PBS NewsHour - 2009-02-26

Channel: malgent

Transcript

Language: English (original, YouTube automatic captions)

[0:15] [music]

[0:20] Good evening. I'm Judy Woodruff. On the

[0:21] NewsHour this Thursday, the lead story,

[0:24] President Obama rolls out his first

[0:26] budget. The rest of the day's news,

[0:28] including the Pentagon decision to allow

[0:31] photographs of the caskets of America's

[0:33] war dead. Then, three takeouts on the

[0:36] economic blueprint, an interview with

[0:39] budget director Peter Orzac, a taxes

[0:42] versus spending debate, and a look at

[0:44] the new healthc care proposals. Plus,

[0:47] another story from our Arab Arts

[0:49] Festival series. Tonight, three women

[0:52] artists from Cairo.

[0:56] Major funding for the NewsHour with Jim

[0:58] Ler is provided by

[1:02] >> The world is changing and how we use

[1:05] energy today cannot be how we'll use it

[1:08] tomorrow. There is no one solution. It's

[1:12] not simply more oil, more renewables or

[1:14] being more efficient.

[1:16] It's all of it. Our way of life depends

[1:19] on developing all forms of energy

[1:22] [music] and to use less of it. It's time

[1:25] to put our differences aside. Will you

[1:27] be part of the solution? Chevron, human

[1:30] energy.

[1:31] >> What has made Grant Thornton a truly

[1:33] global accounting organization with

[1:36] access to resources in more than 100

[1:38] countries? Is it their global

[1:40] capabilities or is it their passion for

[1:42] how they serve their clients? Grant

[1:45] Thornton,

[1:47] >> the Atlantic Philanthropies.

[1:50] [music]

[1:51] and with the ongoing support of these

[1:53] institutions and foundations.

[1:57] [music]

[1:59] And this program was made possible by

[2:02] the Corporation for Public Broadcasting

[2:05] and by contributions to your PBS station

[2:08] from viewers like you. Thank you.

[2:11] [music]

[2:14] >> President Obama laid out the highlights

[2:16] of his first budget proposal today for

[2:19] Congress and the nation. It was a plan

[2:21] replete with record spending and

[2:23] deficits and huge numbers for everything

[2:26] from health care to bank rescues.Wami

[2:29] Hullman has our lead story report.

[2:32] >> Budget director Peter Orzite personally

[2:35] delivered the 134 page outline to

[2:38] Congress's budget chairman this morning

[2:40] on the Capitol Plaza.

[2:42] It was a $3.5 trillion blueprint for

[2:45] government spending, the largest ever,

[2:47] and it projected by far the largest

[2:49] deficit ever at 1 trill750

[2:52] billion, more than four times the red

[2:55] ink for this year. President Obama

[2:57] acknowledged the grim numbers in his

[3:00] rollout announcement.

[3:01] >> In keeping with my commitment to make

[3:03] our government more open and

[3:04] transparent, this budget is an honest

[3:07] accounting of where we are and where we

[3:09] intend to go. As a result, the deficit

[3:11] would top 12% of the nation's gross

[3:14] domestic product. It's the largest in

[3:16] terms of GDP since World War II, driven

[3:19] by the costs of the financial rescue

[3:21] package and the economic stimulus plan.

[3:24] Another major chunk of the spending,

[3:26] $634 billion, would go for a down

[3:29] payment on universal health care.

[3:31] Because of crushing health care costs

[3:34] and the fact that they drag down our

[3:35] economy, bankrupt our families, and

[3:37] represent the fastest growing part of

[3:39] our budget, we must make it a priority

[3:42] to give every single American quality,

[3:44] affordable healthcare. More help for the

[3:47] financial industry also is in the budget

[3:50] in the form of another $250 billion for

[3:53] bank rescues. Ultimately, the total cost

[3:56] of that effort could be more than double

[3:58] the 700 billion already approved. The

[4:01] president said he's included for the

[4:04] first time the actual costs of fighting

[4:06] in Iraq and Afghanistan. The Bush

[4:08] administration relied heavily on

[4:10] off-budget supplemental funding. For too

[4:13] long, our budget has not told the whole

[4:14] truth about how precious tax dollars are

[4:17] spent. Large sums have been left off the

[4:19] books, including the true cost of

[4:22] fighting in Iraq and Afghanistan. For

[4:24] this year, the cost is expected to be

[4:27] 130 billion. That's in addition to more

[4:30] than 500 billion in overall military

[4:32] outlays. But even with all the spending,

[4:36] the president set a goal of cutting the

[4:38] deficit in half within four years. Just

[4:41] as a family has to make hard choices

[4:42] about where to spend and where to save,

[4:45] so do we as a government. You know,

[4:47] there are times where you can afford to

[4:49] redecorate your house, and there are

[4:51] times where you need to focus on

[4:52] rebuilding its foundation. To do that,

[4:54] the administration has targeted $2

[4:56] trillion of cuts over 10 years. About

[5:00] three quarters would come from gradually

[5:02] reduced spending on the wars. In

[5:05] addition, Medicare payments to insurance

[5:07] companies and hospitals would be cut

[5:09] along with agricultural payments to some

[5:12] of the largest farmers. At his own

[5:14] briefing, White House budget director

[5:16] Orzag addressed the need for cuts.

[5:18] >> We are on an unsustainable fiscal

[5:20] course. There's not a single line in the

[5:23] budget that won't have someone who cares

[5:27] about it very strongly. And yet, if we

[5:30] allowed those all of those lines to

[5:32] persist and grow over time, we would

[5:35] wind up with a fiscal crisis.

[5:37] >> Change on the tax side would mean

[5:39] letting the Bush administration tax cuts

[5:42] for the wealthiest Americans expire at

[5:44] the end of 2010. And there's projected

[5:47] revenue from a new source, the plan for

[5:50] a market-based cap and trade system for

[5:52] selling permits on greenhouse gas

[5:55] emissions. These must be the priorities

[5:57] reflected in our budget. For in the end,

[5:59] a budget is more than simply numbers on

[6:01] a page. It is a measure of how well we

[6:04] are living up to our obligations to

[6:05] ourselves and one another. It is a test

[6:09] for our commitment to making America

[6:11] what it was always meant to be, a place

[6:13] where all things are possible for all

[6:15] people. As always, the budget's view of

[6:19] what's possible was based on economic

[6:21] forecasts. the chair of the Council of

[6:24] Economic Adviserss, Christina Romer.

[6:26] >> We are projecting year-over-year GDP

[6:29] growth of minus 1.2% in 2009.

[6:34] Like most other forecasters, we

[6:36] anticipate that real GDP will fall

[6:38] significantly in the first quarter of

[6:40] this year. We expect it to bottom out

[6:43] sometime around midyear 2009 and begin

[6:47] growing again by the end uh of the year.

[6:50] The budget outline was widely

[6:52] anticipated on Capitol Hill, and the

[6:54] huge numbers in the plan provoked

[6:56] reactions that were swift and sharply

[6:58] divided. House Republican leader John

[7:01] Boehner condemned it.

[7:02] >> The era of big government is back, and

[7:05] Democrats are asking you to pay for it.

[7:09] The administration's uh plan, I think,

[7:11] is a job killer, plain and simple, and

[7:14] it raises taxes on all Americans while

[7:17] we're in the middle of a recession. But

[7:19] House Speaker Nancy Pelosi said the

[7:21] president has to clean up a mess that

[7:24] Republicans created.

