PBS NewsHour - 2009-02-23

Channel: malgent

Transcript

Language: English (original, YouTube automatic captions)

[0:00] Haggard.

[0:09] >> [music]

[0:20] >> Good evening. I'm Gwen Ifill. On the

[0:22] NewsHour this Monday, the lead story.

[0:24] The federal government moves to shore up

[0:27] troubled banks. The rest of the day's

[0:29] news, including [music] the president's

[0:30] call for a fiscal responsibility,

[0:33] a reality check discussion on how to cut

[0:36] deficits at the same time government is

[0:39] spending more. A festival of Arab arts

[0:42] provides another way to look at a

[0:43] conflicted region. [music] And a look at

[0:46] Secretary of State Clinton's efforts to

[0:48] balance candor and diplomacy on her

[0:51] Asian trip.

[0:54] >> Major funding for the NewsHour [music]

[0:55] with Jim Lehrer is provided by

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[2:02] >> [music]

[2:05] >> Federal regulators today promised to

[2:07] prop up struggling banks and possibly

[2:09] even take greater ownership stakes in

[2:11] them, but a White House spokesman said

[2:13] President Obama still supports a private

[2:15] banking system. At the same time,

[2:17] Citigroup was widely reported to be

[2:19] asking the government to raise its

[2:21] equity stake in the company. On Wall

[2:23] Street, bank stocks were up, but overall

[2:26] the market retreated to 11-year lows.

[2:28] The Dow Jones Industrial Average lost

[2:30] 250 points to close at 7114.

[2:34] The NASDAQ fell 53 points to close at

[2:36] 1387.

[2:38] For more on our lead story, I'm joined

[2:40] by Krishna Guha, US economics editor for

[2:43] the Financial Times. Thank you for

[2:45] joining us tonight. What do we know

[2:47] about what it is that these banks may be

[2:50] asking of the federal government and

[2:51] what the federal government is prepared

[2:52] to do?

[2:53] >> Well, the federal government is laying

[2:55] out a framework here that could lead to

[2:58] it taking significant shareholdings in a

[3:00] large number of banks. They don't want

[3:03] that to happen. They would prefer it

[3:05] didn't, and they hope that by offering

[3:07] more support, they'll make this less

[3:09] likely. But, here's their plan. They

[3:11] want to stress test the banks. See what

[3:13] would happen if the economy got even

[3:15] worse than it is today.

[3:18] Based on those stress tests, they'll

[3:19] find out how much capital banks might

[3:22] need to survive these rocky scenarios.

[3:24] The government is saying, "If no one

[3:26] else will make funds available to you,

[3:28] we'll put up some capital that can

[3:30] convert into equity." In theory, it

[3:34] would be up to the banks to ask for

[3:35] that, but in practice, the regulators

[3:37] could probably cram it down their

[3:39] throats.

[3:39] >> Is Citigroup the only bank that we know

[3:41] of that's considering this approach?

[3:43] >> So, Citi is out there actually asking

[3:45] the government to take a large

[3:48] shareholding in it. Executives think

[3:50] that's the only way to shore up market

[3:53] confidence in the bank. At the moment

[3:55] the government has what's called

[3:57] preferred shares in Citigroup as it has

[3:59] in a lot of the other banks. These are

[4:01] non-voting stock. They carry a fixed

[4:03] interest rate. Investors think it's not

[4:06] quite as good as having common equity.

[4:08] That's normal shares for for normal

[4:10] people.

[4:11] So, the executives at Citi are saying,

[4:14] "Come in, become a large shareholder in

[4:17] our bank, perhaps even as much as a 40%

[4:19] stake in Citigroup." It's a sign of how

[4:22] far we've moved.

[4:23] >> That's that I want to read something to

[4:24] you today. This Treasury Department put

[4:26] out a statement which

[4:27] was open to all kinds of interpretation

[4:29] about what they meant. They They said

[4:31] the government will ensure that banks

[4:33] have the capital and liquidity they need

[4:35] to provide the credit necessary to

[4:37] restore economic growth. It sounds like

[4:40] the government's trudging down that path

[4:41] to nationalization.

[4:44] >> Well, I think their view is that they'll

[4:46] do as little nationalization as they can

[4:49] and still achieve their goal, which is

[4:51] to get credit flowing again to the real

[4:54] economy. But in situations like

[4:56] Citigroup and potentially other banks,

[4:58] if the only alternative to full

[5:00] nationalization is for the government to

[5:03] take 30, 40, or even 50% of the bank,

[5:07] that's the way they'll go.

[5:09] >> Is that a distinction without a

[5:10] difference? It sounds like a slippery

[5:11] slope.

[5:12] >> Well, you see, there's two ways a

[5:14] government can take greater control of a

[5:16] bank. One way is for the regulators to

[5:19] basically seize the bank and say, "We

[5:21] think it's no longer sound. We're going

[5:22] to take it over and run it." The other

[5:25] is for the government to essentially buy

[5:27] shares in that bank. The preference that

[5:30] the Obama administration has is for

[5:32] investing in the bank's equity, which

[5:34] means it continues to be a private

[5:36] company listed on the stock market. But

[5:39] as you say, it's not a yes-no. In either

[5:41] situation we're talking about increased

[5:44] government control and influence over

[5:46] the financial system.

[5:47] >> So, if this goes according to plan, the

[5:50] assumption is there would never be

[5:51] another collapse like Lehman that we

[5:53] saw.

[5:53] >> Absolutely. I mean,

[5:55] there's another line in the statement

[5:57] this morning where they made it clear

[5:59] that they do not intend to permit the

[6:01] disorderly failure of any more big

[6:04] financial institutions. The cost of the

[6:06] Lehman failure was simply too great.

[6:08] >> Is it possible to go so far out on this

[6:10] limb toward government investment in

[6:13] banks in order to save them from

[6:14] themselves that it's impossible ever to

[6:16] go back again to where we were before

[6:18] where private companies entirely control

[6:20] private interests?

[6:21] >> Well, I think we need to think about two

[6:23] separate things here. One is ownership.

[6:25] Now, no one is suggesting that the

[6:27] government should long-term be in the

[6:29] business of running banks. All the

[6:31] people, even those who favor

[6:32] nationalization, suggest that the idea

[6:35] would be to get them back into private

[6:37] hands as quickly as possible by selling

[6:39] down the government stake. So, the

[6:41] ownership can be returned to the private

[6:43] sector in fairly short order. But, some

[6:46] things can never be undone. The

[6:48] relationship between the banking system

[6:50] and government and the taxpayer has

[6:52] changed now, I think, forever. And we'll

[6:55] see that, for instance, in greater

[6:57] regulation of the banks. After all, once

[7:00] they've managed to put the economy and

[7:02] taxpayers at such great risk, the

[7:04] government is not going to allow that to

[7:06] happen again.

[7:07] >> It's easy to look at what happened in

[7:08] the Wall Street on Wall Street today and

[7:10] say, "Well, the the market's kind of

[7:11] like the idea of what City was asking

[7:13] for, but didn't really much like the

[7:15] overall direction of the of the

[7:17] economy." Is that over reading?

[7:19] >> You know, I think that there's

[7:21] there's some reassurance in the market

[7:23] that the government looks to be trying

[7:25] to support City as a private company,

[7:27] although it hasn't categorically ruled

[7:29] out nationalization.

[7:32] And there's some interest in the

[7:34] framework the government has set out,

[7:36] but people still aren't quite sure where

[7:37] this goes. And they're troubled by other

[7:40] news that AIG, for instance, the

[7:42] insurance giant might soon announce

[7:44] giant losses and need more money from

[7:46] the government. And people worry that

[7:49] the trajectory of the whole economy

[7:51] remains very dark at the moment.

[7:53] >> talking $60 billion

[7:54] of projected losses from AIG. Krishna

[7:56] Guha from the Financial Times, thanks a

[7:58] lot.

