The NewsHour with Jim Lehrer

JIM LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight: Our summary of the news; then the Supreme Court's thumb's up to the campaign finance law, with Jan Crawford Greenberg; a campaign snapshot from the Democratic presidential debate last night in New Hampshire; a look at the U.S. decision to restrict what countries can participate in Iraq reconstruction contracts; a report on the Iraq symphony's performance at the Kennedy Center in Washington; and a new book conversation with Former Treasury Secretary Robert Rubin.

NEWS SUMMARY

JIM LEHRER: The U.S. Supreme Court upheld the key parts of the new campaign finance law today. The court voted five to four in favor of banning unlimited donations to political parties, known as soft money. The majority opinion said: "There is substantial evidence that large soft-money contributions to national political parties give rise to corruption and the appearance of corruption." The court also allowed curbs on political ads in the final weeks before an election. We'll have more on the story right after this News Summary. Two U.S. soldiers were killed in separate attacks in northern Iraq today. Both came in Mosul, where they have been repeated strikes at coalition forces in recent weeks. And in Baghdad today, a U.S. transport plane was forced to turn around and land just after takeoff. The military said an engine exploded. Some news reports said the plane was hit by a missile. A new U.S. policy on rebuilding Iraq drew sharp criticism overseas today. It says companies from nations that opposed the war may not bid on postwar contracts. In response, Germany said it could not accept the policy, France said it wasn't sure the move was legal, and Russia warned it might refuse to forgive some of Iraq's huge debt. But in Washington, White House spokesman Scott McClellan defended the policy.

SCOTT McClellan: I think it's perfectly appropriate and reasonable to expect that the prime contracts for reconstruction funded by U.S. taxpayer dollars would go to the Iraqi people in those countries who are working with the United States on this difficult task of building a free, prosperous and sovereign Iraq for the Iraqi people.

JIM LEHRER: McClellan said countries can still become eligible for reconstruction work if they give money or troops. Later in the day, the Defense Department delayed advertising new contracts for the second time in a week. A spokeswoman said there were insurance and security issues. We'll have more on the contracts story later in the program. The U.S. is paying Halliburton Company far more than others charge for fuel in Iraq. The New York Times reported that today, citing army documents. Halliburton is Vice President Cheney's old company. The Times said it's getting $2.46 cents a gallon for fuel. The Iraqi State Oil Company charges less than half that. Halliburton said it has to cover the high cost of security, among other things. The Iraqi governing council formally established a tribunal today, to try members of Saddam Hussein's regime. It will cover genocide, war crimes, and crimes against humanity. A council member said Saddam himself would be tried in absentia. In a raid today, U.S. forces arrested 41 people south of Baghdad. Some are suspects in the killing of seven Spanish intelligence officers last month. In Afghanistan, the U.S. Military announced six children were crushed to death last Friday, during an attack by American troops. The target was a weapons compound near Gardez, in the eastern part of the country. A military spokesman said today a wall fell on the children during the assault.

MAJ. RICHARD SATER: Though we don't know exactly what caused the wall to collapse, we know that it was a military compound. It was a military target and subject to significant coalition fire power resulting in sustained secondary explosions because of the large amount of enemy munitions that were stored there.

JIM LEHRER: Another spokesman said the military did not want to kill civilians, but he said they should not be hiding amid weapons and ammunition. In a separate incident last weekend, nine children were found dead after an air strike in a neighboring province. The United States has apologized for that incident. The president of Taiwanassured the U.S. today he has no plans to provoke China. But Chun Shui-Bian defended planned referendum, demanding china remove missiles aimed at the island. He said: "We urge the international community not to treat China's military threats and its deployment of missiles as a natural state of affairs." On Tuesday, President Bush warned Taiwan against taking any steps toward independence. San Francisco has a new mayor-elect, Democrat Gavin Newsom. He fended off a strong challenge from a Green Party candidate in Tuesday's runoff election. Newsom is a city supervisor and a wealthy restaurant owner. The current mayor, Willie Brown, could not run again because of term limits. The giant mortgage handling firm Freddy Mack agreed today to pay a civil penalty of $125 million. Federal regulators had accused the government-sponsored corporation of management misconduct and directors' complacency. Freddy Mack has acknowledged it understated earnings by $5 billion over two years. The company still faces a criminal investigation. On Wall Street today, the Dow Jones Industrial Average lost 1.5 points to close below 9922. The NASDAQ fell more than three points to close at 1904. Robert Bartley, the editor emeritus of the Wall Street Journal, died this morning at a hospital in New York. He had cancer. Bartley served some three decades as the paper's editorial page editor, and later, editor. He won the Pulitzer Prize in 1980, and was recently awarded the presidential medal of freedom. Robert Bartley was 66 years old. That's it for the News Summary tonight. Now it's on to: Campaign finance reform remains the law of the land; last night's democratic debate; who should be allowed to reconstruct Iraq; the Iraq symphony comes to Washington; and former Treasury Secretary Robert Rubin.