[7:25] >> This is a budget about a new era of

[7:28] responsibility. This is about

[7:30] accountability,

[7:32] fiscal discipline, cutting waste, fraud,

[7:35] and abuse, removing things like Medicare

[7:38] advantage, which are a disadvantage to

[7:41] the American taxpayer. Some moderate

[7:44] Democrats, such as Tennessee's Jim

[7:46] Cooper, voiced concerns about the

[7:48] budget's size, but he also gave the

[7:50] president credit. Do these numbers scare

[7:52] you? They do scare me, but I'm glad that

[7:56] the president's new budget is the most

[7:57] honest budget we've seen in a long, long

[7:59] time. Now, honest also means ugly. And a

[8:03] lot of Americans aren't used to

[8:04] politicians telling the truth. So, in

[8:06] the choice between makeup or no makeup,

[8:08] I go for the natural look.

[8:10] >> Now, I understand. But Texas Republican

[8:12] Jeb Henserling contended the outline had

[8:15] far more serious problems.

[8:16] >> The budget should have been printed in

[8:18] red ink instead of black ink. You know,

[8:20] American families are hurting. They're

[8:22] having to tighten their belt. The least

[8:24] Washington could do is level fund the

[8:27] government from one year to the next.

[8:29] There's no history of a nation borrowing

[8:33] and spending its way into prosperity.

[8:37] On the Senate side, the top leaders of

[8:39] the budget committee also weighed in.

[8:42] New Hampshire Republican Jud Greg said

[8:44] the president made no real effort to

[8:46] tackle the rising costs of Social

[8:48] Security and Medicare.

[8:50] >> Until we address this looming fiscal

[8:53] tsunami, and I'm sorry to keep using the

[8:54] term, but that's what it is, which is

[8:56] going to wipe out our children's chances

[8:58] of having a successful future. We aren't

[9:00] going to be able to say that we're going

[9:02] to be able to stabilize the federal

[9:04] government as a portion of the economy.

[9:07] >> Democrat Kent Conrad of North Dakota

[9:09] agreed on the need for reforming the

[9:11] entitlement system, but said spending

[9:13] cuts alone won't do it.

[9:15] >> We got to address the revenue base. My

[9:18] own belief is

[9:20] the revenue system of the country has

[9:24] got to be fundamentally reformed. It's

[9:26] just out of date.

[9:28] Uh it was largely written 40 and 50

[9:31] years ago and it no longer deals with

[9:33] the world we live in today.

[9:35] >> The president plans to release the more

[9:37] detailed budget by mid to late April.

[9:40] The new fiscal year begins October 1st.

[9:44] >> Wall Street fell again today, reacting

[9:46] in part to the president's healthc care

[9:48] plans. Stocks in medical and drug

[9:50] companies were down on concerns they

[9:52] would lose money under the new

[9:54] proposals. The Dow Jones Industrial

[9:56] Average lost more than 88 points to

[9:59] close at 71.82.

[10:01] The Nasdaq fell more than 33 points to

[10:03] close at 1391.

[10:06] Claims for people who are out of the job

[10:08] have reached their highest level since

[10:10] October of 1982. The Labor Department

[10:13] reported that new claims rose more than

[10:16] expected last week to 667,000.

[10:20] A total of more than five million

[10:22] Americans are now receiving unemployment

[10:24] benefits. That number is expected to

[10:26] keep rising. Today, JP Morgan Chase

[10:30] announced that it is cutting 12,000

[10:32] jobs. It's now official. The nation's

[10:35] banks lost money at the end of 2008 for

[10:38] the first time in 18 years. The Federal

[10:41] Deposit Insurance Corporation reported

[10:43] that the losses topped$ 26 billion in

[10:46] the fourth quarter. At a congressional

[10:48] hearing, Paul Vulker, leading the

[10:50] president's economic recovery advisory

[10:52] board, said the solution is a return to

[10:55] basics.

[10:56] >> Banks ought to go back in the banking

[10:58] business. Uh maybe is a very

[11:00] old-fashioned idea, but I think we ought

[11:03] to have a core.

[11:06] recent events show how dependent we are

[11:08] on banks as a kind of custodians of the

[11:12] system part of the system and let's not

[11:15] get them distracted

[11:17] by the glamour of speculating in the

[11:21] capital markets

[11:22] >> for the year as a whole the banking

[11:24] industry actually made a profit $16

[11:26] billion but it was the smallest annual

[11:29] gain since 1990

[11:32] US automakers also reported steep losses

[11:34] for 2008, General Motors announced that

[11:37] it went nearly $ 31 billion in the hole

[11:40] as sales plunged. The auto giant has

[11:43] already accepted more than $13 billion

[11:46] in federal rescue funds and it's asking

[11:48] for more. Ford reported losing nearly

[11:51] $15 billion last year. Chrysler lost 8

[11:55] billion. New home sales had their worst

[11:58] showing last month since government

[12:00] records began in 1963. The Commerce

[12:03] Department reported that sales were down

[12:05] more than 10%. The average home price

[12:08] fell below $235,000.

[12:12] The report came as the US House of

[12:14] Representatives delayed action on

[12:16] letting bankruptcy judges cut mortgage

[12:19] payments for some homeowners. The

[12:21] banking industry has lobbied hard

[12:23] against the measure. In a policy change,

[12:26] the Defense Department will allow news

[12:29] photographs of the coffins of America's

[12:32] war dead. The announcement today ended a

[12:34] ban going back almost 20 years. NewsHour

[12:37] correspondent Spencer Michaels has more.

[12:41] Every week, coffins of fallen soldiers

[12:43] and Marines arrive at Dover, Delaware

[12:45] Air Force Base, but the public rarely

[12:48] sees them. Media coverage of the

[12:50] transfer ceremonies at Dover has been

[12:53] banned since 1991.

[12:56] Today, Defense Secretary Gates announced

[12:58] a partial reversal of that ban. After

[13:01] receiving input from a number of

[13:03] sources, including all the military

[13:05] services and organizations representing

[13:07] military families,

[13:09] I have decided that the decision

[13:11] regarding media coverage of the

[13:13] dignified transfer process at Dover

[13:16] should be made by those most directly

[13:18] affected. on an individual basis by the

[13:21] families of the fallen. We ought not

[13:24] presume to make that decision in their

[13:26] place.

[13:28] Coverage of military funerals has been

[13:30] left to surviving families to decide.

[13:33] The ban on photographing the do

[13:35] transfers became particularly

[13:38] controversial during the Iraq war.

[13:40] Anti-war groups and news organizations

[13:43] criticized the policy. Military families

[13:46] were divided. Having the media present

[13:49] shows a lack of respect for the privacy

[13:52] of the overwhelming number of gold star

[13:55] family members who do not want the media

[13:58] present. I don't feel like he ought to

[14:00] be snuck in on a plane in the middle of

[14:02] the night when no one knows. People

[14:05] ought to be told just like when they

[14:07] just like when they welcome the soldiers

[14:08] when they come back from Iraq.

[14:10] >> Secretary Gates acknowledged splits

[14:13] within the Pentagon about lifting the

[14:15] ban.

[14:15] >> I'll be perfectly honest about it. Uh

[14:17] there was a division in the building. Uh

[14:20] and um and I I thought that the um

[14:26] and I sided with those who thought that

[14:28] it the issue ought to be up to the

[14:29] families.

[14:30] >> And so what changed there? Is there not

[14:32] still a division?

[14:34] >> No, I'd say there still is a division,

[14:36] but not anymore.

[14:38] >> A Pentagon working group will develop

[14:40] guidelines for the new policy. The

[14:42] secretary expects its recommendations

[14:45] soon.

