The NewsHour with Jim Lehrer

JIM LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight, our summary of the news; then, Iraq's national conference, as reported by John Burns of the New York Times from Baghdad; some perspective on the decision to reduce U.S. troop strengths in Asia and Europe; excerpts from congressional hearings today on the state of U.S. homeland security; a Paul Solman look at jobs, outsourcing, and technology; and the Olympics as seen by Brian Cazeneuve of Sports Illustrated in Athens.

NEWS SUMMARY

JIM LEHRER: U.S. troops battled militiamen in the streets of Najaf today, one day after a shattered truce. U.S. tanks closed in on a key Shiite shrine in Najaf, where radical cleric Muqtada al-Sadr's loyalists are holed up. Members of his army also set fire to an oil well in southern Iraq. Two U.S. soldiers were killed in Najaf in fighting over the weekend. The U.S. military said a marine was also killed in Fallujah. In Baghdad, insurgents attacked two U.S. tanks in the Shiite neighborhood of al-Sadr City. U.S. casualties were reported to be light. Also in the capital, a conference of 1,300 political, religious, and civic leaders voted to send a team to Najaf tomorrow to broker an end to the 11-day uprising. The conference appealed to Shiite cleric Muqtada al-Sadr to join the political process. A senior aide to the cleric welcomed the initiatives. He said, "We are ready to accept any mediation for a peaceful solution." But he also asked religious leaders across Iraq to join the crowd gathered to shield al-Sadr's militia and the shrine from attack. The three-day conference is to elect a special 100-member council. It will oversee the interim government's conduct of national elections in January. The conference is also holding discussions on human rights, reconstruction, and the transition to self-rule. We'll have more on Iraq and the conference right after the News Summary. President Bush today announced plans for a major U.S. troop realignment. It could bring back to the states some 70,000 personnel from Europe and Asia. Addressing a Veterans of Foreign Wars Convention in Ohio, Mr. Bush said it would create a more flexible fighting force, and ease the burden on military families. We'll have more on this story later in the program. Democratic presidential candidate John Kerry gets his turn before the VFW on Wednesday. He took today off. But his running mate, candidate John Edwards, was campaigning today. He met with rural voters at a farm in Missouri to announce the democratic ticket's economic plan for rural America. It includes incentives for venture capital investment and building high-speed Internet access. Recovery efforts in Florida were in full swing today after Hurricane Charley tore across the state Friday night. At least 17 people were killed. Billions of dollars of damage was done to homes, crops, and infrastructure. Betty Ann Bowser has our report.

BETTY ANN BOWSER: Survivors in the hardest-hit areas of Punta Gorda and Port Charlotte spent the day picking through what was left of their homes.

WOMAN: This is unbelievable. You see this stuff on TV, and you don't think it can happen to you.

BETTY ANN BOWSER: Search and rescue teams continued the hunt for victims buried under the debris. The head of the Federal Emergency Management Agency said a final death toll from the category four hurricane may not be known for weeks. Authorities said hundreds of people have been reported missing, but warned that number may be inflated, because phone service is out in some areas, and because concerned relatives may have filed erroneous reports. Officials also warned residents of post-storm hazards.

JOHN AGWUNOBI: The absence of traffic signs. The absence of stop signs, the absence of traffic lights, make for very hazardous driving, especially at night. There remain trees down, obstacles in the road, and traffic fatalities are going be and injuries are going to be an ongoing problem. I would urge people to take great caution.

BETTY ANN BOWSER: The disaster zone now spans 25 Florida counties. Nearly one million people across the state are still without electricity. And power company representatives said it could be weeks before it's fully restored. Of the thousands left homeless, some 2,300 remained in shelters. Others have been waiting in line in 90-degree heat for food, water, and supplies. Some 5,000 National Guard troops have been activated to help with relief efforts.

JIM LEHRER: Venezuelan President Hugo Chavez won big in yesterday's recall election, and today pledged to serve out the rest of his two-year term. In Caracas, Chavez supporters celebrated the 58 percent vote to keep him in office. Former U.S. President Jimmy Carter helped monitor the referendum. He said the vote count was accurate. Chavez opponents had accused the government of computer fraud in the tabulations. A mourning ceremony was held today for victims of a genocide attack in the African nation of Burundi. On Friday, more than 160 Tutsi refugees were hacked, burned, and shot to death at a camp in the western part of the country. The Burundi army blamed the killings on Hutu rebels and allied attackers from eastern Congo. Tutsis and Hutus have battled for power in the region for more than a decade. Their struggles included a civil war in Burundi, and the 1994 Rwandan genocide in which 500,000 people died. At the Olympics today in Athens, American swimmer Michael Phelps placed third in the 200-meter men's freestyle. It ended his bid to match the U.S. record of seven gold medals. He also placed third yesterday in the 200-meter freestyle. He did win gold in the 400-meter individual medley on Saturday. Last night, Puerto Rico upset the U.S. men's basketball team, in a 92-73 thrashing. Video of today's events was not available due to the Olympics' television contract. We'll have more on the Olympics at the end of our program tonight. On Wall Street today, the Dow Jones Industrial Average gained 129 points to close above 9954. The NASDAQ rose more than 25 points to close above 1782. That's it for the News Summary tonight. Now it's on to the Iraqi conference; the troop redeployment; the homeland security question; the jobs debate; and the Olympics.