[7:59] >> Thank you.

[8:00] >> President Obama once again spent the

[8:02] bulk of the day focusing on economic

[8:04] issues, speaking to the nation's

[8:05] governors about spending, and then

[8:07] presiding over an unusual bipartisan

[8:09] White House summit on fiscal

[8:11] responsibility. NewsHour correspondent

[8:13] Kwame Holman has more.

[8:17] >> [applause]

[8:17] >> Today's fiscal responsibility summit was

[8:19] the first step in a week-long effort by

[8:21] the president to put the focus on the

[8:23] nation's budget deficit.

[8:25] >> We cannot and will not sustain deficits

[8:28] like these without end.

[8:30] Contrary to the prevailing wisdom

[8:32] in Washington these past few years, we

[8:34] cannot simply spend as we please

[8:37] and defer the consequences to the next

[8:39] budget, the next administration, or the

[8:41] next generation.

[8:43] >> Mr. Obama told participants, which

[8:45] included lawmakers from both parties as

[8:47] well as leaders of community

[8:48] organizations, he will cut the $1.3

[8:51] trillion deficit in half by 2013.

[8:56] Savings were expected to come in part

[8:57] from a winding down of the war in Iraq

[9:00] and allowing the Bush tax cuts for the

[9:02] wealthiest Americans to expire in 2011.

[9:06] The president said his budget will

[9:08] account for costs associated with the

[9:10] wars in Iraq and Afghanistan, natural

[9:13] disasters, and the yearly fix of the

[9:15] alternative minimum tax, items routinely

[9:18] left out of past budgets by the Bush

[9:20] administration.

[9:21] >> For too long, our budget process in

[9:23] Washington has been an exercise in

[9:25] deception.

[9:27] A series of accounting tricks to hide

[9:29] the extent of our spending and the

[9:31] shortfalls in our revenue

[9:33] and hope that the American people won't

[9:34] notice.

[9:36] Budgeting certain expenditures for just

[9:38] 1 year when we know we'll incur them

[9:39] every year for 5 or 10.

[9:42] Budgeting $0 for the Iraq war.

[9:45] Zero.

[9:46] For future years even when we knew the

[9:48] war would continue.

[9:50] Budgeting no money for natural disasters

[9:53] as if we would ever go 12 months without

[9:55] a single flood, fire, hurricane, or

[9:57] earthquake.

[10:00] We do ourselves no favors by hiding the

[10:02] truth about what we spend.

[10:05] In order to address our fiscal crisis,

[10:07] we're going to have to be candid about

[10:08] its scope. And that's why the budget I

[10:10] will introduce later this week

[10:13] will look ahead 10 years and will

[10:15] include a full and honest accounting of

[10:17] the money we plan to spend

[10:19] and the deficits we will likely incur.

[10:22] >> Take some nice deep breaths for me.

[10:24] >> Mr. Obama added getting the country's

[10:26] economic house in order also would mean

[10:28] addressing health care costs, a task he

[10:31] called the single most pressing

[10:33] challenge. While his afternoon was spent

[10:35] figuring out ways to save money, Mr.

[10:37] Obama's morning dealt with how to spend

[10:40] money wisely. The president announced in

[10:42] a meeting with the nation's governors

[10:44] that Vice President Joe Biden would

[10:45] oversee the administration's

[10:47] implementation of the $787 billion

[10:50] stimulus plan. He also tapped Interior

[10:53] Department Inspector General Earl

[10:55] Devaney to lead the board charged with

[10:57] watching over how the funds are spent.

[11:00] President Obama informed the governors

[11:01] that the first installment of $15

[11:04] billion from the stimulus would be made

[11:06] available Wednesday to help states cover

[11:08] the cost of Medicaid programs.

[11:11] >> That means that by the time most of you

[11:13] get home

[11:14] money will be waiting to help 20 million

[11:17] vulnerable Americans in your states keep

[11:20] their health care coverage.

[11:22] >> [applause]

[11:24] >> Children with asthma will be able to

[11:26] breathe easier, seniors won't need to

[11:28] fear losing their doctors, and pregnant

[11:31] women with limited means won't have to

[11:32] worry about the health of their babies.

[11:35] A handful of Republican governors have

[11:37] said they will turn down some of the

[11:39] funds, such as money to expand

[11:41] unemployment benefits because it would

[11:43] require raising taxes on employers once

[11:46] the stimulus money runs out. Mr. Obama

[11:49] acknowledged such concerns were

[11:50] legitimate, but warned against fixating

[11:53] on one provision that accounts for less

[11:55] than 1% of the plan's overall cost.

[11:58] >> So, if we agree on 90% of this stuff

[12:02] and we're spending all our time on

[12:04] television arguing about 1, 2, 3% of

[12:08] the spending in this thing and somehow

[12:09] it's being characterized in broad

[12:11] brushes

[12:12] wasteful spending

[12:14] uh

[12:15] that starts sounding more like politics.

[12:18] And that's what right now we don't have

[12:19] time to do.

[12:20] >> criticism were facing

[12:21] >> Louisiana Republican Governor Bobby

[12:23] Jindal said last week he intended to

[12:25] pass on some of the unemployment funds.

[12:28] After today's meeting at the White

[12:29] House, he was asked if the president's

[12:31] comments were fair.

[12:33] >> No.

[12:34] One, let me say this. I do appreciate

[12:36] the president acknowledging that there

[12:37] were legitimate concerns, legitimate

[12:39] issues when it comes to taking temporary

[12:41] federal dollars that could create

[12:43] permanent state spending obligations.

[12:45] For example, the money that we

[12:46] identified in Louisiana on Friday that

[12:48] we will not be accepting. However, I

[12:51] continue to say as I've said before that

[12:53] certainly I think there could have been

[12:55] a very different stimulus bill written.

[12:56] There could have been a stimulus bill

[12:58] that was truly targeted and temporary,

[13:00] focused on infrastructure, focused on

[13:02] the kinds of tax credits that would have

[13:03] gotten investment moving in the private

[13:05] sector.

[13:05] >> Thank you.

[13:06] >> At the conclusion of his fiscal

[13:07] responsibility summit late this

[13:09] afternoon, the president asked for

[13:11] reactions from participants. He first

[13:13] called on his former rival for the

[13:15] presidency, John McCain.

[13:17] >> I know that you've already made plans to

[13:19] try to curb some of the excesses in

[13:22] procurement. We really have to do that.

[13:25] We're going to have to pay for

[13:27] Afghanistan as you well know and we're

[13:29] not done in Iraq, but most importantly

[13:32] we have to make some tough decisions or

[13:35] you must president I have to make some

[13:36] tough decisions about not only what we

[13:39] procure, but how we procure it and uh,

[13:42] I thank you for the opportunity of

[13:44] sharing thoughts with uh, a lot of very

[13:46] smart people.

[13:47] >> Well, John,

[13:48] this is going to be one of our highest

[13:50] priorities. I think it's very symbolic

[13:52] and very interesting that the first

[13:54] person you called on was

[13:56] John McCain.

[13:57] And that's the approach I think we need

[13:59] to take here generally

[14:01] and specifically with the health care

[14:02] reform.

[14:03] >> Participants warned tough fiscal choices

[14:05] will test the philosophies of both

[14:07] political parties. Democrat Charles

[14:09] Rangel, chairman of the tax writing

[14:11] House Ways and Means Committee, said

[14:13] some Republicans are likely to take

[14:15] issue with closing tax loopholes.

[14:17] >> You're looking for a fight and a

[14:19] partisan fight. Every loophole you close

[14:21] is a tax increase. We have to get over

[14:24] that to make certain that the vast

[14:26] majority of businesses recognizes in

[14:28] their best interest

[14:30] to do the right thing as it relates to

[14:32] those who've taken a share advantage of

[14:33] it.

[14:34] >> Well, you were you were here in '86.