[14:47] Residents of the District of Columbia

[14:49] took a giant step today toward getting a

[14:51] vote in Congress. The Senate passed a

[14:53] bill giving Washington DC a seat in the

[14:56] US House. The city is heavily

[14:58] Democratic. So, as a compromise, the

[15:00] bill also adds a House seat for the

[15:03] mostly Republican state of Utah. The

[15:05] House takes up the bill next week.

[15:08] Anti-government riots erupted in

[15:10] Pakistan today after two opposition

[15:12] leaders were barred from elected office.

[15:15] The Pakistani Supreme Court ruled

[15:17] yesterday against former Prime Minister

[15:19] Nawaj Sharif and his brother who was

[15:22] governor of Punjab province. Today,

[15:25] hundreds of demonstrators barricaded the

[15:27] streets with burning tires in and around

[15:30] Islamabad, the capital. They marched

[15:33] with banners and chanted slogans. Border

[15:36] guards in Bangladesh laid down their

[15:38] arms today after revoling over low

[15:41] wages. Yesterday they turned on

[15:43] commanding officers during a conference.

[15:46] Today they surrendered after tanks

[15:48] besieged their headquarters and the

[15:50] prime minister promised to address their

[15:52] grievances. At least 11 people were

[15:54] killed during the insurrection.

[16:06] And still to come on the NewsHour

[16:08] tonight, the man in charge of President

[16:10] Obama's budget, tax and spending

[16:13] increases, the healthc care initiative,

[16:16] and three women of Cairo. I spoke with

[16:19] budget director Peter Orzag from the

[16:21] White House briefing room just a short

[16:23] time ago. Peter Orzag, thank you very

[16:26] much for talking with us.

[16:28] >> Good. Good evening.

[16:29] >> Uh 3.6 6 trillion. Is that a number you

[16:33] can actually grasp?

[16:35] >> Obviously, it's a big number. We have to

[16:36] realize we're facing two very serious

[16:39] challenges. One is the economic crisis

[16:41] we face. That was the focus of the

[16:43] recovery act. And the second is we've

[16:44] got these large deficits going out over

[16:46] time and we do need to get them down uh

[16:49] as we as we emerge from the recession.

[16:51] >> Well, just two of the terms I heard

[16:53] applied to it today were number one

[16:55] radical and the other one was taking

[16:56] from the rich to give to the poor. Is

[16:59] this about redistributing wealth in this

[17:02] country?

[17:02] >> No, I think this is fully consistent

[17:04] with what the president campaigned on.

[17:06] We we do face these structural deficits

[17:08] in out years and we also need to make

[17:10] some key investments in energy and

[17:12] education and healthcare. We are asking

[17:14] for a I guess a greater sense of shared

[17:17] responsibility and there are some

[17:18] revenue increases that will be borne by

[17:22] those making more than a4 million

[17:23] dollars a year after the economy starts

[17:26] to recover and in 2011 and thereafter.

[17:28] Well, you said those who earn more.

[17:30] You're proposing to raise taxes, I

[17:32] guess, on couples earning over $250,000

[17:35] a year. What percentage of taxpayers

[17:37] would that be? And how did you arrive at

[17:40] that that number? That was the number

[17:42] that that the president campaigned on.

[17:44] So again, this is consistent with his uh

[17:46] campaign proposals. Uh it's basically

[17:48] about 5% of American taxpayers. For the

[17:51] other 95%, they would be experiencing a

[17:53] tax reduction through the making work

[17:56] pay tax credit. Well, the person

[17:57] President Obama had asked to be his

[17:59] commerce secretary, Senator Jud Greg,

[18:02] who later, as we know, backed out, had

[18:04] this to say today about your budget

[18:06] proposal. He said, "This plan is once

[18:08] again a missed opportunity for American

[18:11] taxpayers." He said, "It raises taxes on

[18:13] all Americans, implements massive new

[18:15] spending, and fails to make any tough

[18:18] choices to control the deficit." Well,

[18:21] uh, let's be clear about the facts here.

[18:23] We're inheriting deficits that under

[18:24] current policies amount to $9 trillion

[18:27] over the next decade. We're reducing

[18:28] those deficits significantly. We have $2

[18:31] trillion in deficit reduction. It's

[18:33] coming roughly half from uh additional

[18:35] revenue and half from spending

[18:37] reductions. The spending under this

[18:39] budget is lower than if we did nothing

[18:41] at all. And I'd also note quite

[18:43] importantly, we are making the

[18:44] investments in reforming our health care

[18:46] system and making it more efficient that

[18:48] are absolutely essential to the

[18:50] long-term fiscal h health of the nation.

[18:52] And that will also help to raise workers

[18:55] take-home pay because too much of our of

[18:58] our economy is being devoted to an

[18:59] inefficient health system. Well, the

[19:01] most frequently repeated criticism, I

[19:03] guess, from Republicans I've been

[19:05] hearing is they say, "You want to raise

[19:06] taxes on the nation's entrepreneurs,

[19:09] small business owners at the very time

[19:12] when the country's in a recession?" And

[19:14] they're saying, "What's the incentive

[19:15] going to be then for these people to

[19:17] grow their companies and hire uh and and

[19:20] create jobs?" Well, let's be clear

[19:22] again. The tax proposals that we're

[19:23] talking about kick in in 2011 and

[19:25] thereafter. So this talk about raising

[19:27] taxes during a recession is just not

[19:29] factually accurate. And in fact, if you

[19:31] look at the recovery act, what was just

[19:34] done was a tax reduction partly to spur

[19:37] the economy when it is particularly

[19:38] weak. But as we emerge from the downturn

[19:41] and return to more normal periods of

[19:43] economic growth, we do need some

[19:45] additional revenue to fund investments

[19:48] in education, energy, and healthcare.

[19:50] And that is what this budget contains

[19:52] along with some savings on the on the

[19:54] spending side.

[19:55] >> But if the recession is not over by say

[19:58] 2011, are there then pro provisions? Are

[20:02] you prepared then to delay these tax

[20:04] increases? Well, again, one of the

[20:06] purposes of the recovery act was to jump

[20:08] start the economy and get it back on

[20:10] track. I think uh we we're anticipating

[20:12] the economy will be growing before 2011.

[20:14] Let's uh leave the hypothetical as to

[20:17] what would occur if that's not the case

[20:18] for the future. But still, aren't you

[20:21] making some I mean, you look at some of

[20:22] the proposals in here, you really are or

[20:24] are you making major assumptions here

[20:28] about some huge changes over some very

[20:31] controversial tax questions, how energy

[20:34] is taxed, healthcare, a lot of

[20:36] assumptions here. Well, no, I wouldn't

[20:38] there are bold proposals, but that's

[20:40] what's required. We have major problems

[20:42] that need to be addressed in our health

[20:44] care system in terms of reducing our

[20:47] dependence on foreign uh oil and

[20:49] improving energy efficiency and

[20:51] improving our educational system. So in

[20:54] some sense what we're talking about are

[20:56] the investments that are required to

[20:58] make a real difference and if uh that

[21:01] that's what's contained in this budget

[21:04] you know well let me just say it ask you

[21:06] about two specific things and that is

[21:08] the criticism that here we are uh in an

[21:11] economic crisis in this country at the

[21:13] heart of it is a housing uh crisis. Is

[21:16] it smart to reduce the tax deductions

[21:19] that people can take for the interest

[21:21] they pay on home mortgages at a very

[21:23] time when you're trying to get people to

[21:25] buy houses? Well, again, that provision

[21:27] kicks in in 2011. All that would be

[21:29] involved here is returning the tax break

[21:31] for say mortgage interest for the very

[21:33] highest income folks, those earning more

[21:35] than $250,000 a year to the rate that

[21:39] applied at the end of the Reagan

[21:40] administration. And I think we have a

[21:42] fundamental question. If a middle-income

[21:44] family pays $10,000 in mortgage

[21:46] interest, they currently save $1,500 on

[21:49] their taxes. If Bill Gates makes that

[21:51] same $10,000 mortgage interest payment,

[21:54] he saves $3,500 on his taxes. We're just

[21:57] saying, why why shouldn't that be $2,800

[21:59] instead after the economy has recovered

[22:02] and again in 2011 and thereafter, use

[22:05] the money to reform the health system?