FOCUS DEMOCRACY ON TRIAL

JIM LEHRER: The Iraq story: Terence Smith talked with John Burns of the New York Times in Baghdad earlier this evening.

TERENCE SMITH: John Burns, welcome to the broadcast once again. Bring us up to date, if you will, on this national conference. It's its focus has certainly shifted over the weekend.

JOHN BURNS: Yeah, it's a glass half full or a glass half empty. The success in bringing to Baghdad over 1,000 delegates from every part of the country and from all but the most marginal parts of the political spectrum here is quite a success for the new Iraqi government and for the Americans here. On the other hand, the conference has been dominated from the start and thrown into some turmoil by the fighting in Najaf and the insistent demand from delegates that that fighting be stopped and that Iraqi and American troops not advance on the holy shrine at the heart of Najaf. Politics, you might say, as usual. But they're not doing a lot of business at that conference that relates to what the real task of the conference was supposed to be which was preparing for the elections in January and electing a council which will supervise the government of Prime Minister Allawi through and until those elections in January.

TERENCE SMITH: What's the state of play in the efforts to reach a compromise of some sort with Muqtada al Sadr down in Najaf? Is that going on and what are the prospects?

JOHN BURNS: Well, the government has said that the door is open for Mr. Sadr to resume negotiations, but the positions of the two sides seem to be pretty far apart. And they are essentially from the government side from the Americans that Mr. Sadr abandon his militia, disband his militia, and join the political fray and himself as a candidate in the elections. This, he's refused to do. He said the elections were meaningless, that Iraq does not need an American-style democracy. He's entrenched himself in or somewhere near that shrine in Najaf and in effect challenged American and Iraqi troops to come after him. He's pretty plain that they will not do that, at least not now. Dr. Allawi has said they will not and American commanders have said they will not. Their purpose is to squeeze him out.

TERENCE SMITH: What's the situation on the ground there, the cease-fire in Najaf certainly was battered over the weekend. What's the situation this evening?

JOHN BURNS: Well, it was battered. Three American soldiers died in the last 36 hours in fighting there. There's been renewed fighting there today but not of the intensity that we saw last week. When the fighting in the cemetery, the old cemetery that joins the mosque, took according to American accounts something close to 400 lives thats Sadr militiamen and civilians caught in cross fire so at the moment there's a hold down on that. I think both sides are warily watching the other. It's come to the point where it's really too dangerous for journalists to even enter Najaf. The provincial government in Najaf issued what amounted to "shoot to kill" orders for journalists and said any of them emerging from the hotel where many of them have been quartered would be shot on sight by snipers. This is pretty disturbing because last week's 30-day shutdown of the al Jazeera Arab language television network here and it's reporting on Iraq. It begins to look at though Dr. Allawi's government for all of its profession that it wants to protect journalists is not very keen on us giving too close a coverage to what's going on down there.

TERENCE SMITH: What's their concern? What are they worried that journalists might report if they were free to do so?

JOHN BURNS: You know, I think I've come to the brink that American forces came to back in April. There's a recognition that the American political project here, that is to say, the advance towards constitutional democracy in Iraq, is impeded, if not actually voided, by the challenge posed by Mr. Sadr and of course by the Sunni insurgent groups that at some point or another he has to be faced down, disarmed and removed from the scene at least as a military threat. The problem is that they're dealing with a very wily fellow in Mr. Sadr. He holds two trump cards. He holds the golden shrine in Najaf, the holiest shrine in Shiite Islam and he holds Sadr City, a slum of about two million people on the north eastern outskirts of Baghdad about three or four miles from where I'm standing right now. As long as he holds these two trump cards, he is a dagger pointed at the heart of the entire American enterprise here but to dislodge him from Sadr City, very difficult. urban warfare. To dislodge him from Najaf an attack on the shrine, it seems unlikely. So the outcome seems again to hinge on some sort of messy political compromise which will leave the Americans and their Iraqi partners, Dr. Allawi and his government, in the same, if you will, fraught situation that they have been in now for quite some time.

TERENCE SMITH: Mean while as that stalemate continues in Najaf and even Sadr City, what's the situation, security situation elsewhere around the country?

JOHN BURNS: Well, it is quieter, I think. There is continuing combat in and around Fallujah, in and around back Baquba, two Sunni Muslim cities. I today went on an American forces helicopter to Tikrit, which was at one time a major center of insurgency in opposition to the Americans. It's true while I was on the base there, there was firing. I could hear it. There was a graduation ceremony for a new battalion of the Iraqi National Guard, the Iraqi security forces on whom so muchhopes have been placed by the Americans for dealing with these insurgencies but there's no doubt Major Gen. Batiste, the commander of the first infantry division, told me that the situation there is very much improved from what it was a few months ago. As it is, he says across the provinces that the first infantry division is responsible for north of Baghdad so there is good news here from the American standpoint. There is, as he said, momentum in the right direction. But there is still a very widespread problem here, insurgency problem both Sunni and Shiite, and it doesn't seem likely to me that that is going to end anytime soon. And as long as it doesn't end, then the path to any kind of a democracy here, any kind of constitutional democracy, is going to be very bumpy indeed.