[14:35] It's been done before. We might be able

[14:36] to get it done this time.

[14:38] >> For his part, Texas Republican Joe

[14:40] Barton reminded the president of the

[14:42] need to take seriously the concerns of

[14:44] the GOP.

[14:46] >> I think the House Republicans have shown

[14:48] that when we're not included in the

[14:49] decision making, we're disinclined to

[14:51] sign off on the solution.

[14:53] And it's very easy in the House as it's

[14:56] set up to get things done quickly if the

[14:58] majority's united

[14:59] to forget about the minority.

[15:02] But if you really want consensus, I

[15:05] would encourage you to encourage the

[15:06] speaker to

[15:08] to have a true open process.

[15:10] >> On the one hand,

[15:11] the majority has to be inclusive.

[15:13] On the other hand, the minority has to

[15:16] be constructive.

[15:17] And so, to the

[15:20] to the extent that

[15:22] on many of these issues

[15:24] we are able to break out of

[15:27] sort of the rigid

[15:28] day-to-day politics and think long term

[15:31] then

[15:33] what you should see I think is the

[15:35] majority saying

[15:36] what are your ideas?

[15:39] The minority's got to then come up with

[15:41] those ideas and not just want to blow

[15:42] the thing up.

[15:43] >> President Obama will continue making his

[15:45] case to lawmakers tomorrow night when he

[15:48] addresses a joint session of Congress.

[15:51] >> In other news today, a prisoner held for

[15:53] 4 years at Guantanamo Bay was released

[15:57] back to Britain. Binyam Mohamed claimed

[16:00] he endured medieval torture while in US

[16:02] custody. He's the first detainee to be

[16:05] released under the Obama administration.

[16:07] We have a report from Simon Israel of

[16:10] Independent Television News.

[16:13] >> A Gulfstream jet delivered the released

[16:16] detainee to RAF Northolt at lunchtime.

[16:19] To mark the end of nearly 4 and 1/2

[16:21] years incarceration in Guantanamo.

[16:24] On board, not just a doctor, but several

[16:27] police officers and foreign office

[16:28] officials, too.

[16:31] The tall, lanky, and stooped figure of

[16:33] Binyam Mohamed disembarked under escort

[16:36] of counterterrorism officers.

[16:38] One had a camera in his hand, presumably

[16:41] to record the physical condition of

[16:43] someone who was not so long ago on

[16:45] hunger strike and said to be at death's

[16:47] door.

[16:48] Binyam Mohamed was arrested in Pakistan

[16:51] in 2002

[16:52] as he tried to leave the country on

[16:54] suspicion of planning to detonate a

[16:56] dirty bomb in the US.

[16:58] He alleges he was detained for 4 months

[17:00] and interrogated by a British

[17:02] intelligence officer, then flown to

[17:05] Morocco on a CIA flight, a victim, his

[17:07] lawyers say, of extraordinary rendition.

[17:10] In Morocco, he claims he was tortured

[17:13] and abused while under interrogation by

[17:15] the Moroccans who were armed with

[17:17] questions from MI5.

[17:20] Binyam was transferred to Afghanistan in

[17:22] 2004 and again allegedly tortured and

[17:25] then on to Guantanamo where he's

[17:28] remained for the last 4 years until

[17:30] charges were finally dropped and he was

[17:32] released today.

[17:34] Morocco, the United States and MI5 deny

[17:37] all these allegations.

[17:39] >> There's been no suggestion of British

[17:42] direct help. Britain never condones or

[17:46] cooperates in torture and any

[17:47] allegations of torture are immediately

[17:51] followed up.

[17:51] >> Tonight his lawyers simply wanted to

[17:54] focus on the return home.

[17:56] >> Binyam just met his sister for the first

[17:59] time in 7 years. It was very tearful

[18:01] reunion. It's wonderful to see it. It's

[18:04] fantastic day.

[18:05] >> The former detainee may well be in

[18:07] demand, but tonight he's been released

[18:09] from detention and off to in his words

[18:12] begin his road to recovery.

[18:15] >> Today US Attorney General Eric Holder

[18:17] began a visit to the military prison at

[18:19] Guantanamo Bay. The Obama administration

[18:22] is currently weighing its options in

[18:24] closing the facility.

[18:26] Three US soldiers and their interpreter

[18:28] were killed in Iraq. The US military

[18:31] reported they died in combat in Diyala

[18:33] province northeast of Baghdad. For the

[18:36] month of February, 13 Americans have

[18:38] died in Iraq.

[18:40] There are new reports that North Korea

[18:42] is continuing to enhance its ballistic

[18:45] missile capability. The South Korean

[18:47] Defense Ministry reported the North has

[18:49] deployed mid-range missiles that can

[18:52] travel more than 1,800 miles within

[18:54] striking distance of Australia, the US

[18:57] territory of Guam and Russia. The new

[19:00] missile is believed to be the same type

[19:02] displayed at a military parade in North

[19:04] Korea in 2007.

[19:13] And still to come on the NewsHour

[19:15] tonight, balancing new spending against

[19:18] old deficits, an Arab arts festival, and

[19:21] Secretary Clinton in Asia.

[19:23] Ray Suarez has our budget discussion.

[19:27] >> How realistic is the president's pledge

[19:29] to halve the deficit by 2012?

[19:32] We asked that of three experts who

[19:33] attended today's summit. Douglas

[19:35] Holtz-Eakin is former director of the

[19:37] Congressional Budget Office. He also

[19:39] served as an economic adviser for John

[19:41] McCain's presidential campaign. Maya

[19:43] MacGuineas is a president of is

[19:45] president of the Committee for a

[19:46] Responsible Budget at the New America

[19:48] Foundation. And Robert Greenstein heads

[19:51] the Center on Budget and Policy

[19:53] Priorities. And since all three of you

[19:55] were involved in the breakout groups

[19:57] after the president gave both his fairly

[19:59] grim diagnosis and his fearsome set of

[20:02] assignments, let me get a quick

[20:03] impression from all of you whether your

[20:06] groups in this afternoon's meeting

[20:08] thought what you were asked to do was

[20:10] doable. Bob Greenstein?

[20:12] >> Well, today's session wasn't designed

[20:15] itself to produce some set of agreements

[20:17] in 3 hours. It was just the beginning of

[20:19] a process. There was a very good

[20:22] bipartisan feel in the room at the end.

[20:24] Uh it was a very good first step. And as

[20:27] your clip showed, the president was

[20:29] completely in command of the room at the

[20:32] end of the day and expressing a real

[20:35] determination to make progress on these

[20:37] problems.

[20:37] >> Maya MacGuineas?

[20:38] >> Well, I was in the tax session um and it

[20:40] was really an opportunity not to come

[20:42] forward and and figure out a tax plan,

[20:44] but for Secretary Geithner and Christine

[20:46] Romer, who runs the CEA, to sort of hear

[20:48] from the participants, politicians, and

[20:50] outsiders what they think can be done on

[20:51] tax reform. There was a lot of talk

[20:53] about the importance of uh permanency or

[20:56] sort of understanding where the tax code

[20:58] goes from here. We have a lot of things

[20:59] that change year to year. The

[21:01] alternative minimum tax, for instance,

[21:02] gets patched each year. Or these tax

[21:05] cuts that are set to expire at the end

[21:06] of the decade. People said that needs to

[21:08] be made permanent. Whatever the policy

[21:10] is, we need to know what it will be. The

[21:12] tax code needs to be simplified. And

[21:14] there was also focus on other things

[21:15] like

[21:16] broadening the tax base, looking at

[21:18] corporate income tax reform. A lot of

[21:20] ideas were laid out there.

[21:21] >> Douglas Holtz-Eakin?

[21:23] >> Well, I was in the healthcare reform

[21:24] session and I think it revealed all the

[21:26] tensions that are present in this entire

[21:28] process.