[22:07] and connected to all this at a time when

[22:10] when charities uh nonprofit

[22:12] organizations are having a harder time

[22:14] than ever uh winning uh contributions

[22:17] and donations from people uh you would

[22:21] presume to cut tax deductions for

[22:23] charitable contributions. Well, again, I

[22:25] want to be clear about the timing here.

[22:27] This is in, you know, this is at in 2011

[22:30] and thereafter after the economy uh

[22:32] presumably has begun to recover.

[22:34] Furthermore, I think most people don't

[22:37] make charitable contributions based just

[22:38] on the the tax incentive. And again, I

[22:41] would say all we are doing is returning

[22:43] the tax incentive for charitable

[22:45] contributions to the level that existed

[22:46] at the end of the Reagan administration.

[22:49] Charitable contributions were healthy

[22:50] then. I'd finally say if you want to put

[22:52] on the green eye shades and say uh

[22:54] charitable contributions are

[22:56] disproportionately governed by narrow

[22:58] financial incentives, there are other

[23:00] offsetting proposals in this budget that

[23:03] will mean that the financial incentives

[23:05] for charitable contributions are roughly

[23:07] a wash.

[23:08] >> You've mentioned the Reagan

[23:09] administration a few times. Is that a

[23:10] model for what you were doing here?

[23:12] >> No, not at all. I'm just saying at that

[23:14] time again uh in exchange for making a

[23:17] $10,000 mortgage interest payment or a

[23:19] $10,000 uh charitable contribution a

[23:22] high income family received a $2,800 tax

[23:24] break. That's exactly what would be

[23:26] provided in 2011 and thereafter under

[23:29] this proposal. There's also uh and

[23:32] finally Peter Orzag, those who are

[23:33] saying you've made surely you've made

[23:35] some moves to uh to cut spending, but

[23:38] that so much of the spending cuts you're

[23:40] assuming uh have to do with ending uh

[23:43] the war in Iraq, bringing home the

[23:45] troops there, with ending uh the

[23:47] spending on the Bush uh President Bush's

[23:50] tax cuts, and and the argument there is

[23:53] that that there should have been a more

[23:54] serious effort made to cut federal

[23:57] government spending. Well, there was a

[23:58] very serious effort made, but let's also

[24:00] reme and for example, we have $50

[24:02] billion in reduced erroneous payments

[24:05] under uh to Medicare providers as part

[24:08] of the Social Security Administration,

[24:10] reducing the tax gap contained in this

[24:12] uh in this budget. We are eliminating

[24:14] programs, but you have to remember we've

[24:16] been in office 5 weeks. This is a budget

[24:18] overview as is normal at this stage for

[24:21] a during a transition year. There will

[24:23] be more details to come in April. And as

[24:25] we move through the year, we'll continue

[24:27] to scour the budget to look for

[24:29] additional savings. But after five

[24:32] weeks, I think we've already found a

[24:34] bunch of stuff that we are saying

[24:36] doesn't work as well as it should.

[24:38] >> And I guess you're looking for Congress

[24:39] to have its whack at it, too.

[24:41] >> Well, that's part of the process.

[24:43] >> All right. Peter Orzag is the director

[24:44] of the Office of Management and Budget.

[24:46] Thank you.

[24:47] >> Thank you.

[24:50] [music]

[24:55] Next, the debate over taxes and spending

[24:57] in this budget blueprint. Jeffrey Brown

[25:00] picks up that part of the story.

[25:01] >> And to pick up on some of the big

[25:03] changes we've just been hearing about,

[25:05] we've invited back two economists we

[25:06] heard from earlier this week for a

[25:08] budget preview. Robert Greenstein,

[25:10] director of the center on budget and

[25:12] policy priorities, and Douglas Holtz

[25:14] Eeken, former director of the

[25:15] Congressional Budget Office and economic

[25:17] adviser for John McCain's presidential

[25:19] campaign. Doug Holtzen, start on the

[25:22] spending side. The the the scale of it,

[25:24] is it is it viable?

[25:26] >> Well, I I think this budget is

[25:28] politically and economically risky uh

[25:30] precisely because it doesn't have enough

[25:32] spending reduction. Uh if you look at

[25:33] what you've got, you've got about $2

[25:35] trillion in deficit reductions. that

[25:37] comes from uh a trillion and a half in

[25:40] Iraq and Afghanistan reductions. They're

[25:42] largely elucery. They pretend we would

[25:43] have spent $170 billion a year for a

[25:45] long time and and we're not. Uh and then

[25:48] a $700 billion increase in revenues from

[25:50] a cap and trade program that has never

[25:52] even come close to getting through the

[25:53] US Congress. So that's the deficit

[25:55] reduction. Uh not obvious it'll come to

[25:58] fruition. And then the rest is about a

[26:00] trillion dollars of tax increases on uh

[26:02] high-income individuals and businesses

[26:04] to fund uh trillion dollars in tax cuts

[26:06] that are already on the books from the

[26:08] stimulus bill uh with making work pay,

[26:11] earn income tax credit, things like

[26:12] that. So you've got a dynamic where

[26:14] they're counting on things that are

[26:16] either elucery and hard to make happen

[26:18] politically, capp trade and tax

[26:19] increases to fund things that are

[26:21] already there. They didn't cut spending

[26:23] and that makes all of the deficits that

[26:24] are presented best guess estimates. the

[26:27] risks are all the upside.

[26:28] >> All right, there's a lot on the table,

[26:29] but start in the general with the with

[26:31] the general huggeeness of the spending.

[26:33] Is it viable?

[26:34] >> Well, I think Doug must have looked at a

[26:36] different budget than the one I read

[26:38] today. This budget is full of courageous

[26:40] proposals, including courageous spending

[26:42] cuts. It has over $300 billion over 10

[26:47] years in cuts in Medicare and Medicaid

[26:50] by taking aim at excess subsidies for

[26:53] the health insurance industry,

[26:55] overpayments to far pharmaceutical

[26:57] firms. It goes through Medicare and

[26:59] Medicaid area by area. It is the most

[27:02] courageous budget in that area I've ever

[27:04] seen. It has $16 billion dollar in cuts

[27:07] for aggra business and wealthy farmers.

[27:10] that has billions of dollars of cuts for

[27:12] banks and other middlemen that make

[27:14] money off of student loans in an

[27:16] inefficient manner. There really is a

[27:19] lot of courageous stuff here that will

[27:21] be challenging to get through capital.

[27:23] >> Let's let's pick up on what we heard on

[27:25] the revenue side because what's getting

[27:27] most attention here is the idea of

[27:28] raising taxes on on the wealthier

[27:31] Americans. You think it's a good idea

[27:32] what they put on the table?