FOCUS - CAMPAIGN FINANCE REFORM

JIM LEHRER: The Supreme Court upholds campaign finance reform, and to Gwen Ifill.

GWEN IFILL: In today's eagerly awaited decision, the court essentially upheld Congress' right to limit the influence of money in politics. Writing for the majority in the 5-4 decision, Justices John Paul Stevens and Sandra Day O'Connor said, "we are under no illusion that BCRA-- the Bipartisan Campaign Reform Act-- will be the last congressional statement on the matter. Money, like water, will always find an outlet." In his dissent, Justice Antonin Scalia called the ruling "a sad day for freedom of speech," writing, "who could have imagined the court would smile with favor upon a law that cuts to the heart of what the First Amendment is meant to protect: The right to criticize the government."

For more on the court's decision-- all 300 pages of it-- is Jan Crawford Greenburg, who covers the Supreme Court for the Chicago Tribune and has been doing a lot of reading today, Jan.

JAN CRAWFORD GREENBURG: Here it is.

GWEN IFILL: Here it is: Three separate majority opinions on this. What did they say?

JAN CRAWFORD GREENBURG: Well, the main opinion, as you said, was written by Justices Stevens and O'Connor. And it addressed provisions in this massive law that were designed to close loopholes, loopholes that had allowed corporations, wealthy individuals, labor unions to contribute large donations to the nation's political parties. The political parties were to use those donations for party building and to get the vote out. But instead, as the court found today and as supporters of the law have long argued, those large donations were being used to influence federal elections and were being used to circumvent previous federal election laws. McCain-Feingold, the lawin the court today, said that those kinds of donations were illegal. The court agreed.

GWEN IFILL: The reason this ended up in the Supreme Court is because the people who challenged the law, Senator Mitch McConnell among them, said that in fact free money equals free speech, which is money is speech and therefore shouldn't be regulated in that way. Did the court just outright say that's not true?

JAN CRAWFORD GREENBURG: Well, the court said that money and donations that can lead to corruption or the appearance of corruption in the political process is certainly not protected speech. The court was persuaded today by arguments that supporters of the law have long pushed that they're not restricting speech when they're banning these kinds of donations. What they're doing is trying to deter corruption or the appearance of corruption that could erode the way the public views the political process and the integrity of the political process, such that the supporters of the law and the court in its decision today agreed these restrictions are necessary to preserve the integrity of the process.

GWEN IFILL: The court also upheld a portion of the law which would allow... which would ban advertising too close to a campaign.

JAN CRAWFORD GREENBURG: Right. And these involve the so kind of called issue ads, ads that you sometimes see very close to an election that don't specifically mention a candidate by name but certainly identify him. The court's ruling today among other things said that the law was perfectly fine and constitutional when it limited corporations and labor unions from taking money out of their general treasury funds to pay for these kinds of ads. They said that these groups have to use money out of their Political Action Committees. And they also upheld other restrictions on these kinds of advertisements.

GWEN IFILL: Jim said in the News Summary that key parts of the law were upheld. Was there anything that was struck down?

JAN CRAWFORD GREENBURG: Only two very minor provisions in the law including one that had limited contributions by juveniles. But those were very minor provisions and the ballgame, the restrictions on soft money really that was at issue, that was upheld in its entirety. This was a very sweeping ruling, a broad ruling, upholding this law that went much further than supporters, many supporters of the law had even dared hope. So it was a tremendous victory for supporters of the law.

GWEN IFILL: The Justices wrote about the pernicious influence of big money campaigns. Do they think that by upholding this law that they have ended that?