[21:29] People spoke optimistically about the

[21:31] chances to do major healthcare reform

[21:33] and the idea that we could get higher

[21:35] quality care in the United States at a

[21:37] lower cost and I think there's a great

[21:39] opportunity there. There's a lot of

[21:40] agreement between Republicans and

[21:42] Democrats on needed changes in the

[21:44] practice of medicine in America that

[21:45] would deliver higher quality care and

[21:47] actually get us

[21:49] price tag we could afford in this

[21:50] nation. But there's also some pitfalls.

[21:52] Those changes will take a long time and

[21:54] the cost savings will

[21:56] probably evolve very very slowly and if

[21:59] we rush into healthcare reform and cover

[22:01] a lot of people with big government

[22:02] programs, I think there're going to be

[22:03] political tensions and there're going to

[22:05] be a big impact on the budget situation

[22:06] that's already very bad.

[22:08] >> Miami, again, is the president stated

[22:10] the intention of cutting the deficit in

[22:12] half by the end of this presidential

[22:14] term.

[22:16] Are details starting to emerge on how

[22:18] you can do it?

[22:19] >> Well, we're just starting to get a

[22:20] sense. We don't have the specifics yet.

[22:22] Let me just say that cutting the deficit

[22:23] in half over the presidential term will

[22:25] still leave us with very large deficits,

[22:27] about half a trillion dollars. So, what

[22:30] I would say about that fiscal goal is

[22:31] one, it's very important to have a

[22:33] fiscal goal, to say what you're going to

[22:34] try to do and put that out there. Two,

[22:37] if we get to a $500 billion deficit at

[22:39] the end of the four years, we're not

[22:40] going to be saying, "Great, our work

[22:42] here is done." Instead, we're going to

[22:44] be saying we still have a lot of work to

[22:45] do. It's not uh close to sort of

[22:48] the whole thing being accomplished, but

[22:49] it is realistic and I think that's a

[22:51] good thing. That I think we can do this.

[22:53] Depending on where the economy goes, it

[22:55] will take some tough policy choices, but

[22:57] frankly not enough. And the president

[22:58] was up front about that today. He said

[23:00] there will be more to do and I expect

[23:01] that over the next years the budget

[23:03] deficit the budgets the administration

[23:05] puts forward will have to deal with this

[23:06] on an ongoing basis.

[23:08] >> Douglas Holtz-Eakin you heard Maya

[23:09] MacGuineas call it realistic. Is it

[23:11] realistic when at the same time you're

[23:13] propping up major financial

[23:14] institutions, loaning automobile

[23:16] companies money, and trying to push

[23:19] money out the door to get the economy

[23:21] going again?

[23:21] >> It's not only realistic. I don't think

[23:23] it's nearly aggressive enough. I would

[23:25] expect that when this budget comes out

[23:27] on Thursday, what the administration

[23:28] will show is that in 2013 the economy

[23:31] will have recovered,

[23:32] that tax revenues will have returned to

[23:35] historic norms, that they will show on

[23:37] the books

[23:38] hundreds of billions of dollars of

[23:39] additional revenues that come from

[23:41] higher tax rates on individuals and

[23:43] cap and trade proceeds from auctioning

[23:45] the permits, and despite that we'll have

[23:47] a budget deficit of over half a trillion

[23:49] dollars, and that suggests they're

[23:51] planning to spend an awful lot of money,

[23:53] and those are steps in the wrong

[23:54] direction given our budget picture.

[23:56] >> Robert Greenstein, what are the

[23:57] assumptions or some of the assumptions

[23:59] that the president is using in making

[24:02] these calculations? Just over a trillion

[24:05] dollars in deficit now, if there's a

[24:07] target of 500 billion when it's all

[24:10] over,

[24:11] where's the money coming from?

[24:12] >> We need to be very clear that by 4 years

[24:15] from now we're going to have an economy

[24:17] that is approaching a 20 trillion-dollar

[24:20] economy. We have to keep this in

[24:21] perspective. The deficit that he's

[24:23] talking about, President Obama, in 2013

[24:27] equals only 3% of the size of the

[24:30] economy. Most budget experts think that

[24:33] if you're over 3% you're on a path

[24:35] towards exploding debt, and we have to

[24:37] get back down on a permanent basis to

[24:40] the 2 to 3% range.

[24:42] And what's particularly important is his

[24:45] budget A uses realistic numbers for the

[24:49] first time since I can remember. For

[24:52] years

[24:53] presidents have proposed budgets that

[24:55] leave out of them costs for doctors and

[24:59] Medicare, for uh

[25:02] patching, for giving people relief,

[25:03] middle-income people relief from the

[25:05] alternative minimum tax, for natural

[25:07] disasters that occur every year.

[25:10] Presidents have left those out, and

[25:11] their numbers down the road haven't

[25:13] meant anything. He's putting every one

[25:15] of those numbers in.

[25:16] He has a series of tough, I would say

[25:18] even courageous, proposals that take on

[25:21] special interests in areas ranging from

[25:25] uh tax loopholes used by Wall Street

[25:27] traders to excess payments to private

[25:30] insurance companies in Medicare who are

[25:32] overpaid.

[25:34] His job is going to be to try to get

[25:36] Congress,

[25:37] members of both parties,

[25:39] to go along with or come up with their

[25:41] own courageous choices as he has done.

[25:44] And the second big question is the

[25:46] international economy.

[25:48] If we're still in a global recession 4

[25:50] years from now,

[25:52] we won't be near a 500 billion trillion

[25:55] excuse me. 500 billion-dollar

[25:57] deficit, it'll be much bigger. But if

[25:59] the economy recovers,

[26:01] he's using honest numbers. If he can get

[26:03] his proposals enacted,

[26:05] then I think we're going to see a

[26:07] deficit that's in the 1 to 2 trillion

[26:08] range now come well down, and we will be

[26:11] starting to get to that safer area of

[26:14] having deficits that do not exceed 3% of

[26:18] the size of the US economy.

[26:20] >> But along with building in, as Bob

[26:22] Greenstein mentioned, the amount for the

[26:24] war and and things like that, are there

[26:26] also assumptions that the president is

[26:28] using that perhaps make the assignment

[26:32] less difficult?

[26:33] >> Well, in fact, what they're doing is

[26:35] they're building They're being They get

[26:37] credit for being very honest about the

[26:38] policies that they're going to put in

[26:39] the baseline. They're going to talk

[26:40] about assuming the AMT is fixed every

[26:42] year. They're going to make the tax cuts

[26:44] that are expiring permanent. They're

[26:46] going to budget for the full cost of the

[26:47] war and even for emergencies that are

[26:49] likely to happen. This is all great on

[26:51] the point of transparency. However, what

[26:53] I don't think they're going to do, and

[26:55] we don't have all the details yet, is

[26:56] actually say how they're going to pay

[26:57] for these things. So, if the favorite

[26:59] policy is to make these tax cuts

[27:01] permanent, that's great. We do want to

[27:03] put that in the budget, but you also

[27:04] have some kind of an obligation to say,

[27:05] "How are you going to offset the cost of

[27:07] those things?" Um and that that would be

[27:09] a bigger lift, and that would be

[27:11] something I'm not anticipating that

[27:12] they'll put in the budget, which means

[27:14] the deficits will be that much larger. I

[27:16] think a $500 billion deficit is

[27:18] troublesome. I do think we want to

[27:19] remain flexible, and so if the economy

[27:21] is doing well, we should shoot for

[27:22] higher. If it's not doing well, we want

[27:24] to focus on fixing the economy first. Um

[27:27] but sooner or later, we're going to have

[27:28] to get to the bottom line of how do you

[27:30] pay for these things? If you want to

[27:31] make the tax cuts permanent, how do you

[27:33] pay for it? If you want to expand health

[27:34] care, we need to offset all those costs,

[27:36] and it's not clear this budget is really

[27:38] going to deal with all those tough

[27:39] choices yet.

