of this while the security needs of cities such as New York and Los Angeles remain unmet.

Some of the most outrageous examples of pork are $202,000 for security cameras in a rural fishing village in Dillingham, Alaska, $160,000 for eight large plasma TV screens in Montgomery County, Maryland, $55,000 used for gym equipment to teach firefighters to become fitness trainers.

Well, a small victory for middle class workers, the House today voted to make it easier for American workers to unionize now, under the measure, if the majority of employees vote for a union, the company would be forced to allow one.

But workers would have to vote with a signed card, not a secret ballot. Now opponents of the bill say the measure exposes employees by intimidation by union organizers. And the White House has said it will veto this bill.

Tonight, "The War Within," it's our special report on this country's battle against drug and alcohol abuse. The State Department has released a new report on the global drug trade. Mexico remains the single-largest source of all drugs coming into the United States. Afghanistan's production of opium is at an all-time high. Christine Romans has more on the findings.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): From the State Department, a stark assessment of the international drug trade. Official praise for what administration calls, unprecedented efforts by Mexico to crack down on drug trafficking organizations and the corruption that has led Mexico to be called a narcodemocracy.

SHERRI MORGAN, NATIONAL ASSOCIATION OF SOCIAL WORKERS: Mexico remains the primary corridor for drugs entering the United States. Over the past year, methamphetamine production increased and drug- related violence and homicides escalated.

ROMANS: Some 2,500 drug-related murders last year in Mexico, as cartels vied for lucrative routes into the United States. Lucrative, because 90 percent of the cocaine departing South America that reaches the U.S. passes through Mexico. Marijuana and cocaine, the government says, is moving across the border, mostly in commercial trucks with hidden compartments. Or hidden among legitimate cargo.

And in cars, trains and airplanes. Quote, "The extensive licit cross border traffic between the two countries provides ample opportunities for drug smugglers to deliver their illicit products to the U.S. markets."

At the same time, opium production in Afghanistan is exploding. A record $3 billion crop that the State Department says is fueling the Taliban insurgency. Pakistan remains a major transit for Afghan hashish and opium. As for Venezuela, it was for years a counternarcotics ally.

MORGAN: Frankly, that's all stopped.

ROMANS: Venezuela, the report said, failed demonstrably.

UNIDENTIFIED MALE: I think that Hugo Chavez's dislike of the United States, has caused him to create a diminished effort in terms of trying to address the movement or the flow of drugs through his country.

ROMANS: Successes in Colombia pushing heroin and cocaine shipments into Venezuela.

(END VIDEOTAPE)

ROMANS (on camera): The State Department says Canada has evolved from what it calls a transit country to a source country for ecstasy. And Canada is now a, quote, "significant producer of high-quality marijuana."

PILGRIM: Christine, how much marijuana is coming in from Canada and Mexico?

ROMANS: The State Department says last year about 4,000 tons to feed 20 million users in the United States. That's the demand part of the equation.

PILGRIM: Twenty million users.

ROMANS: That's right.

PILGRIM: That's unbelievable. Thank you very much, Christine Romans.

Still ahead, are there more U.S. and NATO troops in Afghanistan and we'll talk to one of the country's most distinguished military leaders about the other war on terror. And critics of Senator John McCain say he's sending mixed messages to conservative Republicans and to voters. We'll take a look at that.

And later, the $500 giveaway in California. We'll tell you about a new proposal that could give more money to the children of thousands of illegal immigrants.

(COMMERCIAL BREAK)

PILGRIM: Senator John McCain formally announced he's running for president in 2008 on late-night television. Now it is an unusual move for a presidential candidate but as Bill Schneider report, McCain is struggling to appeal to both conservative and liberal voters.

(BEGIN VIDEOTAPE)

SEN. JOHN MCCAIN, (R) AZ: I would come back ...

BILL SCHNEIDER, CNN POLITICAL ANALYST (voice-over): It wasn't so much what John McCain said ...

MCCAIN: I'm announcing that I'll be a candidate for president of the United States.

SCHNEIDER: It's where he said it. On the "Late Show with David Letterman." McCain seemed to be saying I'm still a maverick like 2000 but is he? McCain has repaired his relationship with President Bush, he's showcasing his conservative credentials.