JAN CRAWFORD GREENBURG: No, they don't. And they actually address that when they say that money, like water, is going to find another outlet. Now opponents of this law and opponents that I spoke with this afternoon say that money already has that outlet. Keep in mind that this law has been in place while the court was considering this decision and how it was going to rule. And so they note that people already have created committees and groups to start accepting these big-money donations that used to go to the political parties so they say this law has really had an adverse effect because it's created these new organizations. The court today acknowledged that money will find another outlet and it said that it has, you know, knows it hasn't heard the last of this issue. What Congress does to address that certainly will come before the court in the future the court acknowledged.

GWEN IFILL: Dissenting Justices had some pretty tough words for this decision today.

JAN CRAWFORD GREENBURG: That's right. As you said, Justice Scalia called it a sad day for free speech. Justice Thomas said that the freedom of the press was going to be next on the chopping block because the press, he said, like the political parties and other organizations, would want to influence federal elections through its editorials. The Chief Justice wrote a separate dissent expressing concern that this law infringed on the associational rights and the free speech rights of political parties and wealthier individuals and corporations. And Justice Kennedy also wrote a very strong dissent decrying the court's ruling today. So all the Justices that were in dissent made points that today's ruling got to the heart of speech that our First Amendment was designed to protect, and that is the right to criticize the government. Justice Scalia particularly said that Congress, when it passed this campaign finance reform law, wasn't really trying to protect the process. They were trying to protect themselves and that the law would enable incumbents to remain in office. It stifles speech.

GWEN IFILL: Once again, Sandra Day O'Connor was the key... in the five to four decision she was the fifth.

JAN CRAWFORD GREENBURG: Right.

GWEN IFILL: I thought it was also interesting that she's the only member of the court who is ever an elected official.

JAN CRAWFORD GREENBURG: That's right. Back in Arizona she was in the state senate. So again as you said, we see Justice O'Connor siding with the more liberal Justices who were in the majority today in upholding this law, and that made the difference. Now, opponents say this is not necessarily a liberal decision. And they know that it could have some ironic results, that it may actually help -- these new rules may actually help the Republicans since they're in power and they say it will protect, help protect incumbents.

GWEN IFILL: Was there any drama in the courtroom when a big decision like this comes down?

JAN CRAWFORD GREENBURG: Sure. We had some very interesting arguments this morning, including another Miranda case, a redistricting case. So everyone was expecting to have some very interesting arguments. The court took its seats on the bench and the Chief Justice Rehnquist said that he would announce, summarize the opinion in this campaign finance reform case. Of course everyone sits up. He goes into about an eight- minute summary of this extraordinarily complex case -- this massive law. It becomes very clear very quickly that it was quite a victory for supporters of the law. And he went through it pretty quickly and then leaned back and said now I have to pause for a breath.

GWEN IFILL: He actually said that?

JAN CRAWFORD GREENBURG: Yeah.

GWEN IFILL: Okay. Well, thanks for taking us inside the courtroom again. Thank you, Jan.

JAN CRAWFORD GREENBURG: You're welcome.

SERIES - CAMPAIGN SNAPSHOT

JIM LEHRER: Now, a campaign snapshot. It's from last night's Democratic presidential debate in Durham, New Hampshire, which was sponsored by ABC's "Nightline." The major focus was on Al Gore's endorsement of Howard Dean. Ted Koppel moderated. Here are some excerpts.

TED KOPPEL: This has been an extraordinary day for governor dean. As we all know he got the endorsement of former Vice President Al Gore. Things are going very well for him in the polls. Things are going very well for him in terms of raising money so I would like all of you up here, including you Governor Dean, to raise your hand if you believe that Governor Dean can beat George W. Bush. ( Laughter and applause ) Don't look at me. Look at these eight other folks.

HOWARD DEAN: You kind of put them on the spot, though.

TED KOPPEL: Yes, that's the idea. Tell me, Senator Kerry, why didn't you raise your hand? ( Laughter )

SEN. JOHN KERRY: For the very simple reason, Ted, that I believe in my candidacy and I believe in my vision for the country, and because every indication is that I can beat George Bush. And that's been shown in some of the national polls. I was sort of surprised today, actually, by the endorsement, because I thought that Joe Lieberman had shown such extraordinary loyalty in delaying his own campaign that it surprised me. (Applause)

TED KOPPEL: Senator Lieberman, you got a bit of a shock of the solar plexus today. You had to be surprised by it. You have to be a little disappointed by it. The fact of the matter is, someone has got to win the primaries and the caucuses, and ultimately the Democratic nomination, before they can hope to win the presidency against George Bush. Have your chances received a bad shock today?