[27:34] >> We have these huge long-term budget

[27:36] problems. raising taxes on the

[27:38] wealthiest Americans. Most of what's in

[27:40] this budget is letting the huge Bush tax

[27:43] cuts for the wealthy expire. Currently,

[27:46] people that make over a million dollars

[27:48] a year are getting $150,000

[27:52] a year tax cut each from the Bush tax

[27:54] cuts. We can't afford that. What this

[27:57] does is it lets the Bush tax cuts

[28:00] expire. that has an additional tax

[28:02] increase on the top 5% of Americans to

[28:05] help finance universal health insurance

[28:08] alongside the financing from the

[28:11] Medicare savings that I mentioned. And

[28:13] it closes a series of egregious tax

[28:15] loopholes from Wall Street traders who

[28:18] exploit loopholes to pay taxes at a

[28:20] lower rate than many middle- inome

[28:22] Americans. from corporations that

[28:25] shelter profits overseas to evade taxes

[28:28] that from oil industry that gets

[28:31] particular tax breaks beyond what is

[28:33] necessary. All the tax so-called tax

[28:36] increases in this budget come either

[28:38] from people over 250,000 a year, the top

[28:41] 5% or from closing egregious tax

[28:45] loopholes that should not be in the code

[28:47] to begin with.

[28:48] >> All right. How do you see that? Putting

[28:50] aside the philosophical differences

[28:51] about using the income tax for

[28:53] redistribution, I think these uh tax

[28:55] increases run into two problems of

[28:57] logic. Uh the first is that when this

[28:59] stimulus bill was passed, uh a lot of

[29:01] the spending occurred past 2010 into

[29:04] 2011, 2012, 2013. And that was defended

[29:07] by saying, gee, the economy might still

[29:08] be weak. We can't possibly stop

[29:10] spending. Well, they're now going to

[29:11] turn around and whack it over the head

[29:12] with a big tax increase. Those two

[29:14] shouldn't be around at this time. They

[29:16] don't make any sense. Uh the second is

[29:18] our fundamental problem with the long

[29:19] term is spending and we won't tax our

[29:22] way out of that problem. There there's

[29:23] no economist who believes we can raise

[29:25] taxes enough to cover our long-term

[29:27] spending bill. This budget gets us off

[29:29] on the wrong foot because where it does

[29:30] cut spending, it turns right on and

[29:32] spends it again on something else. It

[29:34] doesn't on net put any controls on

[29:36] spending. And spending is the ultimate

[29:38] fiscal discipline. That's what we need.

[29:40] >> I I think that's simply not right. The

[29:42] central long-term fiscal issue facing

[29:44] this country is rising health care

[29:47] costs. If health care costs didn't rise

[29:49] faster than the overall economy, we

[29:51] wouldn't have a long-term fiscal

[29:53] problem. What this budget does is first,

[29:55] it recognizes that a necessary but not

[29:58] sufficient condition to slow the rate of

[30:00] growth of health care costs is to have

[30:02] universal healthcare coverage. So

[30:04] insurance companies aren't spending

[30:06] billions cherrypicking and shifting

[30:07] costs trying to not pay for various

[30:09] people.

[30:11] What the budget does is it says for the

[30:14] first 10 years, universal coverage,

[30:16] we're going to ensure 45 million more

[30:18] people is going to cost money, but we're

[30:20] going to marry that with a series of

[30:22] changes in Medicare and the rest of the

[30:24] health care system that slow the rate of

[30:27] health care cost growth over time. In

[30:29] the long run, putting the two together

[30:32] saves money. And in the short run,

[30:34] before the healthc care cost savings

[30:36] fully kick in and you do have extra

[30:38] costs, they're fully paid for by

[30:41] reductions in Medicare and by one of the

[30:45] tax increases on the top five.

[30:47] >> Let me ask you something. Let me pursue

[30:48] this though. Let me take Bob's argument

[30:50] at face value. And here's the danger.

[30:52] What he's saying is we're going to spend

[30:54] more on healthcare. We're going to spend

[30:55] more on healthare in the next 10 years,

[30:56] perhaps a lot more. And it'll be fine in

[30:59] quote the long run. But even under this

[31:02] budget, which doesn't spend as much on

[31:03] healthcare as would require for

[31:04] universal coverage, so if we go to that

[31:06] part, it's even worse. We're going to

[31:08] see debt to GDP ratios going up. We're

[31:11] going to layer on top of a sharp spike

[31:13] in public debt an even larger increase.

[31:15] And we're supposedly going to arrive at

[31:17] 2013 with an economy that's recovered,

[31:20] which means a global economy that's

[31:21] recovered. And our international

[31:23] creditors are going to have to start

[31:24] scratching their heads. We may never get

[31:26] to his long run healthcare reform

[31:27] because people will pull the financial

[31:29] >> the word you used the word philosophy a

[31:32] little a few minutes ago about the

[31:33] question of redistributing wealth. You

[31:35] heard Peter Orzag say this is not such a

[31:38] thing. Do you think this is?

[31:39] >> Oh, it is. I mean, there's no question

[31:41] this is a trillion dollars in tax

[31:42] increases. They're going to be on

[31:43] businesses through deferral and other

[31:46] sorts of arcane things. And on high-

[31:47] income individuals explicitly raise

[31:49] their rates, tax their dividends,

[31:50] capital gains, diminish their charitable

[31:53] and mortgage interest deductions, and

[31:54] use it to fund make work pay, earned

[31:56] income tax credits, American opportunity

[31:59] credit, low income tax credits,

[32:00] refundable credits for some people don't

[32:02] even pay income taxes. So there's no

[32:04] question what that is.

[32:05] >> Do you dispute that? You know, if if

[32:08] we're going to take Doug's premise, then

[32:09] we should start by saying that over the

[32:11] last year, eight years under President

[32:13] Bush, we underwent a massive wealth

[32:16] distribution from ordinary Americans to

[32:18] the richest Americans. All this does,

[32:21] with one exception, is to take us back

[32:24] to where we were for people in the very

[32:26] top of the income scale prior to the

[32:29] Bush presidency. You know, most

[32:31] Americans were doing very well

[32:32] economically in the late 90s. I did not

[32:34] recall that the richest Americans were

[32:37] suffering terrible problems before

[32:39] George W. Bush took office. And on

[32:41] Doug's healthc care point, this does not

[32:44] add to costs in the next 10 years. We

[32:46] will have some more costs in healthcare

[32:48] and getting the universal coverage.

[32:50] Every dollar of those is paid for in

[32:52] this budget. And then on top of that,

[32:55] over time, we slow the rate of growth of

[32:57] health care costs. We ultimately will

[32:59] need to do a lot more to address the

[33:01] fiscal crisis. But as a first step, this

[33:04] is really a more courageous set of

[33:06] proposals than I've seen any other

[33:08] president propose.

[33:09] >> We're getting into more detail in our

[33:10] next segment on healthcare. But very

[33:12] briefly, you both been around Washington

[33:14] budget politics. There's a lot to fight.

[33:16] There's a lot a fight to come on all

[33:18] this, right?

[33:19] >> Certainly. And that's actually one of my

[33:20] concerns. Uh this is a budget that says

[33:22] everything has to break the

[33:23] administration's way. And they've picked

[33:25] battles that historically have been

[33:27] lost. So this budget won't come together

[33:29] if you look at traditional political

[33:31] history and we'll end up with trillion

[33:32] dollar deficits, not half a trillion.

[33:34] And that's dangerous.

[33:35] >> Are you worried about that as a

[33:37] political as a political matter?