[27:40] >> Douglas Holtz-Eakin, you just heard two

[27:41] perspectives on the numbers as they're

[27:43] understood by your colleagues. You're a

[27:45] former CBO head. Do they add up?

[27:48] >> Well, I think uh there are two real

[27:49] important points here. Uh number one,

[27:51] uh I I think the Bush administration's

[27:53] legacy of budgeting in ways that weren't

[27:56] exactly

[27:57] uh the what we've seen in in terms of

[27:59] what they actually wanted to do didn't

[28:01] fool anybody. So, the notion that the

[28:02] transparency itself will solve all the

[28:05] problems I think is is misplaced. What

[28:07] really matters is the policies, and I

[28:08] think Maya is right in that we won't

[28:11] know the full list of policies that will

[28:12] actually make this budget add up when it

[28:15] comes out on Thursday. And and to Bob uh

[28:17] Greenstein's point, if we get to 3% of

[28:20] GDP in 2013, we will still be increasing

[28:23] the national debt relative to the size

[28:25] of the economy when it has skyrocketed

[28:27] in recent years. And we're entering into

[28:30] the period when the baby boomers going

[28:31] to retire. We're entering a period when

[28:33] there's tremendous pressures on the

[28:34] national debt anyway. It should be an

[28:36] aggressive budget that actually brings

[28:38] that down and doesn't accept an

[28:39] ever-rising national debt.

[28:41] >> Why is it important to bring the the

[28:44] budget deficit down by the end of this

[28:46] presidential term, Maya again?

[28:48] >> Well, it's important that you have a

[28:49] plan to bring it down because you cannot

[28:51] borrow indefinitely. When you do, it

[28:53] places major macroeconomic pressures in

[28:55] your whole economy. So, if you're

[28:57] borrowing, that means someone has to

[28:58] lend you the money. Right now, we borrow

[29:00] a lot from overseas. If we borrow too

[29:02] much with no plan for how to bring the

[29:04] debt down, people are going to charge us

[29:06] more for that lending and our interest

[29:08] rates are going to go up. What does that

[29:09] do? That could destabilize the economic

[29:11] recovery just when we're starting to get

[29:13] strong again. So, you want to have a

[29:14] plan where you run deficits and you

[29:16] build up your debt when the economy is

[29:18] weak and you need that borrowing. But,

[29:20] equally as important or more important

[29:21] is having a legitimate plan to pay back

[29:24] that once the economy has strengthened

[29:26] again. That's why you basically want to

[29:28] balance your budget over business

[29:29] cycles. So, when the economy is strong

[29:30] again, we actually should be shooting

[29:32] for budget surpluses. That's going to be

[29:34] a big challenge with the aging and

[29:35] health care challenges we have. We're

[29:37] going to have to deal with those.

[29:38] >> And very briefly, Bob Greenstein, is it

[29:40] important symbolically, important as a

[29:42] message to markets, to regular American

[29:45] taxpayers?

[29:46] >> It's important. It's not I don't think

[29:48] it's critical to balance the budget. I

[29:50] disagree with Maya here. As Doug

[29:51] indicated, the key is that we can't have

[29:54] a debt explosion. It's like somebody

[29:56] whose credit card gets bigger and bigger

[29:57] and the interest payments they pay eat

[29:59] up more and more of their income. We

[30:01] can't let the debt grow faster than the

[30:03] economy. Now,

[30:06] what Obama's proposing is to get us by

[30:08] 2013 to the point where the debt isn't

[30:10] growing faster than the economy. At that

[30:12] time, Doug is right that we'll then need

[30:14] to do a lot more and Obama said today,

[30:17] this budget's only the first step. He

[30:19] then in coming years wants to go a lot

[30:21] farther so we avoid a debt explosion and

[30:24] we protect long-term economic growth.

[30:27] >> And Doug Holtz-Eakin, uh

[30:29] important and important to be done

[30:31] quickly, very quickly.

[30:32] >> Uh it's important to do everything you

[30:34] can in the near term to put us in a

[30:35] position to deal with our long-term

[30:37] problems as as Bob said. Most

[30:39] importantly today, there was an

[30:40] agreement that the fundamental part of

[30:42] the long-term outlook is rising

[30:44] healthcare costs. We need to take that

[30:46] on because it will take a long time to

[30:48] get that right and we can't keep our eye

[30:51] on just healthcare. We have to take care

[30:53] of everything else in in between while

[30:55] we fix the healthcare system.

[30:57] Guests, thanks a lot. To be continued.

[30:59] >> Thank you.

[31:05] >> [music]

[31:09] >> Now, an unusual window on life and

[31:11] culture in the Arab world as we begin a

[31:14] series of reports tied to a festival of

[31:17] Arab arts at Washington's Kennedy

[31:19] Center. Jeffrey Brown reports.

[31:26] >> Most often the Middle East conjures up

[31:28] images and sounds of war and terrorism,

[31:31] religious fundamentalism and constant

[31:33] struggle.

[31:38] >> [music]

[31:39] >> But here is another sight, another

[31:41] sound.

[31:44] >> [music]

[31:47] >> These are the children of the Al-Farah

[31:49] Choir or the Choir of Joy.

[31:51] More than 100 Muslim and Christian young

[31:53] people who sing in a 30-year-old group

[31:56] founded by a Catholic priest in

[31:58] Damascus, Syria.

[32:00] Yesterday some of the children sang at

[32:02] mass at the Basilica of the National

[32:04] Shrine of the Immaculate Conception in

[32:06] Washington, D.C.

[32:09] A tune up of sorts for their performance

[32:11] tomorrow as part of an ambitious

[32:13] three-week festival called Arabesque,

[32:16] Arts of the Arab world. It opens tonight

[32:19] at Washington's John F. Kennedy Center

[32:21] for the Performing Arts. For Kennedy

[32:23] Center President Michael Kaiser, the

[32:25] festival is about art, certainly, but

[32:27] about something more as well.

[32:29] >> Well, I believe that peace comes from

[32:31] understanding and so if we know more

[32:33] about other people and have a rounder

[32:34] view of them and a more educated view of

[32:36] other people then we can start to make

[32:38] peace. I believe that this festival is

[32:40] going to help people to understand Arab

[32:43] people, to understand their aesthetic

[32:45] taste, to understand their hospitality

[32:47] and their generosity, and their passion,

[32:50] and we'll start to understand them not

[32:51] just as political beings, but as human

[32:53] beings.

[32:54] >> How though? I mean, how does a watching

[32:56] a dance or theater or musician, how does

[32:59] it do all that?

[33:00] >> Well, to start with, um

[33:03] to start with, it comes from just

[33:05] showing another view of Arab people. All

[33:07] we see on television are people running

[33:09] around

[33:10] escaping bombs or thrusting bombs, and

[33:13] we don't see on television very much

[33:16] that has to do with the other side of

[33:18] the culture of the Arab people. So, just

[33:20] having a dance [music] company here

[33:22] starts to make people question, I didn't

[33:23] know they had a dance company. I didn't

[33:25] know that they didn't know they cared

[33:26] about dance. That's how it starts.

[33:31] >> Indeed, they do dance. The Caracalla

[33:34] Dance Theatre from Lebanon is part of

[33:36] this [music] immense undertaking, which

[33:38] involves some 800 performers from 22

[33:41] countries of the [music] Arab world,

[33:43] stretching from North Africa to the

[33:45] Levant to the Persian Gulf.

[33:48] A region the organizers want to make

[33:50] clear of great diversity.

[33:54] >> You have to understand there isn't

[33:55] [music] one monolithic Arab person.

[33:58] There are many different kinds of Arab

[33:59] people within those 22 countries, and I

[34:01] think that's part of what we're trying

[34:02] to teach. The culture of Morocco is

[34:05] very, very different from the culture of

[34:06] Syria, which is very, very different

[34:08] from the culture of Oman.