SEN. JOSEPH LIEBERMAN: Ted, I think in some unpredicted, unexpected way my chances have actually increased today. I can tell you that our phones have been ringing off the hook at the campaign headquarters. I've been stopped in the airports; people angry about what happened. I'll tell you why I didn't raise my hand in response to that question. This campaign for the Democratic nomination is fundamentally a referendum within our party about whether we're going to build on the Clinton transformation in our party in 1992 that reassured people we were strong on defense, we were fiscally responsible, we cared about values, we were interested in cutting taxes for the middle class and working with business to create jobs. Howard Dean is-- and now Al Gore, I guess, are on the wrong side of each of those issues.

TED KOPPEL: Reverend Sharpton, you were raising your hand before, in response to which part of what happened?

AL SHARPTON: Al Gore went to New York today. He should have noticed Tammany Hall is not there anymore. Bossism is not in this party. To talk about people ought not run and that people ought to get out of this race is bossism that belongs in the other party. And we're not going to have any big name come in now, and tell us the field should be limited and we can't be heard.

TED KOPPEL: Senator Edwards, what do you think?

SEN. JOHN EDWARDS: Well, I have this kind of curious notion that I think actually most voters in America make their own decision about who they believe should be the president of the United States. I don't think you can tell them what to do.

TED KOPPEL: General Clark, you're relatively new to the process. It is rumored, however, that you are a favored candidate by the Clinton family. If Mrs. Clinton, Senator Clinton, or former president Clinton were to offer you his endorsement, would you take it?

WESLEY CLARK: Well, you know, I really have never even thought about that.

TED KOPPEL: Oh, sure you have. ( Laughter )

WESLEY CLARK: No, I haven't. And so, to me, this is about going out to the American people, listening to them, talking about the ideas. This is a very important election coming up, and it's not going to be decided by endorsements.

TED KOPPEL: I get a little bit of a sense of sour grapes here. If anyone else on the stage had gotten Al Gore's endorsement, he would have been happy to have it. What do you think?

REP. DENNIS KUCINICH: I can't say I was really counting on it. (Laughing) But let me say, Ted, let me say, let me say that the... that some of the best talent in American politics is on this stage right now. (Applause ) And with all due respect to you, Ted Koppel, who I've admired over the years greatly...

TED KOPPEL: There's a zinger coming now, isn't there?

REP. DENNIS KUCINICH: Yes. ( Laughter ) the... to begin this kind of a forum with a question about an endorsement, no matter by who, I think actually trivializes the issues that are before us. (Cheers and applause)

TED KOPPEL: Governor Dean, what is it that makes me think that while there may be eight people up here who aren't crazy about that endorsement and who think it trivializes politics, that you probably don't.

HOWARD DEAN: Let me just say a couple of things. First of all, I think John Edwards was right. The people will decide, not Al Gore or anybody else. Secondly, I'm going to give an invitation, which I have not yet given but I'm going to do it now. If you guys are upset about Al Gore's endorsement, you attack me, don't attack Al Gore. Al Gore worked too hard in 2000 to lose that election when he really didn't lose the election. He got 500,000 votes more than George Bush, and I don't think he deserves to be attacked by anybody up here. He's not a boss... (applause) ...he's a fundamentally decent human being. And I think Al Gore deserves credit for being the kind of moral leader in this country that we had lost since the last election.

JIM LEHRER: The next Democratic presidential debate is scheduled for January 4 in Iowa.

Still to come on the NewsHour tonight: Rebuilding Iraq; musical Iraq; and Robert Rubin.

FOCUS - REBULDING IRAQ

JIM LEHRER: Now, who should, and who should not, get Iraqi reconstruction contracts. Ray Suarez has the story.