TERENCE SMITH: And finally, just very briefly if you would, John, what's the atmosphere like in this national congress or convention rather? Is it like an American political convention or is it like a parliament? What is it like?

JOHN BURNS: Well, I think it has to be said that it's a new thing for Iraq. I mean, of course, there were large political gatherings under Saddam Hussein. But they were convened solely for the purpose of singing the praises of Saddam Hussein and rubber stamping whatever policy he put forward. This is a real political gathering of contending political groups, different ethnic, religious, political groupings, all of whom are clamoring to have their say in the new Iraq. This of course is all good. It's just a shame for the sponsors of this conference, as I say, the United States and its Iraqi allies, that it has come to together just at the moment when the Najaf situation is so delicately poised and therefore is dominating the proceedings.

TERENCE SMITH: Okay. John Burns, thank you very much.

JOHN BURNS: It's a pleasure, Terry.

FOCUS TROOP DRAWDOWN

JIM LEHRER: Now, bringing U.S. troops home from Europe and Asia. Gwen Ifill has that story.

GWEN IFILL: Today, there are 230,000 U.S. soldiers stationed abroad, including 117,000 in Europe and 98,000 in the Pacific. Another 150,000 troops are on the ground in Iraq and Afghanistan, but the president's new troop deployment plan will not directly apply to them. The president told a Veterans of Foreign Wars meeting in Cincinnati today that restructuring the way U.S. Troops are deployed around the world is long overdue.

PRESIDENT GEORGE W. BUSH: We will ensure that our forces are well prepared and well positioned to meet the threats of the future. Our armed forces have changed a lot. They're more agile and more lethal. They're better able to strike anywhere in the world over great distances on short notice. Yet for decades, America's armed forces abroad have essentially remained where the wars of the last century ended, in Europe and in Asia. America's current force posture was designed, for example, to protect us and our allies from Soviet aggression. That threat no longer exists.

More than three years ago, we launched a comprehensive review of America's global force posture, the numbers, types, locations, and capabilities of U.S. forces around the world. We've consulted closely with our allies and with Congress. We've examined the challenges posed by today's threats and emerging threats. And so, today I announce a new plan for deploying America's armed forces. Over the coming decade, we'll deploy a more agile and more flexible force, which means that more of our troops will be stationed and deployed from here at home. We will move some of our troops and capabilities to new locations, so they can surge quickly to deal with unexpected threats. We'll take advantage of 21st- century military technologies to rapidly deploy increased combat power.

The new plan will help us fight and win these wars of the 21st century. It will strengthen our alliances around the world while we build new partnerships to better preserve the peace. It will reduce the stress on our troops and our military families. Although we'll still have a significant presence overseas, under the plan I'm announcing today, over the next ten years we will bring home about sixty thousand to seventy thousand uniformed personnel, and about a hundred thousand members and civilian employees, family members and civilian employees. See, our service members will have more time on the home front, and more predictability and fewer moves over a career. Our military spouses will have fewer job changes, greater stability, more time for their kids and to spend time with their families at home. The taxpayers will save money.

As we configure our military to meet the threats of the 21st century, there will be savings as we consolidate and close bases and facilities overseas no longer needed to face the threats of our time and to defend the peace. The world has changed a great deal, and our posture must change with it, for the sake of our military families, for the sake of our taxpayers, and so we can be more effective at projecting our strength and spreading freedom and peace.

GWEN IFILL: For more on the presidents new plan, we go to retired Army Gen. George Joulwan, who served as supreme allied commander of NATO forces in Europe from 1993 to 1997; and to Lawrence Korb, a former assistant secretary of defense in the first Reagan administration. He's now a senior fellow at the Center for American Progress, a public policy research group in Washington. We just heard, General, the president say that the world has changed, therefore, the armed forces or at least the deployment of the armed forces has to change. What do you think overall of his plan?

GEN. GEORGE JOULWAN: Well, first of all, this has been ongoing now for some time since the end of the Cold War and really since the first Gulf War we have been restructuring our forces. We went from about 320,000 in 1989 and '90 to about 100,000 in 1994 when I was the supreme commander. We adjusted our force structure then, given the instability we had in the Balkans and what was going on in eastern and central Europe.

This current restructuring-- and it's a restructuring, not just a redeployment, I think we have to understand that -- when we look at the details of that with a new striker brigade going in the Graffenvere with the southern Europe task force in Vincenza, Italy, being beefed up to a brigade size airborne force, it's restructuring. I truly think it's a good idea based on our capabilities and on threats we face to really do this. But we should be doing it in coordination with our allies importantly and particularly in Europe.

GWEN IFILL: Mr. Korb, is this the kind of restructuring that the armed forces need.