[34:11] >> In recent days, the Kennedy Center has

[34:13] been transforming itself for this $10

[34:15] million festival, the most complex the

[34:18] center has ever presented.

[34:21] Two tons of cargo have arrived from Arab

[34:24] countries, massive arches and a

[34:26] mashrabiya, or window of carved wood

[34:29] lattice work, constructed in Egypt, are

[34:31] part of exhibition called Breaking the

[34:33] Veils, featuring works by Arab women

[34:36] artists.

[34:38] And a gift shop has been made over into

[34:40] a souk or marketplace.

[34:42] There will be exhibitions of fashion,

[34:44] including wedding dresses from around

[34:46] the region,

[34:47] of art and photography,

[34:51] and an exploratorium, including a film

[34:53] projecting ancient texts that will

[34:56] highlight Arab contributions to society

[34:58] between the 8th and 15th centuries,

[35:00] advances in math, medicine, astronomy,

[35:03] and chemistry.

[35:08] At the heart of the festival, five

[35:10] theaters will feature performances in

[35:12] music, dance, and theater, from the

[35:14] traditional to a rapper from Somalia

[35:17] named K'naan.

[35:18] >> [music]

[35:21] >> The Kennedy Center is known for its

[35:23] festivals of international arts.

[35:26] But the politically charged Middle East,

[35:27] from the post-9/11 talk of a clash of

[35:30] civilizations to the fallout from the

[35:32] Iraq war and the continuing

[35:34] Israeli-Palestinian conflict, combined

[35:37] to make this a special challenge.

[35:39] Alicia Adams, the Kennedy Center's head

[35:41] of international programming, was in

[35:44] charge of finding performers throughout

[35:46] the Arab world.

[35:47] >> When I started going to the to the to

[35:49] the region, it was at a time when

[35:51] certainly the popula- popularity of this

[35:53] country was very very low. And I wasn't

[35:55] sure whether the artists were going to

[35:58] say they were not interested because it

[36:00] was America, it was the Kennedy Center,

[36:02] which is a uh you know, quasi-federal

[36:05] institution,

[36:06] um that you know, somehow this was a a a

[36:09] tool of the administration. And that was

[36:12] a worry. Would I Would they Would they

[36:13] come? And I was just so pleased to to

[36:17] learn on these trips, as I met artist

[36:19] after artist after artist, that they

[36:21] were very [music] interested in coming

[36:22] here. They very much wanted to tell

[36:25] their stories, to be able to be seen in

[36:27] a different light, to be able to show

[36:29] [music] the beauty and humanity that

[36:30] exists with them as a as a people

[36:34] >> [music]

[36:34] >> um and as a culture. I think they want

[36:36] people to know that they're not

[36:37] terrorists.

[36:39] >> Among those coming to the festival is

[36:41] Azza Fahmy, an Egyptian jewelry maker

[36:44] who documents the history of her craft

[36:46] and adorns her pieces with Arabic

[36:48] calligraphy and poetry.

[36:50] >> I love my culture.

[36:52] And I love jewelry and I put everything

[36:55] together.

[36:56] So, when I read a book about

[36:59] Gibran Khalil Gibran, I like to see it

[37:02] on a ring or I like to see it on a

[37:04] bracelet or I like to see it on a on a

[37:06] pendant.

[37:09] >> In Kuwait, writer and theater director

[37:11] Sulayman Al-Bassam explores issues of

[37:14] contemporary Gulf and Arab society with

[37:17] a twist by adapting the works of William

[37:19] Shakespeare.

[37:21] >> The society that he's describing is a

[37:22] society of power struggles of um

[37:26] individuals looking for and seeking new

[37:29] ways to to be and to express themselves.

[37:33] So, the work he makes kind of translates

[37:36] across different ages, different

[37:38] different societies, different different

[37:40] places.

[37:45] >> Lebanese musician Marcel Khalife is a

[37:48] singer, master of the oud or lute, and

[37:51] composer for small and large ensembles

[37:53] who speaks of love in a part of the

[37:55] world that has been torn apart by

[37:57] strife.

[38:06] >> As human beings, every day we need to

[38:08] learn how to love. We need to learn and

[38:11] to read poetry and listen to music every

[38:13] day. Perhaps if we do these things,

[38:15] people will discover beauty and

[38:17] happiness.

[38:19] >> In Washington yesterday, Al-Farah Choir

[38:22] members from Damascus said the festival

[38:24] creates a real opportunity to reach

[38:27] across barriers.

[38:28] >> We should touch heart touch the other

[38:30] heart and we should communicate people

[38:33] to people and this is the main

[38:35] idea.

[38:36] >> I always dreamed of coming to America

[38:38] and now I I didn't just come to America,

[38:40] I came to sing and spread peace and

[38:43] music really does something, changes

[38:46] something in your mind.

[38:49] >> Creating a space for that kind of change

[38:51] is a hope of Kennedy Center organizers

[38:54] who brought together young people from

[38:55] both Oman and the US in a specially

[38:58] commissioned piece by choreographer

[39:00] Debbie Allen.

[39:01] >> It's probably the best thing that we

[39:02] will do in this festival in terms of

[39:04] creating a dialogue, creating cultural

[39:06] exchange between the young people. And

[39:09] for me, more than the end product, it's

[39:11] the process.

[39:13] >> [music]

[39:16] >> Three, four, five, six, seven,

[39:19] eight.

[39:19] >> The Kennedy Center's festival Arabesque,

[39:21] Arts of the Arab World, runs through

[39:23] March 15th.

[39:25] >> Three, four, five, six, seven, eight.

[39:29] >> Tomorrow night, Shakespeare in the

[39:30] Persian Gulf as Jeff continues his

[39:33] series of reports. Much more on the

[39:35] series and the Kennedy Center's

[39:36] Arabesque festival is available online.

[39:39] Look for the Artbeat page on our

[39:41] website.

[39:49] Finally tonight, [music] Secretary of

[39:51] State Hillary Clinton has just returned

[39:53] from her first trip abroad to Asia and

[39:56] is already planning her second trip.

[39:58] Margaret Warner is here with a look at

[39:59] the Secretary's focus so far.

[40:04] >> In a break with tradition, Secretary of

[40:06] State Clinton made her maiden trip in

[40:08] her new role not to Europe or the Middle

[40:10] East, but to the world's most populous

[40:13] region, Asia.

[40:14] >> I have come to Asia as my first trip uh

[40:19] as Secretary of State to convey that

[40:22] America's relationships across the

[40:25] Pacific are indispensable.

[40:27] >> How are you?

[40:28] >> Secretary Clinton's trip began with a

[40:30] visit to long-time ally and economic

[40:33] partner Japan. From there, she went to

[40:35] Indonesia, South Korea, and China. The

[40:39] economy and strategic issues dominated

[40:41] her agenda on every stop. She made that

[40:44] intention clear to reporters before

[40:46] leaving Seoul for China.

[40:48] "While we have to continue to press the

[40:50] Chinese on human rights," she said,

[40:53] "pressing on those issues can't

[40:55] interfere with the global economic

[40:56] crisis, the global climate change

[40:58] crisis, and the security crisis."

[41:00] >> How are you?

[41:01] >> Hello, Secretary.

[41:02] >> In Beijing Saturday, after meeting with

[41:04] China's president, foreign minister, and

[41:06] premier, she spoke of the Obama

[41:08] administration's desire to work with

[41:10] China on the biggest global issues of

[41:13] the day.

[41:14] >> There are a number of areas we can work

[41:17] on together.

[41:18] We're constructing and have agreed in

[41:20] principle to a strategic and economic

[41:22] dialogue.

[41:23] >> She tried to reassure her hosts that

[41:26] China's investment in US government debt

[41:28] remains sound.

[41:29] >> I appreciate greatly the Chinese

[41:33] government's continuing confidence in uh

[41:37] uh United States Treasuries.