RAY SUAREZ: In a memo released by the Pentagon yesterday, U.S. officials said $18.6 billion in U.S.-funded contracts to rebuild Iraq's infrastructure, everything from phone service to hospitals to the water supply, are available only to companies from the U.S., Iraq, coalition partners, and force contributing nations. The memo from Deputy Defense Secretary Paul Wolfowitz said the coalition members-only policy is in the "essential security interests of the U.S." countries whose firms are excluded from the Iraq work took strong exception. Canada's prime minister-elect Paul Martin:

PAUL MARTIN: I find it really very difficult to fathom. First of all, Canada has put in close to $300 million in terms of the reconstruction of Iraq. I understand the importance of these kinds of contracts, but this shouldn't be just about who gets contracts, who gets business. It ought to be what is the best thing for the people of Iraq, and how are we going to participate in that.

RAY SUAREZ: The German government called the limits unacceptable. Foreign Minister Joschka Fischer:

JOSCHKA FISCHER (Translated ): We noted the reports today with astonishment, and we will be speaking about it with the American side.

RAY SUAREZ: And European Union officials said they'll check out whether the restrictions violate world trade rules. White House spokesman Scott McClellan answered administration critics.

SCOTT McCLELLAN: If countries decide they want to participate in the efforts and join the efforts of the coalition forces in Iraq, then circumstances can change. And we would be glad to discuss those matters with countries.

RAY SUAREZ: McClellan said firms from excluded countries can participate as U.S. subcontractors, and can bid on non-U.S. contracts in Iraq. As for the American contracts, they were to be open for bids today. But Pentagon officials postponed starting the process by a week, citing high-level policy discussions.

For more on all this, we get two views. Congressman Henry Waxman is a Democrat of California. He's the ranking member of the Government Reform Committee. And James Schlesinger was secretary of defense and director of central intelligence during the Nixon and Ford administrations. He's a member of the Defense Policy Board, a group that advises the secretary of defense.

Representative Waxman, what do you make of the word that's come from the assistant secretary of defense?

REP. HENRY WAXMAN: I think this policy is a mistake for a number of reasons. I think we want to reach out and have international cooperation, and this policy excluding a number of countries is having a counter effect to that as you could see by the introductory piece. Secondly, we want as taxpayers to get our money's worth. The whole idea of competition between competing companies to get the best value shouldn't be limited by excluding very capable companies that can do the job. And then thirdly the list is so arbitrary. Turkey can participate even though they refuse to let us use their air bases, but Germany where they did allow us to use their air bases can't participate. They all can participate as subcontractors so it just seems to me a very strange idea and counterproductive to the idea of getting more international cooperation in rebuilding Iraq.

RAY SUAREZ: Mr. Secretary, what do you make of the policy?

JAMES SCHLESINGER: I think it's a perfectly reasonable policy. In the first place this is all taxpayer money. We are in effect rewarding those who joined the coalition or those who have participated subsequently as donors. Others who have obstructed our policies and have rebuffed Colin Powell when he requested that they join in the donor campaign are going to be cut out. That seems to me to be perfectly reasonable.

RAY SUAREZ: What about Representative Waxman's point that you're not necessarily going for the most competent bidder or the lowest bidder but one that's on a pre-screened national representative list?

JAMES SCHLESINGER: I think with 63 countries on the list that can compete and perhaps more will be added later that we will have considerable competition.

RAY SUAREZ: Congressman Waxman, that's not an unheard of principle in politics, is it? Reward

your friends and help in effect those countries that helped you along the way --

REP. HENRY WAXMAN: I think the people we most need to reward are the American people who pay taxes. The idea that we would allow their tax paid dollars to be wasted is offensive to me. We have Halliburton right now in Iraq. It's presumably an American corporation. It does have subsidiaries in the Cayman Islands. They even had a subsidiary that was dealing with Saddam Hussein when he was in power in Iran and Libya. Yet they, as your news story indicated in the opening of the show, are being charged with over requiring the American taxpayers to pay for gasoline that's being brought into Iraq. For example, they're charging $2.64 a gallon to bring gasoline in from Kuwait to Iraq while the Iraq-owned oil company can do the same thing for less than a dollar. And it's being sold to the people in Iraq for five cents. Well, how do Americans feel when they go to the pump and pay $1.75-$1.80 a gallon finding out that they're paying $2.64, which is almost two or three times what should be required to purchase the gasoline? It seems to me there's a gouging going on.