LAWRENCE KORB: No. I think right now the armed forces the army needs more people. This does not give the army any more people. What this does is announces something that's not going to take place for a couple of years. Its not going to start until 2006. I don't know why you had to do it now. It's not going to save any money. The president talked a lot about that. As the General knows we have wonderful facilities in Europe. If you bring those forces home to the United States, you're going to have tobuild new facilities, you're going to have to send the dependents of those people to schools. A lot of our schools around the bases are already overextended. And the president also gave the impression particularly when it came to Germany that those forces are still in Germany to defend Germany. Both of the heavy divisions, the first infantry and the first armored division that are in Germany have actually been to Iraq. In fact, one of them is still in Iraq right now. And this gives you a place... you're closer to the Middle East than you would be if you brought the troops back home. So I really don't see the need for it. And when he talked about Asia, they're talking about withdrawing 13,000 troops from South Korea. Well that's not a good idea until you get the situation with North Korea settled. In fact, that might be a good bargaining chip that you might have with Kim Jung Il in return for him cutting back his weapons.

GWEN IFILL: Well, let me ask you, General, specifically about what happens in Europe and Germany and what happens specifically where most of these troops will be coming from or going from and what would happen on the Korean Peninsula in particular.

GEN. GEORGE JOULWAN: First of all, in Europe I think we have to have truth in lending here. There is really -- this has been going on for... from the Clinton administration, we took nearly 200,000 troops out of Europe by the time... by '94 and '95. And it started in the first Bush administration. So this has been going on for some time, and I think we're still going to have a mixture of forces in Europe and elsewhere to include Asia that can protect our interests. This should not be a Republican issue or a Democratic issue. This is an American issue of how we structure our forces to meet the threats. And we have to have more agility. Some of us have been calling on this for ten or fifteen years and more flexibility in our force to meet those threats. We still need heavy forces. We need power projection. We need to be able to do that. I don't think this current plan where it's going to take us down from 117,000 or whatever the number is now down to maybe half of that forward deployed permanently deployed are coming home. But there will still be more forces sent over there to these forward operating bases so we don't really know what the bottom line number is going to be in Romania or Poland or wherever we may station these forces. I think we need to get into those details. But strategically I think it's important that we realize we need heavy forces and hopefully we will keep those heavy forces in the force but we need to be able to align ourselves to be able to respond quickly and effectively to threats that we face around the world.

GWEN IFILL: When we talk about looking at this strategically, does this have any direct or indirect affect on what we're doing in Iraq and Afghanistan, ongoing wars?

LAWRENCE KORB: None whatsoever. I mean, the key problem facing the military today is your active- duty army is too small to maintain your deployments in Iraq and Afghanistan. Youre over-relying on reserve units. You've called up a lot of reserve units more than once. You've extended them. Youve got -- many active duty units have had to go back without having spent very much time back in the United States. You've got a stop loss provision to prevent people from getting out even when their enlistment expires. That's the problem you need to be dealing with. Maybe over the next ten years this is something you want to work on but that's not your immediate problem. And that's what I wish the president would have addressed today rather than this other plan.

GWEN IFILL: Gen. Joulwan.

GEN. GEORGE JOULWAN: As a commander that has spent a lot of time in Europe, I've spent 18 years in Europe. I've commanded every level in Europe, we're still maintaining which needs to be mentioned here Ramstein Air Base will still be there. Keizerslanden, the logistics base, much of that will remain. We will have, as I said, forces in Italy. Aviano Air Force Base will remain so we have to look at the numbers here. What is really going to happen? What are the permanently assigned forces with the families coming home, what will replace them in six-month deployment rotational forces? That has yet to be decided. I really think this gives us a more flexibility strategy. I just hope we do not get rid of the armored forces once they come back to the United States. That's going to be key in this.

GWEN IFILL: Do you agree that there's no direct connection between what's happening here and what's happening with the forces deployed in Iraq?

GEN. GEORGE JOULWAN: Well, first of all those forces in Iraq are from the first armored... the first infantry division and the first armored division was there. I am very concerned... we did this after the first Gulf War where we prematurely brought forces home and their families suffered a great deal. While those forces are in Iraq, we should not have this concern by families in Europe that somehow while their husbands or wives are in Iraq they're going to be sent back immediately back to the United States. But the numbers will not affect our troop strength in Iraq. The families are concerned for the redeployment.

GWEN IFILL: Well, let's talk about numbers in a broader sense. There seems to be a fundamental disagreement about whether military forces are indeed stretched thin around the world and whether this sort of restructuring will exacerbate that or will fix it, will help it. What is your opinion on that?

LAWRENCE KORB: I don't think it will help it at all because as the general mentioned and I said the forces from Germany have gone to Iraq. So the fact that you have them in Germany is not keeping you from sending them to Iraq. The forces in Korea, if you take them out of Korea before this situation is settled -- you can't be sending them all over to Iraq or Afghanistan so I don't think it does anything at all to deal with what's the immediate problem. The General was mentioning, well, I hope we don't get rid of these armored divisions. Well, the fact of the matter is you're going to need some peace-keeping and reconstruction units, whatever you might want to call them, to go in after the conventional wars are over as we've seen in Iraq and Afghanistan where we don't have them. That's what you need to be working on.

GWEN IFILL: General.