MCCAIN: I have always been in favor of overturning Roe v. Wade.

SCHNEIDER: Then why is McCain the only major Republican candidate who rejected an invitation to talk to CPAC? The Conservative Political Action Conference this week in Washington. Conservative activists feel dissed.

DAVID KEENE, AMERICAN CONSERVATIVE UNION: It is saying to these 6,000 people at least and whatever they may represent, you're really not somebody that I have to pay attention to.

SCHNEIDER: McCain may be trying to have it both ways, mending fencing with conservatives while not getting too close to them. After all, President Bush and the Iraq War are not popular right now. But here's a surprise. You hear a lot of criticism of President Bush and the Iraq War among conservative activists.

KEENE: There's a split in the movement as there is in the American public as to what should be a proper position, vis-a-vis the Iraq War.

SCHNEIDER: So is any 2002 candidate making headway with conservatives? Here's another surprise. Rudy Giuliani. The pro- choice, pro gay rights, former New York City mayor? Yes, him.

GROVER NORQUIST, AMERICANS FOR TAX REFORM: He's not as liberal on issues as people assumed because he was from New York. And as people learn where he's on judges, where he is on some of these other issues, people go, oh that's not so bad.

(END VIDEOTAPE)

SCHNEIDER (on camera): If McCain has moved closer to the Republican Party and closer to Bush, he may not score many points with conservatives. I asked the chairman of the conference, what the mood of conservatives is right now. His answer, they're mad at the Republican Party. They're mad at the leadership. They're mad at the White House. Kitty?

PILGRIM: Interesting stuff. Thanks very much, Bill Schneider.

Turning now to the war in Iraq. The U.S. Army this week found a huge insurgent arms cache and it says the cache included explosives made in Iran. The military said the plastic explosives are used to make explosives formed projectiles, EFPs. The single most dangerous weapon used against our troops in Iraq. Joining me now, one of the country's most distinguished military commanders, General David Grange.

Thanks for being with us. Do you believe that we're doing enough about these -- to protest these Iranian munitions?

BRIG. GEN. DAVID GRANGE (RET), CNN MILITARY ANALYST: I think we could do more. A lot has been done. It has been done for quite some time. It just hasn't been talked about. Pursuing those Iranian agents, munitions, weaponry that's in Iraq used against American G.I.s. The pressure has increased and good for that and it will continue do so.

PILGRIM: How do you assess the strength of the Quds Force? This is the Iranian force that's supposedly helping the insurgents in Iraq.

GRANGE: I think it's very much like the Iranian special forces under the shah. I had the opportunity to serve and train with Iranian special forces in the early '70s along the Iraqi border and they were pretty tough soldiers. And I believe the Quds Force is like that. They're well trained, they're dedicated, they're almost obsessed and they are very actively engaged in many places like in Iraq, Lebanon, in Syria, and possibly in Israel.

PILGRIM: The security crackdown has been going on about two weeks in Baghdad, General Grange. How do you assess its progress or is there a way to do that?

GRANGE: Well, I think it has been assessed by some American generals already. And I think so far, so good. We can't expect too much up front. Remember, in this phase, surge, reinforcement, whatever you want to call it, that not all the American soldiers will be over there until some time in May. Even though actions have already started. And so in this phase, I think there's a lot of results where either some stability's been maintained. The militias and insurgents have faded into the woodwork in many cases. Leaders, militia leaders, have fled for fear of capture. But remember this is only the first phase and it's going to take a while to transition, then, what the Americans do to a total of Iraqi force and that's tough part.

PILGRIM: I would like to turn to Afghanistan. How do you assess the new Taliban spring offensive that's expected?

GRANGE: Well, I think it will happen. I think that Taliban has been training, staging, getting ready for these attacks. I think they've went ahead and shaped the operating environment in Afghanistan in certain areas. Threatening villagers. Certain places where they'll need that support to launch their attacks. So it's going to happen.

PILGRIM: Do you think that U.S. troops have to cross into Pakistan to sort of take charge of this area?

GRANGE: Well, would that be optimum. But there's a very delicate situation. I think that the NATO forces are doing all they can right now to get ready for this and they're actively patrolling. It's not like the NATO forces are doing nothing but to go into Pakistan as a very delicate situation, because it really challenges and puts Musharraf on a very tough position where he has a fragile government already. And being a nuclear country, that's a tough one to push too hard.