RAY SUAREZ: Congressman, let me ask you....

REP. HENRY WAXMAN: Yes.

RAY SUAREZ: because you have been someone who has been consistently raising the issue of single source and no-bid contracts mentioning specifically Halliburton and other large American companies, doesn't this move the emphasis away from them by opening the bidding up in 63 different countries? Doesn't it... the intention to quickly announce and award these contracts and move them out of the single bid, single source area satisfy some of the things that you've been demanding all along?

REP. HENRY WAXMAN: Well, I hope they'll have open bids. But the idea of an open bid is a competition between companies that can do the job. And to say that a company that's located in Canada can't compete even though they're our NAFTA partner but in Egypt they can, even though their autocratic government is so hostile to democracy in the Middle East doesn't make a lot of sense to me. If we're going to award contracts, it ought to be based on who can do the job. I certainly want the American government to make sure that they're watching out for abuse and waste in these contracts. I don't think they've done that in the case of Halliburton. So I don't have a lot of confidence they'll do it in other... in the 18.7 billion dollars they're about to award in new contracts for Iraq.

RAY SUAREZ: Mr. Secretary, what about some of the points that Congressman Waxman makes about multiply nationally base companies that it's hard to tell what country they're from, that the single mission of protecting the American taxpayer seems to have gotten secondary role here?

JAMES SCHLESINGER: Well, I think that there is no question, as the congressman has indicated, that Halliburton is an American company. It may have off-shore subsidiaries but no one identifies it as a French company. One can say that we have moved to the second phase. When we went in to Iraq, there was a requirement to respond to electric power shortages, plants down, the oil facilities had to be brought back and so we had to operate quickly without an extended competition. Halliburton got one contract. Bechtel got another contract from the Department of State. We've now moved into phase 2. Just as you indicated earlier that we are going to move away from single source and we now have competition -- with 63 countries in there, including many of the European countries-- England, Spain, Italy, Denmark, Norway, Turkey that was mentioned-- these countries are quite capable and they will be competing.

RAY SUAREZ: But what about some of the gray areas? The Germans are already on the ground in Iraq helping rebuild the water system. The French helped out in Afghanistan but chose not to in Iraq. Congressman Waxman points out that there are some countries on the list that wouldn't pass the democracy sniff test necessarily.

JAMES SCHLESINGER: Well, that is in contradiction to his desire to get all these countries in there competing, whether they are democracies or not. If they have the lowest price according to the congressman's logic, they should be welcome to come in to Iraq. Now, in the case of France or of Germany, what happened was that they obstructed American policy, went around the world to obstruct American policy and then subsequently when we called upon other countries to donate forces, donate money, they did not show up. It seems to me that to reward one's friends is a perfectly reasonable action to take particularly when it's being done with American money.

RAY SUAREZ: Did you do anything like that when you were secretary of defense?

JAMES SCHLESINGER: I occasionally would crack down on a particular country. It was during the OPEC run-up of OPEC prices, and I beganto charge much more for research and development activities to countries in the Middle East that had participated in running up the prices.

RAY SUAREZ: Congressman Waxman, what about that idea of rewarding your friends?

REP. HENRY WAXMAN: It seems this administration does a good job of rewarding its friends. Halliburton, for example, is a very close friend to this administration. When I look at the failure of the administration, I've been asking them for six months for an explanation of why we're getting overcharged almost three times more for gasoline, why we're spending hundreds of millions of dollars that can't be explained, this administration refuses to answer. It just seems to me at best it's a case of mismanagement. But it could well be a case of government-sanctioned profiteering. If that's what we're doing for our local friends in America, I don't like it. I don't think the taxpayers are well served by it. I would point out in terms of inconsistencies, Mr. Schlesinger is one of the co-chairs of a committee looking at post Iraq reconstruction which has, as I understand it, come out strongly for trying to bring in more international cooperation. When we tell countries they can't participate you know what their reaction is going to be. It's what we saw today when Russia said they're not going to forgive their debt that Iraq owes them. Other countries are going to make it more difficult for us to succeed in Iraq. I think we made a mistake not getting more countries with us in the war effort to start with. We've got to correct that error and reach out and involve more nations now in getting the best job done for the people of Iraq and for our taxpayers.