GEN. GEORGE JOULWAN: Let's again have truth in lending here. Right now we've got about 33 brigades in this new concept the army is going to. There is a plan to go to 43 to maybe 48 brigades. That is a very sizable force. Now that increase needs to be approved but that is where the army is heading. That to me is extremely significant for where we're going in the future. That shows to me an increase in capability and an increase in end strength for the army but the army is planning now hopefully with both political approval and congressional approval to go to 43 and hopefully then 48 brigades. And that's extremely significant.

GWEN IFILL: Will this save money?

LAWRENCE KORB: No. In fact it's going to cost you money. One of the things again with the... you got the impression that these troops are over there and it's a big expense to the taxpayer. As a matter of fact, you have very good bases, a lot of them built with money from the host country, in this case mainly Germany. You have subsidies that are given by the German government according to the Pentagon we've got about a billion dollars worth of subsidies last year. You got wonderful facilities. You bring them back here. You have to construct new facilities. You're going to have to pay the base closings. If you move some of these troops as the General was talking about and the Pentagon seems to be indicating to Eastern Europe you're going to have to fix the bases up there. You have terrible environmental problems you're going to have to deal with in those bases.

GWEN IFILL: Let me ask you the General the same question.

GEN. GEORGE JOULWAN: The jury is still out on that. The devil is in the details here about the rotational forces. There was something called Brigade 75 back in 1975 where we tried this bringing a rotational brigade over. It costs a lot of money to do that particularly if you're going to rotate on these forward-operating bases every six months. But the key is though the strategic look of what we're trying to do globally. Then you have to put a price tag on it. I don't really thrill it's going to save that much money to be very honest with you.

GWEN IFILL: Gen. George Joulwan, a moment of agreement, and Larry Korb, thank you both very much.

JIM LEHRER: Still to come on the NewsHour tonight, congressional hearings on security; Paul Solman on jobs; and the Olympic Games in Athens.

FOCUS ARE WE SAFER?

JIM LEHRER: The homeland security hearings: Kwame Holman reports.

KWAME HOLMAN: TSA, the Transportation Security Administration, was created after the 9/11 attacks to better protect the nation's airways, railways, ports and borders. But seated before the Senate Commerce Committee this morning, the two chairmen of the 9/11 Commission criticized TSA for moving too slowly in its mandate. Vice Chairman Lee Hamilton.

LEE HAMILTON: Despite congressional deadlines, TSA has developed neither an integrated strategic plan for the transportation sector nor specific plans for the various modes. Without such plans, neither the public nor Congress can be assured we are identifying the highest priority dangers and allocating resources to the most effective security measures.

KWAME HOLMAN: As undersecretary of homeland security, Asa Hutchinson oversees the work of TSA.

ASA HUTCHINSON: As the Commission has recognized, the U.S. transportation system is vast and in an open society is impossible to secure completely against terrorist attacks. But despite this inherent challenge, we continue to make progress every day. We're confident that we can significantly protect the transportation system by continuing to evaluate vulnerabilities, prioritize risks and focus resources accordingly.

KWAME HOLMAN: Nonetheless Hamilton said too little has been accomplished.

LEE HAMILTON: However, the time for planning to plan is past. We need specific blueprints that provide the architecture to defend critical transportation infrastructure.

KWAME HOLMAN: Hutchinson responded, arguing that improvements in transportation security have been made particularly with the use of no fly lists that screen out suspicious passengers.

ASA HUTCINSON: Prior to 9/11, there were fewer than 100 names on the no fly list. Today TSA provides carriers with no fly and select-t lists which have been dramatically expanded.

KWAME HOLMAN: However, commission chairman Tom Kean said the lists of potential terrorists given to air carriers still are incomplete.

THOMAS KEAN: As we understand it, the intelligence community doesn't want air carriers to possess many of these names because they feel maybe they could tip off terrorists or compromise sensitive sources and methods of intelligence collection. Now as the Commission described in its final report two of the 9/11 hijackers were placed on the U.S. State Department's tip-off terrorist watch list in August of 2001. However, these names were never reported to the FAA to be placed on the no fly security directive.

KWAME HOLMAN: Kean and the 9/11 Commission have recommended the federal government take from the airlines responsibility for the no fly lists.

THOMAS KEAN: If a terrorist attempts to fly, TSA, not the airlines, should be the first one to know and the first one to act.

KWAME HOLMAN: Asa Hutchinson agreed.

ASA HUTCHINSON: That's what has to change. We recognize that and agree with that recommendation. We'll be taking steps to accomplish that.

KWAME HOLMAN: North Dakota Democrat Byron Dorgan raised the case of Richard Reid who two years ago attempted to ignite explosives hidden in his shoe aboard an airliner. Dorgan noted reports that the FBI has determined Reid would have succeeded had he use add cigarette lighter rather than matches.

SEN. BYRON DORGAN: With all of this knowledge and information and particularly the vulnerability with respect to the shoe bomber and what we learned about that, last September the new rules coming from TSA said that it will be all right for passengers to take two butane lighters and four books of matches on an airplane. I frankly think that's nuts. But, you know, I'm not running things down there. Mr. Hutchinson when I raise that issue the last time you were here you indicated that you're taking a good hard look of that in light of the new evidence. I'm wondering where you are in TSA on that issue.