[33:38] >> I am worried, but let's be clear. The

[33:40] president has committed that all of

[33:43] these various initiatives, global

[33:46] addressing global warming, universal

[33:48] coverage, he insists they be fully paid

[33:50] for. I think what'll happen is if the

[33:54] vested interests, this budget takes on

[33:56] vested interests more than any in years.

[33:58] If the vested interests beat President

[34:00] Obama, we won't get universal health

[34:02] insurance. We won't address global

[34:04] warming. It's not that the deficits will

[34:06] go up. These two things are tied

[34:09] together. But this budget is remarkable

[34:11] in the way it takes on Wall Street

[34:13] traders, aggra business, energy

[34:15] companies, one vested interest after

[34:17] another. It'll be a huge battle.

[34:19] >> Okay. Bob Greenstein, Douglas Holt.

[34:21] Thanks very much. Thank you.

[34:30] >> And take three on the budget. More about

[34:32] the president's plans for health care.

[34:34] Ray Suarez has the story for our health

[34:37] unit, a partnership with the Robert Wood

[34:39] Johnson Foundation.

[34:41] The budget plan calls for a new reserve

[34:43] fund for expanding healthc care

[34:45] coverage, totaling more than $600

[34:47] billion over 10 years. To walk us

[34:49] through the proposal and how it might be

[34:51] paid for, we turn to two women who've

[34:53] covered the health care wars over the

[34:55] years. Susan Denser is a familiar face

[34:58] to our viewers. She's now editor-inchief

[35:00] of the journal Health Affairs and an

[35:02] occasional health analyst for the

[35:04] NewsHour. And Julie Robner has

[35:06] chronicled this subject for National

[35:08] Public Radio. And Julie, this reserve

[35:11] fund, uh, it's a mixture of saving and

[35:14] new spending. First, when does the

[35:15] president want to expand spending,

[35:18] expand programs? What's the new money

[35:20] for?

[35:21] >> Well, the new money is really to cover,

[35:23] start to cover the 46 million Americans

[35:25] who don't have health coverage now. And

[35:27] I think the tension has really been over

[35:29] the last couple of years. Do you start

[35:31] by cutting costs or bending the curve as

[35:34] Peter Orzg likes to say what we were

[35:36] just talking about in the last se

[35:37] segment about health care costs going up

[35:40] so much faster than inflation which is

[35:41] really the long-term budget problem or

[35:44] do you start by getting these people who

[35:45] don't have health insurance covered and

[35:47] obviously the two things are related.

[35:49] The faster health care costs go up the

[35:51] more people don't have coverage but

[35:53] people who don't have coverage do get

[35:54] health care. They go to the emergency

[35:56] room they wait until they get very sick

[35:58] before they get care. So there's a

[36:00] concern that if you don't get those

[36:01] people covered or into the pool that

[36:03] you're going to have trouble reducing

[36:05] health care costs. So there's a lot of

[36:06] concern about doing that at the same

[36:08] time. But as you bring those people in,

[36:11] it's going to cost money up front before

[36:13] you start to realize those savings that

[36:16] people have been talking about from

[36:17] changing the way that healthcare is

[36:19] delivered. Thus, you need money up

[36:21] front. That's the idea of this reserve

[36:23] funding. and Susan Denser. A lot of the

[36:25] assumptions built into this plan include

[36:28] taking already existing programs and

[36:30] finding ways to spend less money on

[36:32] them. Right.

[36:33] >> That's exactly right. But Ry, I think

[36:34] the really important point here is, as

[36:36] the president said the other night, this

[36:38] is a down payment

[36:40] uh to create a universal coverage fund,

[36:43] but it's also a down payment that is

[36:45] delayed. As Peter Orzac said, the tax

[36:48] increases on upper income taxpayers,

[36:50] which are about half of the reserve

[36:52] funding for this plan, it's about 318

[36:55] billion out of the $634 billion, comes

[36:59] from tax increases on upper income

[37:01] taxpayers. Those don't kick in until

[37:03] 2011. The money doesn't really start to

[37:06] add up to much until 2012. So, it's a

[37:10] down payment that only starts to create

[37:12] money to expand coverage in a meaningful

[37:14] sense in 2012. And it's also important

[37:18] to say when uh when Senator Obama was

[37:21] running for president, his campaign

[37:23] universal coverage plan was priced out

[37:26] by independent analysts at about $1.1

[37:30] trillion a year. And even that would

[37:33] only cover about half the uninsured.

[37:35] This is half again as much as that 630

[37:38] billion. So what what is actually being

[37:41] put forward here is a plan to spend some

[37:44] money starting a couple of years from

[37:46] now to begin to cover some of the

[37:48] uninsured. And that's really the reality

[37:51] that has been created by the current

[37:53] fiscal situation we're in.

[37:55] >> Even what the administration is calling

[37:57] a down payment rests on some assumptions

[38:00] about where they can save money. Are

[38:03] they addressing Medicare? Are they

[38:04] addressing the way people get their

[38:06] health care paid for? Now,

[38:07] >> they're addressing in particular a

[38:09] couple of pieces of Medicare. One is the

[38:11] so-called Medicare advantage plans,

[38:14] which are the private deeper service

[38:16] plans, the uh preferred provider

[38:18] organizations. It's the way many people

[38:20] get comprehensive health care paid for

[38:22] under Medicare. There's been a huge

[38:24] dispute for the last several years about

[38:26] whether those plans are overpaid for

[38:29] what they actually spend to provide

[38:30] coverage. This is a verdict in the view

[38:33] of the Obama administration that the

[38:34] answer is yes. And that by creating a

[38:37] whole new system to decide how to pay

[38:39] those plans, a competitive bidding

[38:41] system, you could you could get $175

[38:44] billion over the next 10 years. So

[38:46] that's significant. There's also a piece

[38:48] on hospitals, $ 38 billion over five

[38:51] years. Uh basically saying to hospitals,

[38:55] many of you read people who've been in

[38:57] the hospital who maybe don't need to be

[38:59] readmitted again. we're going to pay you

[39:01] a different way to incentivize you not

[39:03] to put people in the hospital again. So,

[39:05] it changes like that that would add up

[39:07] to some additional contributions toward

[39:09] this universal fund.

[39:10] >> Julie, healthcare is one of those issues

[39:12] where everybody considers themselves a

[39:14] stakeholder at some level. Have you

[39:17] already started to hear from people who

[39:19] like or don't like what's in the plan?

[39:22] >> Yes, I spent today on the phone talking

[39:23] to people. Um, and actually what

[39:26] surprised me compared to 15 years ago

[39:28] when the Clinton plan was sort of in

[39:30] its, you know, birth stages, um, I think

[39:33] already when the Clintons came out of

[39:35] the box, they started out by kind of

[39:37] pitting themselves against the drug

[39:39] industry and the insurance industry and

[39:42] to some extent some, you know, the the

[39:44] the doctors and the hospitals, although

[39:45] less so. I think that's not the case

[39:47] this time. I think everybody really in

[39:49] the health care industry is anxious to

[39:52] do something about the health care mess.

[39:54] Um employers, even small employers who

[39:56] were worried last time that they might

[39:58] be required to cover their workers.

[40:00] Everybody really knows what a mess

[40:02] things are and they really want things

[40:03] to be fixed. And even the insurance

[40:05] industry, which is, you know, Susan

[40:07] mentioned, is is concerned about these

[40:09] cuts to the Medicare Advantage program.

[40:11] um the hospital industry, which is a

[40:13] little bit concerned about some of

[40:14] these, you know, readmission uh uh cuts

[40:17] in in the that are proposed here.