[41:39] I think that's a

[41:41] well grounded confidence.

[41:43] >> She also highlighted climate change,

[41:45] touring a thermal power plant that

[41:47] produces about half the emissions of a

[41:49] typical coal plant. China recently

[41:52] surpassed the United States as the

[41:54] world's biggest emitter of greenhouse

[41:56] gases.

[41:58] Clinton's candid, straight-talking style

[42:00] was also in evidence in South Korea,

[42:02] where she had some strong words for

[42:04] North Korea.

[42:05] >> North Korea is not going to get a

[42:08] different relationship with the United

[42:11] States while insulting and refusing

[42:14] dialogue with the Republic of Korea.

[42:17] >> And she raised some diplomatic eyebrows

[42:19] by talking to reporters about the

[42:20] deteriorating health of North Korea's

[42:23] leader and her concerns that a

[42:25] succession struggle there could hamper

[42:27] efforts to deal with the North's nuclear

[42:30] program.

[42:31] In Jakarta, capital of the world's

[42:33] largest Muslim nation, Indonesia, she

[42:35] was greeted at the airport by students

[42:37] from the elementary school President

[42:39] Obama once attended. Everywhere she

[42:42] reached out beyond government officials

[42:44] to the public. She was interviewed by a

[42:46] blogger in China and on this TV show in

[42:49] Jakarta.

[42:50] >> What is your favorite music and artist?

[42:52] >> Oh, you know,

[42:54] I am older than you are. So, I am

[42:57] You know, for me it's really the the old

[43:00] standbys like the Beatles and the

[43:02] Rolling Stones.

[43:07] >> [applause]

[43:08] >> Secretary Clinton returned to Washington

[43:10] last night. Today, the State Department

[43:13] announced she will leave next week for

[43:15] the Middle East.

[43:17] And now for an assessment of Secretary

[43:18] Clinton's first official trip. Wendy

[43:21] Sherman was State Department Counselor

[43:23] to Secretary Madeleine Albright and

[43:25] Special Advisor on North Korea. She's

[43:27] now a Principal with the Albright Group.

[43:30] And Christian Brose was Chief Speech

[43:32] Writer and a Policy Advisor to Secretary

[43:34] of State Condoleezza Rice. He is now a

[43:36] Senior Editor at Foreign Policy

[43:38] Magazine. Welcome both of you. Wendy

[43:40] Sherman, beginning with you. What did

[43:42] Secretary Clinton achieve on this trip,

[43:44] do you think?

[43:44] >> I think Secretary Clinton began to reset

[43:47] the table for national security and

[43:49] foreign policy of the United States of

[43:51] America. She went out to Asia to say

[43:54] that we really are in a global century

[43:57] where we have to focus on the whole

[43:58] world and as we've seen with the global

[44:00] economic crisis, it does engage the

[44:03] entire world. And so, I think she went

[44:05] to listen,

[44:07] to present the face of President Obama

[44:09] and the Obama administration, and to

[44:11] begin begin to build the long-term

[44:13] relationships we need to deal with

[44:15] economics, deal with transnational

[44:17] issues like proliferation and climate,

[44:20] and to deal with the values that we hold

[44:22] dear, human rights, democracy, and all

[44:25] the issues that give people prosperity

[44:27] and hope in the world.

[44:28] >> I want to come back to the human rights

[44:29] question, but first of all, Chris Boes,

[44:32] resetting the table, is that what it

[44:34] looked like to you?

[44:35] >> Well, that was my sense. You know, I

[44:36] think this was a rebranding tour.

[44:38] This was an opportunity for Secretary

[44:40] Clinton to make her maiden voyage and

[44:42] say that things are now entirely

[44:44] different. I think that it was a smart

[44:47] move to go to Asia first,

[44:49] but I do think that you know, there's a

[44:50] lot more continuity here than we

[44:52] realize. I think the decision to go to

[44:54] Asia was one that Secretary Rice's

[44:57] policy planning staff recommended,

[44:59] and I think that largely what you see on

[45:01] this stop are, you know, an attempt to

[45:04] sort of uh reach out to these rising

[45:06] powers in Asia to say that we want to

[45:07] work together to solve global problems,

[45:10] and that's broadly consistent with the

[45:11] approach the Bush administration passed

[45:13] off through the work that they did in

[45:14] their second term.

[45:15] >> Is there anything really different that

[45:17] she signaled, Wendy Sherman,

[45:19] policy-wise?

[45:20] >> Well, I think she signaled

[45:22] >> it sort of a continuation, policy-wise?

[45:25] >> I think there's some continuity, but I

[45:26] think what she said is we are here to

[45:28] listen, not to lecture.

[45:30] We are here to work with you,

[45:32] but on issues of concern to us and our

[45:34] national interest. We are here to

[45:37] highlight

[45:38] Indonesia's enormous efforts towards

[45:40] democracy, which they did from the

[45:42] inside out as opposed to from the

[45:44] outside in,

[45:46] and we are here to look at those issues

[45:48] that are really going to take all of us

[45:50] in this boat together to solve.

[45:53] >> But are you saying there was a focus

[45:54] that was missing from the previous

[45:55] administration?

[45:56] >> I think the previous administration

[45:59] led us into a war in Iraq.

[46:01] That said to the rest of the world that

[46:04] we had a focus, we weren't interested in

[46:06] other people's interests, we weren't

[46:08] interested in listening to them and

[46:10] working together in solving big problems

[46:12] that cut across sovereignty and cut

[46:14] across boundaries. And I think what

[46:16] Secretary Clinton, what President Obama

[46:17] has been saying repeatedly throughout

[46:20] the campaign and more importantly now

[46:22] that President Obama is President of the

[46:23] United States is we are here to work

[46:25] together to solve these global issues.

[46:27] >> Did you see any new policy direction

[46:29] Chris Bros in it other than being in

[46:32] more of a listening mode?

[46:34] >> I think the focus on climate change was

[46:35] a departure.

[46:37] I think that the attempt to put that

[46:40] front and center with our relationship

[46:41] with China was not something that you

[46:43] would have seen

[46:45] the Bush administration do. That being

[46:47] said, I do think that the attempt the

[46:50] contours of that relationship

[46:53] are broadly the same. I think that the

[46:55] getting past looking at China as either

[46:57] a strategic partner to engage or a

[46:59] strategic threat contain and looking at

[47:00] its rise as a geopolitical fact and

[47:03] putting the question of how is China

[47:04] going to use its rising power in the new

[47:06] century.

[47:07] What global problems is it going to work

[47:09] with us to solve? I think this is the

[47:11] responsible stakeholder policy that the

[47:14] Bush administration passed to the Obama

[47:16] administration and I think the focus on

[47:18] climate change though a departure to

[47:20] some degree is broadly consistent with

[47:23] the the strategy that the Bush

[47:25] administration was pursuing.

[47:26] >> And by responsible stakeholder you mean

[47:28] trying to make China be a more unquote

[47:30] responsible stakeholder in the global

[47:31] order.

[47:32] >> to shoulder the burdens as well as the

[47:34] benefits of globalization.

[47:36] >> What explains Wendy Sherman what she

[47:38] said about human rights? Now this is a

[47:39] woman who 14 years ago as first lady

[47:41] went to Beijing, gave a very high

[47:44] profile speech, very vehement speech,

[47:46] passionate defense of human rights and

[47:48] women's rights. So much so that I I'm

[47:51] told the Chinese had pulled the plug on

[47:53] her address on Chinese television. Why

[47:56] this new tone?

[47:59] >> I think that everyone knew she had given

[48:01] that speech. When she gave the Asia

[48:03] Society speech before she left for the

[48:05] trip, she laid out the importance of

[48:06] human rights, democracy, civil society.