ASA HUTCHINSON: The torch lighters, those that blow out those are prohibited. As you indicated the ordinary lighters are not. That is being looked at. But there is a concern that we just simply do not create rules that inconvenience the public but absolutely does not enhance our security capability so that's what we're weighing.

SEN. BYRON DORGAN: Mr. Hutchinson, you know, Sen. Wyden and I raised this issue six or seven months ago. It's been looked at for six or seven months. I frankly see no reason for people to take butane lighters on airplanes especially given the fact that we now know according to an FBI official that Richard Reid might have blown that plane out of the sky had he had a butane lighter.

KWAME HOLMAN: Maine Republican Olympia Snowe turned to the nation's seaports complaining the Bush administration hasn't spent enough to protect them.

SEN. OLYMPIA SNOWE: We're only spending $500 million on implementing port security mandates. We have 361 ports in America. All those plans have been in place as of July 1. The Coast Guard has estimated that it will cost $7 billion over the next ten years to implement those port security mandates. And yet we're only $500 million. The requests for next year is down I think 63 percent, down 69 percent from two years ago in terms of our port security grants. We're only going to provide $46 million. That's the request for next year. That simply is unacceptable.

KWAME HOLMAN: Commissioners Kean and Hamilton head to the House side of the Capitol tomorrow where they will appear before the Select Homeland Security Committee.

FOCUS JOB THREAT

JIM LEHRER: Jobs, technology, and outsourcing: The big three of the current discussions about the U.S. Economy. Our man of economics, Paul Solman of WGBH-Boston, has been conducting one with two prominent economists. Here is his report.

ED LANDRY: I said we went to lunch and our jobs went to China.

PAUL SOLMAN: Machinist Ed Landry last year. The U.S. was coming out of the recession but he was still jobless. Is that literally where your job went.

ED LANDRY: That's right. After 38 years in the same shop.

PAUL SOLMAN: Retraining to land a computer-controlled machine shop, Landry had plenty of company: Other laid-off machinists trying to make the shift from manual to mental labor.

SPOKESPERSON: Any information right now? Hank.

PAUL SOLMAN: At New York City's 5:00 Club for Unemployed Managers and Professionals the jobless recovery was also taking its toll.

WOMAN: Finding the people, putting yourself out there all the time, keeping the energy level up. That's what's hard. You know, maintaining the belief in yourself.

MAN: If you send out your resume on the Internet and you don't get anything back, I mean, that's probably the worst kind of rejection of all because you don't even rank. Please give me a no. I'll take a no at this point.

PAUL SOLMAN: If last year the job hunt seemed as futile to the white collar unemployed as it was to their blue collar brethren when we checked in with this group one year later almost everyone had a job: In several cases, better jobs than the ones they've lost. That supports the new thesis of Frank Levy and Dick Murnane. Technology like those computers behind them the professors argue in a book The New Division of Labor is dividing jobs into two distinct camps: One with those who can be replaced by computers or foreign workers and another camp with those who can't be.

FRANK LEVY: The basic message I think is that while the number of jobs is growing, there's a chunk of jobs in the 20 to 35 dollar an hour range, a lot of blue dollar jobs and clerical jobs that are really being taken over both by computerized work and also by off shoring.

RICHARD MURNANE: A key distinction is between the number of jobs and the mix of jobs. As we come out of the recession, the number of jobs will grow and it will be back close to full employment again. But the key thing to remember is that the mix of jobs is changing quite dramatically for a variety of reasons, computerization at the core, and that trend will continue so the jobs, for example, in manufacturing that are lost will not come back as we come out of this recession.

PAUL SOLMAN: Is it the computer that's threatening jobs or outsourcing?

FRANK LEVY: Computerization and outsourcing are working on the same jobs. To computerize a job, you have to be able to express the tasks in rules. So, for example, if you look at these kiosks that do boarding passes in airports, the reason you can automate that is because it's just a set of yes and no questions.

PAUL SOLMAN: That's what computers do. Follow rules programmed into them by humans. It's not much different, says Levy for the off shore workers at those now famous Indian call centers. Their programming is the script they read when booking your airline tickets or taking and confirming a purchase.

FRANK LEVY: So in the case of the centers, the simplest call center work is being handled by continuous speech recognition software. The more complicated call center work is being handled by people sitting in Bangalore.

PAUL SOLMAN: It raises the question: Are the Indian workers threatened?

FRANK LEVY: Yes they are. Absolutely, they're threatened.

SPOKESMAN: Theres high computer literacy, excellent Internet connections.

PAUL SOLMAN: The case of transcribing doctor's dictations as touted in this PR video for a Pittsburgh firm that now sends those dictations to India but probably not for much longer as computers become more sophisticated.

FRANK LEVY: Both in India and in this country people are beginning to move to continuous speech recognition software to just transcribe those notes directly so in some sense it's the computer that's at the bottom of that food chain and outsourcing is speeding up what the process is. But it's not the end of the line by any means.

PAUL SOLMAN: To Murnane and Levy, an American job tends to be safe from computers and foreign competition to the extent that it isn't ruled based is what they call face-to-face.