[40:19] Everybody says, "Yeah, we're going to

[40:21] quibble about the details, but we still

[40:22] want to be at the table. We really need

[40:24] to talk about this. We really need to do

[40:26] something. Um it's really time to to sit

[40:29] down and negotiate this out." I'm I'm

[40:31] really kind of surprised at the reaction

[40:32] that everybody is having, which is that

[40:34] we must move forward. This is a good

[40:36] opening bid, and it's really time for

[40:38] Congress to get down to work. So,

[40:40] nobody's bailed out, but drug stocks

[40:42] dropped today, right after the

[40:44] announcement came out. Does that signal

[40:46] an assumption that the administration is

[40:48] going to find a way to spend less money

[40:49] on drugs, hence fewer profit?

[40:51] >> No question about it. Another piece of

[40:53] the proposal is actually to compel drug

[40:56] companies to give lower prices to

[40:58] Medicaid for drugs that are purchased

[41:00] through the Medicaid program. Also

[41:02] there's a proposal to create the uh the

[41:05] generic equivalent of a class of uh

[41:07] interventions known as biologics uh

[41:10] which also could have an impact on some

[41:12] of the manufacturers of those

[41:13] biologically based drugs. So yes, very

[41:16] much so. Is it anything that anybody

[41:18] wasn't expecting from this

[41:20] administration? I don't think so. So

[41:21] it's a little bit of a surprise that

[41:22] there's there's reaction on Wall Street.

[41:25] The important thing though I think to

[41:26] also say is that mo most of the major

[41:29] decisions about how to structure

[41:31] healthcare reform are not in this

[41:33] package. Uh the the budget does

[41:36] enunciate some principles. The

[41:38] administration wants to move toward

[41:39] universal coverage etc. But it doesn't

[41:42] give us a road map of how to get there

[41:44] and essentially what that means is that

[41:45] many of these decisions now are left to

[41:48] the Congress. They're left for bills to

[41:50] be marked up over the next several

[41:51] months in the Congress.

[41:52] >> Leaves it to the Congress, Julie. and

[41:54] notably doesn't venture a guess on how

[41:57] many of that 45 46 million uncovered

[42:00] would get covered through a plan like

[42:02] this.

[42:02] >> Although rather significantly it does

[42:04] say say that Congress should aim for

[42:06] universality and and I believe it were

[42:08] to you know put put the country on a

[42:09] path towards covering everyone and that

[42:11] remember candidate Obama was the one

[42:14] Democratic candidate who stood out from

[42:15] the rest and did not have a mandate to

[42:17] cover everyone. he was actually held

[42:19] back. The other major candidates did

[42:22] require everyone to have coverage. So

[42:23] this is actually a nod by the president

[42:26] towards what most of the leaders in

[42:27] Congress want, which is some sort of

[42:29] mandate, which is a requirement that

[42:31] everyone have coverage. So I think

[42:32] there's sort of a kind of an ascent here

[42:35] uh towards what the the Democratic

[42:37] leaders in Congress want, which is uh

[42:39] more of a push towards universal

[42:40] universal coverage than perhaps the

[42:42] president himself had as a candidate.

[42:44] But again, that will probably cost more.

[42:47] um that may be more controversial. Uh so

[42:49] that's something that is going to have

[42:51] to be balanced. But I think the most

[42:52] important thing that we're seeing here

[42:53] is that the president has said to

[42:55] Congress, you go ahead, you fill in the

[42:58] details here. Here are my guidelines.

[43:00] Here's what I would like to see in a

[43:02] final bill. And I think another

[43:03] difference between now and 15 years ago

[43:05] is that you really have leaders on

[43:06] Congress who have who are not only

[43:08] poised to do this, but who've been

[43:09] laying the groundwork really for the

[43:10] past year or so, who are getting ready

[43:12] to do this. Max B is at the Senate

[43:14] Finance Committee, Senator Edward

[43:15] Kennedy, despite his brain tumor, has

[43:18] been, you know, holding meetings um from

[43:19] afar and and bringing together

[43:22] stakeholders. Um Henry Waxman, the new

[43:24] chairman of the House Energy and

[43:25] Commerce Committee. So, there's really a

[43:26] lot of work that's already taken place

[43:28] on Capitol Hill in anticipation of this.

[43:30] >> Julie Robner, Susan Denser, great to see

[43:32] you both. Thanks.

[43:33] >> That's right.

[43:38] >> [music]

[43:41] >> Finally tonight, we continue our stories

[43:44] tied to Arabesque, the Festival of Arab

[43:47] Arts at Washington's Kennedy Center.

[43:49] Jeffrey Brown traveled to Egypt recently

[43:51] and talked with three of the artists

[43:53] taking part in the festival.

[43:59] >> A jewelry maker taking from the past to

[44:02] create beautiful new objects. We just I

[44:05] love my culture and I love jewelry and I

[44:07] put everything together.

[44:12] >> A dancer struggling to find acceptance

[44:14] in her own country.

[44:16] >> I've been confronted with this that why

[44:18] are you as an Egyptian doing

[44:20] contemporary dance and not belly dance

[44:22] for example? an artist winning top prize

[44:26] in a government sponsored exhibition for

[44:28] a work that sheds a dark light on life

[44:31] in her city

[44:32] >> which is based on the slums on the

[44:35] outskirts of Cairo which uh have no

[44:38] water, no electricity uh have the level

[44:41] of uh uh of uh quality of life is

[44:44] incredibly low.

[44:46] Three women of Cairo coming to

[44:48] Washington's Kennedy Center to offer

[44:51] three different portraits of their

[44:53] vibrant, sometimes overwhelming city. A

[44:56] place of great wealth and acute poverty

[44:58] where remarkable treasures of history

[45:01] can be found amid the chaos of a

[45:03] throbbing metropolis of 18 million

[45:05] people.

[45:07] and cultural wonders sit. Some in plain

[45:10] sight, others partially hidden amid the

[45:13] noise, traffic, and polluted skies.

[45:17] In a country with so many layers of

[45:19] culture and history, so many problems in

[45:22] contemporary life, and so many questions

[45:24] about the future, there's a rich trove

[45:27] of material here for artists to work

[45:29] with.

[45:32] Jewelry maker Aza Fami has traveled

[45:35] through Egypt to document the history of

[45:37] jewelry, including in bedin life and

[45:40] published her research in a series of

[45:42] books.

[45:43] >> So, it's come a long way from the old

[45:44] peasant woman to this.

[45:46] >> Yes.

[45:48] Yes. Yes. But you know, we have always

[45:51] to keep the the the essence of the work.

[45:54] We have to keep the soul of the of the

[45:56] soul of the jewelry.

[45:57] >> Of the soul of the jewelry. Oh, I didn't

[45:59] know jewelry has a sword.

[46:00] >> Yes, of course they have a, you know,

[46:02] beautiful piece of jewelry. It talks to

[46:04] you like a good painting.

[46:08] >> Famies is itself an ancient craft and

[46:10] she learned it the oldfashioned way

[46:12] nearly 40 years ago in the alleys of

[46:15] Cairo's famous Elali market where

[46:18] tourists and locals still throng amid

[46:20] the crafts, spices, and more. Fami was

[46:24] there at a time when women designers

[46:26] were rare and women as bosses even more

[46:28] so.

[46:29] >> When I started it was unusual because

[46:32] actually the people I was working with

[46:35] them in the beginning actually teach me

[46:39] but in two years everything is turn I

[46:42] became their boss but

[46:45] then I [laughter]

[46:48] >> they were okay. From that her business

[46:50] has grown into a workshop of nearly 200

[46:53] located in the suburbs of Cairo.