PILGRIM: All right, I really can't let you go without asking you, how you view the mess at Walter Reed and the dismissal of the commander there.

GRANGE: I think it's been proven that there's some substandard conditions in Walter Reed. I think it was good for the media actually to expose that. Because that's not the way that soldiers and families visiting soldiers and that, out-patient troops that they are, should live and be treated. I've seen a lot of that after Vietnam. That's not correct.

And if you are responsible in your command for those condition, then you're accountable. So I think you have to take action immediately.

PILGRIM: There's much discussion that there is not paint jobs, that this is a systemic problem, do you agree with that?

GRANGE: It probably is some systemic problems to this. I think they'll find more and we may see some more hard action being taken on senior leaders that don't meet the task.

PILGRIM: All right, thank you very much. General David Grange, thank you.

GRANGE: My pleasure.

PILGRIM: A reminder now to vote in tonight's poll - do you believe that illegal aliens should be eligible for in-state tuition at Americans colleges and universities while U.S. citizens are denied the same privilege? Yes or no, cast your vote at loudobbs.com. We'll bring you the results in just a few minutes.

Still ahead, trying to bridge the trade gap between the United States and China. We'll talk to one of the co-sponsors of the fair currency bill.

Also, two California legislators want to give away $500 to every child in the state. Even to children whose parents are in this country illegally. We'll take a look at this controversial proposal.

(COMMERCIAL BREAK)

PILGRIM: My next guest says communist China should be held accountable for unfair trade practices. Democratic Congressman Tim Ryan and Republican Congressman Duncan Hunter reintroduced the fair currency bill. And Congressman Ryan joins us now. Thanks for being with us.

REP. TIM RYAN, (D) OH: Good to be with you, Kitty.

PILGRIM: You were fairly outraged over the way China's conducting its trade policies and given it's one of our biggest trading partners, it demands some action. First of all, just sum up for us what you think China's doing wrong.

RYAN: They're basically subsidizing their goods coming over here. They're not doing it in the traditional way. They're doing through a series of economic and financial maneuvers to manipulate the value of their currency. And basically they get a 40 percent advantage, their goods land on the shore here. And they have a 40 percent advantage over American goods. We're calling that a subsidy in our bill. And it should be subject to countervailing duties. Meaning if they keep doing it, we should put a tariff on the good for the currency manipulation.

PILGRIM: And quite honestly, what American business can compete against a 40 percent advantage? Let's just take a look at couple points in the bill so our viewers know what's in it. Define currency misalignment as a prohibited export subsidy. Hold China accountable for unfair misalignment. Protect U.S. national security and defense industrial base and require the secretary of treasury to take action.

It seems like they're very strong measures. How confident are you that this will pass? This is a bipartisan effort between you and a Democrat (sic), Congressman Duncan Hunter. And actually let me go to a quote that we'll read for our viewers that you said yesterday. "Democrats and Republicans, manufacturers and labor and representatives from all over the country have come together on this common-sense legislation which only asks China it live up to the standards it agreed to when it joined the WTO."

And I think that's a fact they think many of our viewers may forget that China is a member of the WTO and is not living up to its arrangements. RYAN: That's all we're doing. This isn't china bashing. China has great culture. A long-standing culture. Much older than the culture we have in the United States and I respect it. But if they're going to be in the WTO, they've got abide by the rules like everybody else. I think that's what we're trying to do here.

And when you have pro-free traders and anti-free traders and you have business and labor and you have Democrats and Republicans, all on the same page with a piece of legislation, that means that we should move on it. I'm excited about the fact that Charlie Rangel, who's the chair of the Ways and Means Committee, Sander Levin who is chair of the Trade Subcommittee on Ways and Means, are both talking about China and the impact it's having.

From Youngstown, Ohio and Akron, Ohio, I don't have to explain back home what the ramifications have been competing on the global economy. But to add to that the fact that China's not living up to what they agreed to live up to by joining the World Trade Organization, that's a whole different story. And that means Congress needs to move on it and the president needs to move on it.

I want to correct you real quick because Duncan Hunter is running as a Republican in the Republican presidential primary. I'm the Democrat.