FRANK LEVY: You look at the job trends and where we're going. We're really heading towards a face-to-face economy where the kinds of work that's done here either involves face-to-face interaction with other people because a lot of that can't be automated or it involves working face-to-face with something that's grounded here like a work on a construction project or a mechanic working on a car.

PAUL SOLMAN: So if I ask you if my job is safe, you say to me is it face to face? Can it be described by rules?

FRANK LEVY: You want to make the connection between those two things. If you think about what you do, you're processing a lot of conversational speech. Suppose I say the word bill, right? And you hear that. And the question is what does that mean? What do I mean by the word bill? Am I talking about a piece of currency? Am I talking about a piece of legislation, the front end of a duck? The only way you're going to answer that question is to think about the whole context of the conversation. But that's very complicated work to break down into some kind of software. And you're also sort of relating to the people you're interviewing kind of an emotional level to elicit responses, to get them to sort of really think about questions and so on. None of that stuff can be described in rules.

RICHARD MURNANE: Your body language, your tone of voice, the type of eye contact. Thats vast amounts of information that skilled humans are very good at processing and knowing what to do with, but that turns out to be extraordinarily hard to program computers to do well.

PAUL SOLMAN: A case in point might well be the anxious unemployed we met last year at the 5 Oclock Club, networking, reviewing their job prospects, critiquing one another. No rules could be written to computerize or script such a process.

FRANK LEVY: What they were doing sitting around a table was honing face-to-face skills. I mean, they were all in those kinds of professions-- advertising, marketing, dealing with other people, so on and so forthand what they were practicing at that table was the thing that would eventually get them all reemployed. The other part, it's the growth in those professional and managerial jobs most of them were in those slots, they were in a recession. They didn't see it then but they were in a part of the economy that was growing.

PAUL SOLMAN: Ed Landry and his fellow machinists by contrast were being retrained in very specific skills. Landry himself chose to retire instead of continuing but even if you've got a job in the face-to-face economy, that doesn't mean it will be a stable one.

RICHARD MURNANE: Job turnover in the United States is vastly higher than it is in other countries. So consequently Americans need to be aware that they're going to have many jobs and they need to cope with these transitions between jobs that are often tough for many people.

FRANK LEVY: If you look over the last ten years or so, every three months about seven million jobs are destroyed and about seven million jobs are created.

PAUL SOLMAN: Seven million in a work force of 135 million.

FRANK LEVY: That's right.

PAUL SOLMAN: So U.S. job turnover is huge in recessions and recoveries alike. But the longer-range question is, what kind of jobs will we turn over into? Only 25 percent or so of Americans get a four-year college degree. They are the ones learning the skills that computers and increasingly sophisticated foreigners can't do, but what are the job prospects of the other 75 percent of us?

Face-to-face work nearer the bottom of the job ladder or off the ladder entirely. It's a real problem for which Dick Murnane and Frank Levy find the stock answer-- education and job retraining-- insufficient.

FRANK LEVY: Education is a long-run answer but in the short run you have a lot of issues about the safety net and how you take care of people who have lost jobs.

PAUL SOLMAN: People who may not get other jobs anytime soon.

FINALLY XXVIII OLYMPICS

JIM LEHRER: Finally tonight, the Athens Olympic games, and to Jeffrey Brown.

JEFFREY BROWN: On the one hand after all the worry over security, drugs and incomplete facilities, the Olympics are underway. And the focus is mostly where it arguably belongs: On the athletics. On the other hand, for Americans at least, the athletic start has been shaky at best. Among the shakiest the U.S. men's basketball team made up of NBA players, was trounced yesterday by Puerto Rico in its first game. It's the first-ever loss for the U.S. with professionals playing. Also yesterday the men's swimming team had its worst showing ever in the 400-meter freestyle relay coming in third behind South Africa and the Netherlands. And today the most publicized of those swimmers, 19-year-old Michael Phelps, lost his much- anticipated showdown with Australian star Ian Thorpe in the 200-meter freestyle. Phelps finished third.

For an update from Athens I'm joined by Brian Cazeneuve, Olympics writer for Sports Illustrated now covering his 10th games.

And, Brian, welcome; let's start at the pool where you were today. What's the feeling among the swimmers about the competition so far?

BRIAN CAZENEUVE: Well, I think some of the U.S. swimmers have done very well. They got gold medals tonight from Aaron Piersal and Natalie Coughlin. I think as far as Phelps was concerned, he took on Australias Ian Thorpe in Thorpe's premiere race or one of Thorpe's best races, the 200 freestyle. Thorpe by contrast is not taking on Phelps in any of his good races. This was a personal best for Phelps in his attempt tonight. So I don't think that he did all that badly. He has three medals in three races. The expectations were very, very high for him. He has done well. He is not going to break Mark Spitz's record but it still could be a good performance for him nevertheless.

JEFFREY BROWN: The expectations were extremely high, weren't they? I mean, he was the pre-Olympics... he was the story. So are people now thinking that this was over hyping of Michael Phelps?