[48:09] So, she was very clear that this is part

[48:12] of an American framework. These are our

[48:13] values. But, she also understood that

[48:16] we're trying to build relationships,

[48:17] that the greatest human rights

[48:19] right that a person has is the right to

[48:22] a livelihood. And that first and

[48:24] foremost, we had to focus on the global

[48:26] economic crisis to make sure that people

[48:28] can raise their families and look

[48:30] forward to educating their children and

[48:31] having health care. That's true here,

[48:33] that's true in China, in South Korea, in

[48:36] Japan, and in Indonesia.

[48:37] >> But, was she signaling, do you think,

[48:39] that that the concern about human

[48:41] rights, what's happening with dissidents

[48:43] in China, what's happening in Tibet, in

[48:46] the US view is going to take a backseat

[48:48] to these other issues?

[48:50] >> I think it might take a more private

[48:52] seat in the sense that it isn't about

[48:54] whether you're going to be candid about

[48:56] these issues. I'm sure in her meeting

[48:58] with the foreign minister, she discussed

[49:00] these issues. She said as much. But, is

[49:03] she going to do it in front of the

[49:04] curtain? Is she going to do it quietly?

[49:06] Face in Asia is a very important thing.

[49:09] People want to make sure that their

[49:11] pride and dignity are maintained. And I

[49:13] think she's respectful of other people's

[49:15] societies, but very clear about the

[49:18] value of human rights and democracy.

[49:20] >> Human rights groups were very critical

[49:22] of this, Chris Brose. Do you think it

[49:24] was the right tact to take?

[49:26] >> No, I think it was a mistake. You know,

[49:27] I think it was a gap. I think that

[49:30] it's one thing to not say anything and

[49:32] to go and have those meetings and raise

[49:34] those issues in private. But, to

[49:36] essentially cut the legs out from your

[49:38] your policy by saying that it's not

[49:39] going to be working.

[49:41] I think it's a mistake.

[49:42] >> she said. She said

[49:43] they know what we're going to say, we

[49:45] know what they're going to say, and so

[49:46] it's not

[49:47] >> to her defense, she she met with

[49:49] religious groups, labor groups, women's

[49:51] groups. So, deeds matter, but words

[49:53] matter, too. And

[49:55] >> No, I'm just going to follow up with

[49:56] that. Would you say though that that was

[49:58] also kind of the Bush administration

[50:00] policy, that they did not let human

[50:02] rights concerns get in the way of

[50:04] certainly the economic agenda they were

[50:06] pursuing?

[50:06] >> Absolutely. I think that it

[50:08] >> With China.

[50:09] >> There was the recognition in the the

[50:10] Bush administration that this didn't

[50:11] need to be a false choice, you know,

[50:13] that you could you could both

[50:15] uh hold China to the high standards that

[50:17] we all try to hold ourselves to in

[50:18] regard to human rights, but at the same

[50:20] time work on issues of common interests

[50:22] and common concern. And I think that the

[50:25] uh shift of emphasis

[50:27] uh is is something that didn't need to

[50:29] happen publicly. Um it's something that

[50:31] you know, you can you can engage that

[50:32] conversation privately,

[50:34] uh but you're just creating problems for

[50:35] yourself because the next time you come

[50:37] out everyone will ask you, uh so what

[50:39] are you going to do about human rights

[50:40] this time? And it's just a needless

[50:41] distraction.

[50:43] >> I think however though that actions do

[50:45] matter here. During the last 8 years

[50:47] before the Obama administration, uh we

[50:49] had a lot of secrecy, uh we had uh some

[50:52] human rights problems of our own with

[50:54] Abu Ghraib, with Guantanamo, uh with the

[50:57] policy on torture. And so the Obama

[50:59] administration has to signal that this

[51:01] is a new day, that these are important

[51:03] issues, but our deeds matter. So, the

[51:05] meeting with 23 advocates, uh the going

[51:09] to Indonesia, which is a really

[51:10] burgeoning democracy, all of these

[51:12] matter a great deal.

[51:14] >> Let me ask you both how you think this

[51:15] candor candor about what she was going

[51:17] to do about human rights candor about uh

[51:20] the North Korean leader Kim Jong-il's

[51:22] failing health. We Americans love that

[51:24] kind of straight talk, but is there a

[51:26] risk for a chief diplomat in this?

[51:29] >> I think there can be a risk at times. I

[51:31] think the Bush administration got itself

[51:33] into a lot of problems with its candor

[51:34] at times,

[51:35] uh but I think with regard to some of

[51:38] her more candid moments on the trip, I

[51:39] think you know, you have to separate

[51:40] them out. You know, I think what she

[51:41] said about North Korea,

[51:43] uh what she said about Burma, I think

[51:44] that was that was candor, it was stating

[51:46] the obvious, and it wasn't very

[51:47] problematic. Uh with regard to Burma, it

[51:50] was also the recognition that they were

[51:51] reviewing a policy, so admitting that it

[51:53] was failing was okay.

[51:55] Uh but when you say that, you know, your

[51:57] human rights dialogue, your efforts to

[51:59] uh discuss human rights with China

[52:00] aren't going to get anywhere, I think

[52:02] that's a that's a different uh situation

[52:04] that's more problematic.

[52:05] >> Finally, let me both ask both ask you

[52:07] both about There's been a lot of

[52:09] commentary that she's subcontracted a

[52:12] couple of the toughest issues or

[52:14] toughest areas the world's the Middle

[52:15] East and Afghanistan, Pakistan to these

[52:17] special envoys. How active should we

[52:19] expect her to be on those fronts?

[52:22] >> I think you've seen the answer right

[52:23] away. She's traveling in a week to Egypt

[52:27] for a Gaza donor conference. She's going

[52:28] to the West Bank and to Israel. Uh so, I

[52:31] think you'll see her very active on

[52:32] those issues. You know, there is a lot

[52:34] going on in the world, and I think it is

[52:36] a great uh tribute to the president and

[52:39] to the secretary that they have brought

[52:40] on board very senior, very serious

[52:42] diplomats to help solve these problems.

[52:45] This is not a new phenomena. Every

[52:47] president has used this device, and I

[52:48] think it's very wise to do so in this

[52:50] very difficult time.

[52:52] >> How do you see that playing out in terms

[52:53] of her involvement in those areas?

[52:55] >> I think that's largely true. I think

[52:56] she'll continue to be engaged in these

[52:58] issues, but I also think that it's You

[53:00] could read it as a very smart and savvy

[53:02] move on her part, which is she'll allow

[53:04] uh some of these envoys, some of these

[53:05] other members of the administration to

[53:07] to bang their heads on some of these

[53:08] intractable problems, and she'll focus

[53:11] on a sort of low-risk, high-reward place

[53:13] like Asia, uh where she can really make

[53:15] her mark and make a legacy for herself

[53:17] in addition to the work she'll be doing

[53:18] inside the State Department on reform

[53:20] issues. So, she'll be engaged in all

[53:22] these issues for sure, but I think where

[53:24] she really sees uh making her mark, at

[53:26] least from this first trip and what

[53:27] we've been hearing in reports is uh a

[53:29] real focus for her on Asia.

[53:31] >> All right, Christopher Brose and Wendy

[53:33] Sherman. Thank you both.

[53:42] Again, the major developments of the

[53:44] day, stocks on Wall Street tumbled to

[53:46] their lowest levels in 11 years. The Dow

[53:49] fell 250 points and the NASDAQ was down

[53:52] more than 50. The drop came after

[53:54] reports Citigroup was asking the

[53:56] government to raise its equity stake in

[53:58] the company. And President Obama met

[54:00] with congressional leaders and the

[54:02] nation's governors to discuss economic

[54:04] issues and spending priorities. We'll

[54:07] see you online and again here tomorrow

[54:09] evening with special coverage of

[54:11] President Obama's prime-time address to

[54:14] a joint session of Congress. I'm Gwen

[54:16] Ifill. Thank you and good night.

[54:23] >> Major funding for the NewsHour with Jim

[54:26] Lehrer is provided by

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