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.
[54:39] >> That happened to me once calling a
[54:41] relative in Australia. Didn't talk long
[54:43] and I got a bill for like a hundred
[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.
[54:52] [music]
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