PILGRIM: I'm sorry.

RYAN: But I don't want him to lose any votes in the primary due to his association with me.

PILGRIM: That's a huge mistake on my part. My apologies to Congressman Hunter.

RYAN: That's all right.

PILGRIM: And you tried to get this fixed in the last Congress and didn't go through. Are you optimistic you can get it through?

RYAN: Much more optimistic. We were running into brick walls last year with the Republican led Congress. Charlie Rangel, as I said, encouraged me to offer this piece of legislation and we're going to move forward on it. I can't believe the kind of comprehensive support we have for this and I'm excited about this.

And hopefully this means there will be a - if this passes and China puts the currency at the value it should be at, there will be $500 billion more dollars invested in the United States instead of China and that means 5 million new jobs. I think we could use the shot in the arm in this economy.

PILGRIM: We could certainly use a level playing field in that case. Congressman, thank you very much for coming on and explaining it.

Coming up the top of the hour THE SITUATION ROOM WITH WOLF BLITZER. Wolf? WOLF BLITZER, CNN HOST: Thank you very much, Kitty. Deadly tornadoes killing at least 14 people in Alabama and Missouri. Our Jamie McIntyre is live on the scene at Enterprise, Alabama, where a high school was in the lethal path of a twister. We'll have more on that.

And a resurgent Taliban with deadly intent toward America. What's behind the comeback? Brian Todd reporting.

Senator John McCain makes major lose on "Letterman." do politicians get a bounce after talking on the late-night talk show hosts? We're going to tell you what's going on. We'll take a closer look. All after this coming up, Kitty, right here in THE SITUATION ROOM.

PILGRIM: Thanks very much, Wolf.

A controversial proposal's making its way through the California's legislature. A new bipartisan bill would give newborns in the state a $500 savings account funded by taxpayers and as Casey Wian reports, all children would be eligible including those whose parents are in this country illegally.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): Welcome to the world, and here's 500 bucks. Every baby born in the state of California could soon receive a $500 savings account under a bill sponsored by a bipartisan group of state senators.

DARRELL STEINBERG, (D) CALIFORNIA STATE SENATE: Anything we can do to encourage savings and investment and to provide a young adult especially young adults from lower-income families. Families of modest means, to be able to have a small nest egg to go to college, to learn a career or put a down pilot a house is a good thing.

WIAN: It would cost state taxpayers about $285 million a year to fund savings accounts for the more than 500,000 babies born annually in California. At age 18, children would have to repay the original $500 gift but would keep interest and additional deposits tax-free. The accounts would be opened to all children regardless of the immigration status of their parents. Critics say that, and Governor Arnold Schwarzenegger's plan to give free health care to all California children, could devastate California's economy.

KRIS VOSBURGH, HOWARD JARVIS TAXPAYERS ASSOCIATION: If we start becoming the welfare magnet we were in the early 1990s before welfare reform, we're going to be drawing in more and more poor people from out of state and out of country. And if we do this, instead of accomplishing redistribution of wealth, we're going to be redistributing poverty.

UNIDENTIFIED MALE: This is a classic good idea.

WIAN: In 2005, federal lawmakers introduced a similar bill that so far has gone nowhere. However a spokeswoman for New York Senator Chuck Schumers he's looking for a Republican cosponsor to revive the idea of a taxpayer-funded children's savings account nationwide.

(END VIDEOTAPE)

WIAN: A similar, even more generous plan, has been in effect in Great Britain since 2002. About three million accounts were opened during the program's first four years. Kitty?

PILGRIM: Thanks very much, Casey Wian. Still ahead, the results of tonight's poll. Stay with us.

(COMMERCIAL BREAK)

PILGRIM: In tonight's poll, 97 percent of you say illegal aliens should not be eligible for in-state tuition at American colleges and universities while U.S. citizens are denied the same privilege.

Time now for one last e-mail. Donald in Arizona. "Please remind all Americans to pay their taxes this year. Twenty million illegal aliens depend on us."

We love hearing from you. Send us your thoughts at loudobbs.com. And thanks for being with us tonight. Please join us tomorrow. For all us here, good night from New York. THE SITUATION ROOM starts right now with Wolf Blitzer. Wolf?

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

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