[46:56] There a variety of traditions are

[46:58] preserved including the three tiered

[47:00] system of trainee, trainer and master

[47:03] craftsman who practice techniques that

[47:06] says were in danger of disappearing.

[47:09] Every piece handmade of gold, silver,

[47:12] semi-precious and precious stones and

[47:15] often adorned with calligraphy passage

[47:17] from the Quran or a line from one of

[47:20] Fami's favorite writers, Khalil Gibran

[47:23] >> because I like both things, Jibran

[47:27] words and and the Julia. I I always

[47:31] connect things

[47:32] >> all aimed at commerce. Yes. and Fami has

[47:34] opened stores in Europe and wants to

[47:36] begin to sell in the US but also a sense

[47:39] of preserving a craft and culture.

[47:42] >> We take the level of craft and jewelry

[47:45] up. So this is I think I help my society

[47:48] a lot.

[47:50] [music]

[47:50] >> Karima Mansour appearing in Washington

[47:53] in early March has no ancient Egyptian

[47:56] traditions to work with. Hers is the art

[47:59] of modern dance, a western creation of

[48:01] the 20th century.

[48:04] In a society in which more and more

[48:06] women on the street wear some form of

[48:08] head covering

[48:12] >> and the influence of religion in daily

[48:14] life appears to be growing that

[48:16] complicates the already difficult life

[48:19] of a contemporary dancer choreographer

[48:22] and inevitably gives her work a

[48:24] political cast. I think there is no

[48:27] escape from that. Even if I don't

[48:30] intentionally

[48:32] do political work or or have a political

[48:35] idea in my head, it is definitely there

[48:39] is this aspect being a a female artist

[48:44] from Egypt

[48:46] uh not only female artist from Egypt but

[48:48] but busy with dance. um uh makes the

[48:53] work political whether I like it or not.

[48:56] >> Mansour studied dance in London before

[48:58] deciding to come home to make a go of

[49:00] it. It hasn't been easy in a country

[49:03] with a two-tiered system for artists.

[49:06] >> Being here in in Egypt, you either uh

[49:09] work with the government or you're an

[49:11] independent artist if we're talking

[49:13] about the art. And therefore, this means

[49:15] you don't exist. Uh why? Because being

[49:19] an independent artist here in Egypt

[49:21] means you have no official status

[49:23] because all the theaters in the country

[49:26] are official theaters are governmentr

[49:28] run state-run theaters. So you can't

[49:30] just walk in and say okay I want to

[49:32] perform.

[49:35] As a result she does more of her

[49:37] performing and receives commissions to

[49:39] create new work in foreign countries. At

[49:43] home, she ees by through teaching and

[49:45] choreographing for films and theater

[49:47] pieces.

[49:48] >> Sometimes you just want to give up. But

[49:51] on the other hand,

[49:54] and in a funny way, it's what keeps you

[49:56] going and it affects the work as in

[50:03] there has to be some kind of of rage,

[50:08] wanting to do and wanting to act and

[50:11] wanting to change and wanting to speak

[50:14] and wanting to express. Being an

[50:17] independent artist here ignites all of

[50:20] all of these feelings.

[50:26] >> In her sculpture, the Tower of Hope,

[50:28] Lara Balotti speaks out very directly

[50:31] about problems of modern Egyptian life.

[50:34] >> So, we enter the Tower of Hope.

[50:36] >> Yeah.

[50:38] The tower is a three-story brick

[50:40] structure intended to resemble the

[50:43] ramshackle unfinished buildings that

[50:45] millions of the poor inhabit in and

[50:48] around Cairo. Botti started her career

[50:51] as a photographer and for this project

[50:53] took more than 600 photos to document

[50:56] life in these impoverished areas.

[50:59] >> I mean it's a catastrophe what's

[51:00] happening. I mean I mean you know it's

[51:03] human misery if you go around these

[51:05] areas and it's giving us I mean the the

[51:08] garbage the pollution the uh the level

[51:11] of people's uh you know the way they

[51:14] live the quality of their life I feel

[51:16] that I live in an apocalyptic city you

[51:18] know we've reached a point

[51:20] >> apocalyptic city

[51:21] >> yes and you know I feel that we've

[51:23] reached the point of misery and of uh of

[51:27] a kind of anarchy of social anarchy

[51:31] Inside speakers play a mournful

[51:33] classical score that Botti commissioned

[51:36] from a composer friend complete with

[51:39] cellos and the braaying of donkeys.

[51:43] The donkey image in fact is embossed on

[51:46] many bricks. A negative symbol of

[51:48] society's dregs Batti says but in a

[51:51] twist itself suggesting the word hope.

[51:54] Do you see hope? I think there's always

[51:57] hope otherwise you know there's no point

[51:59] saying but uh so no I feel it very

[52:02] strongly and I feel that also when we

[52:04] live difficult things and when we are in

[52:06] difficult times of our life we

[52:10] we can benefit from these difficult

[52:12] times and find answers or transform

[52:15] these moments into something that

[52:16] reveals us something that would not be

[52:19] accessible in a you know on our daily

[52:22] routine life.

[52:24] Indeed, all of Botti's art is aimed at

[52:27] provoking a reooking and rethinking of

[52:29] daily life. To illustrate further, she

[52:32] took us to one of Cairo's side streets

[52:34] and a workshop of billboard painters

[52:37] whom she'd paid to paint in an utterly

[52:39] different context. Images of women she'd

[52:42] collected from her own photographs or

[52:44] from Arabic magazines. Ultimately, these

[52:47] will be put together into a giant

[52:49] collage called paradise. A provocative

[52:52] take on the Quran's depiction of women.

[52:57] >> It's controversial stuff in a

[52:59] conservative society like this, but

[53:01] Botti shies from being portrayed as a

[53:04] kind of activist.

[53:05] >> There's a lot of weight on what artists

[53:08] today are expected to do, especially

[53:09] when you're from the Middle East and

[53:11] because of the political system and the

[53:13] political situation, etc. Um, so there

[53:16] is a tendency to kind of come and ask

[53:19] for artists to to become politicians,

[53:22] you know, in a certain way. I

[53:26] I don't like that and I don't think this

[53:28] is the role that an artist should have.

[53:30] We have the the possibility to uh to

[53:33] open people's mind a little bit, you

[53:35] know, to contribute to something, to

[53:37] contribute to seeing things in a

[53:39] different way, to seeing things in a new

[53:41] way. And uh and that's what I think my

[53:44] responsibility as an artist is.

[53:46] >> They like it. Of course,

[53:48] >> she'll now be asking Americans to see

[53:51] things in a new way with her piece for

[53:53] the Arabesque festival,

[53:55] >> a giant walk-in kaleidoscope which

[53:57] surrounds viewers with shifting images,

[54:00] including scenes of people going about

[54:02] their daily lives on the streets of

[54:05] Cairo.

[54:07] Much more on the artist profile tonight

[54:10] and on the rest of our series and on the

[54:12] Arab best festival is available online.

[54:15] Look for the artbeat page on our

[54:17] website.

[54:25] [music] Again, the major developments of

[54:27] the day. President Obama laid out

[54:29] highlights of his first budget.

[54:31] >> After much complaining, the phone

[54:33] company finally dropped the bill. And by

[54:35] the way, the game verdict was watching.

[54:37] The Chicago Bears won.

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[54:41] relative in Australia. Didn't talk long

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[54:44] bucks. You weren't sitting on a dock

[54:46] though. You

[54:47] >> were like at my house.

[54:49] >> Yeah, exactly.

[54:49] >> Thank you for watching, folks.

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