BRIAN CAZENEUVE: Well, it might have been. Spitz won seven gold medals in 1972. That's a feat that probably will not be duplicated in any of our lifetimes. Phelps went out to swim in eight races. He may still win eight medals. At this point the most he can win in terms of gold medals is six, four or five gold medals with eight total medals would still be an outstanding showing, one of the great performances in swimming history and Olympic history and because the expectations were so high, I hope that people don't lose sight of that and keep it in its proper perspective.

JEFFREY BROWN: Now then there's the basketball team; 12 years ago the so-called dream team trounced ever comer by more than 40 points a game. And now they've lost to Puerto Rico. What's going on?

BRIAN CAZENEUVE: Well, first of all, back in 1992 in Barcelona when they trounced everybody, all of the top NBA players wanted to play, begged to play. This was a novelty so you had Michael Jordan, Magic Johnson, Larry Bird, some of the legends in the history of the game who were clamoring to be on that team. Isaiah Thomas one of the great players is probably still angry that he was not selected for that team. This time around some of the luster has kind of worn off. And some of the best players in today's game-- Shaquille O'Neal, Kobe Bryant, Kevin Garnett-- did not choose to play. While there are NBA players on this team, it is not the first tier of players. And then to make matters worse along the way several players who had accepted invitations subsequently dropped out. So it with as very difficult for the coaching staff to plan ahead for other countries that have practiced together and played together in international competitions all over the world for a great many years. So this is a case of the whole being better than the sum of the parts.

JEFFREY BROWN: Brian, another issue that we've been reading about is all the empty seats we see. It was very noticeable for those of us watching last night especially at the women's gymnastics for example but I've seen it in other sports as well. Where are all the spectators?

BRIAN CAZENEUVE: Well, at the in-demand events, there are many people. The swimming was sold out. The opening ceremonies were sold out. I would assume that sports in which the Greek team is expected to do well such as weightlifting will be sold out. But there's really been a drop-off between the in-demand events and some of the smaller events. There have been crowds in the low hundreds in sports like archery and other sports and even in gymnastics which we in the United States consider to be a major sport. There were not big crowds. The Greeks have a couple of good gymnasts who will be competing later on in the games. And you can expect to see the crowds rise for that. But I think all along the Greeks were very sensitive about the lack of advance ticket sales and so they did not publicize very well the fact that there were a lot of tickets remaining. They've only done that in the last month or so and sales are picking up but again in the in- demand events -- in the smaller events, very, very sparsely attended.

JEFFREY BROWN: Now what about some of the good news stories that perhaps were missing or not paying enough attention to? One I know that's gotten some attention was the Iraqi soccer team -- winning its first two games. Are there some individuals or teams that you're watching for?

BRIAN CAZENEUVE: Well, I'll start with the Iraqi soccer team that you mentioned. They've won their first two games against Portugal and Costa Rica. It was a real celebration, a real party on the field every time the Iraqis scored a goal their fans stormed the field and started celebrating, laughing, cheering. It's a sort of liberation I think for some of the Iraqis, many of whom are recent expatriates. The Iraqi team as a matter of fact doesn't even have a home to play in because right now their main stadium in Baghdad is being watched over by U.S. forces. Their home games have been played in Amman, Jordan. So this has been, as I said, a real coming-out party for them, a real liberation for them. They've advanced because of their two victories into the quarter finals. And so that's probably I think the real feel-good story of the games. As for something to look forward to that Americans, for example, may not be used to, the fencing team is very good here. We've never won a gold medal in Olympic fencing.

There's a fencer named Sada Jacobsen who is an Ivy League student. She'll be going for a gold medal. She's the top ranked woman in the world in saber fencing. And later this week she'll have a chance to win a gold medal and make history in a sport in which Americans are probably not that familiar.

JEFFREY BROWN: Brian, finally, after all the security concerns and concerns about not finishing all the infrastructure on time, what does it feel like there? Does it feel like an armed camp? Do things work?

BRIAN CAZENEUVE: Things have worked remarkably well under the circumstances. It doesn't feel oppressive. There's security where you'd expect there to be security in front of venues that are held for the sporting competitions in front of the major hotels. There is not an armed guard on every street corner. I don't think the Greeks could afford to do that. But also there's a feeling of growing passion that's sort of building with these games after I think the opening ceremonies that went off pretty smoothly. I think the closest comparison is the '92 games in Barcelona. A smallish city in southern Europe that was very, very far behind schedule came through with wonderful games. People romanticize about those games and forget how far behind they were. The Athenians I think are hoping that their games will be remembered much as those were. So far they've off to a great start.

JEFFREY BROWN: Okay, and lots more action to come. Brian Cazeneuve from Sports Illustrated, thank you very much.

BRIAN CAZENEUVE: Thank you.

RECAP

JIM LEHRER: Again, the major developments of this day: U.S. troops battled militiamen loyal to Shiite cleric Muqtada al-Sadr in Najaf one day after a truce was shattered. In Baghdad, a national conference of civic, religious, and political leaders dispatched a team to Najaf tomorrow to broker an end to the 11-day uprising. And President Bush announced plans for a major U.S. troop reorganization. It will not affect U.S. troops in Iraq and Afghanistan. We'll see you online and again here tomorrow evening with a Newsmaker interview with Defense Secretary Rumsfeld, among other things. I'm Jim Lehrer. Thank you, and good night.