RAY SUAREZ: Will this encourage rather than discourage as the congressman suggests international participation in rebuilding Iraq?

JAMES SCHLESINGER: I doubt it will have very much effect. We've been living with this fantasy that there's going to be this flow of international cooperation. What we see here is that certain countries would like to get push up to the trough, put in by the American taxpayer. They have not been particularly generous in supporting the reconstruction after an earlier period in which they attempted to obstruct the actions of the U.S. Government and in effect save Saddam Hussein.

RAY SUAREZ: Mr. Secretary, Mr. Congressman, thank you both.

FOCUS - MUSICAL MISSION

JIM LEHRER: Next-- and speaking of Iraq-- a musical event mixing high culture and international politics. Arts correspondent Jeffrey Brown reports. ( Music playing )

JEFFREY BROWN: Reporter: Much about last night's concert was familiar: A Beethoven overture, the formal setting in Washington's Kennedy Center. But much was far from usual. Nearly 60 members of the Iraqi National Symphony Orchestra, alongside American musicians of the National Symphony Orchestra, in a performance of western and Iraqi music; in the audience, President Bush and members of his foreign policy team. The event was sponsored by the Kennedy Center and the U.S. State Department, and billed as a cultural exchange-- an attempt at literal harmony out of the confusion and sometimes violent aftermath of the Iraq war. Conductor Leonard Slatkin led the combined orchestras in the Beethoven.

LEONARD SLATKIN: I didn't even know there was a symphony in Baghdad. It's quite a gesture. And I think it says a lot about the power of music to communicate, especially in a particular time of trouble and turmoil.

JEFFREY BROWN: Reporter: Hisham Sharaf is a clarinetist and director of the Iraqi orchestra.

HISHAM SHARAF: This concertis important for me and for the orchestra to tell everybody outside Iraq there is culture in Iraq, there is good musicians in Iraq, and about the culture exchange here.

JEFFREY BROWN: The Iraqi orchestra, shown here in Baghdad last month, was founded in 1959. It's seen good times, including some international touring, and many hard times-- years without regular performances, through several wars, official neglect, an international embargo that made it difficult to get new instruments or musical scores. Saddam Hussein was apparently not a great lover of classical music. At a birthday party for him in the ''90s, members of the orchestra were asked to play a Frank Sinatra tune, "My Way." ( Music playing ) always, says Hisham Sharaf, the orchestra was part-time; the musicians poorly paid.

HISHAM SHARAF: It's difficult for them. They work many different job and they are tired when they come to rehearsal in the orchestra.

JEFFREY BROWN: It was always hard to be a musician because you had to work several jobs?

HISHAM SHARAF: Yes.

JEFFREY BROWN: Do you have another job?

HISHAM SHARAF: I have three jobs, or four.

JEFFREY BROWN: The hardship sometimes goes further than that. On the very day that American soldiers pulled down the statue of Saddam in Baghdad, shrapnel from a tank blast destroyed part of Sharaf's house, injuring him and his mother. Both are now fine. Amid the looting that took place in Baghdad in April, the theater where the orchestra often performed was set ablaze, the school of music and ballet where many of the musicians teach was ransacked. ( Music playing ) In June, the orchestra reassembled for its first postwar concert. When they played "My Home," an unofficial national anthem before Saddam's reign, some in the audience wept. Then in September, Kennedy Center president Michael Kaiser went to Baghdad as part of a cultural mission with the State Department.

MICHAEL KAISER: When I heard a group of chamber musicians drawn from the symphony, we had two machine gunners ten feet away from us as we heard this music. It's beautiful music. And it really... the juxtaposition between the fear and the danger and the beautiful music was very poignant.

JEFFREY BROWN: Kaiser says the idea for a formal relationship with the Iraqi musicians was his.

MICHAEL KAISER: Every person we talked to in Iraq, every person-- and I met with musicians, artists, visual artists, and dancers, and theater artists, and I met with university presidents-- everyone said this country has to heal from decades of pain. And in my experience, the arts help people heal in the most healthy of ways.

SPOKESMAN: Use the whole bow, don't be afraid. You know, you have all of that, use it.

JEFFREY BROWN: Gathered for rehearsals in Washington, Iraqi and American musicians studied their parts and looked over each other's instruments. Iraqi conductor Mohammed Amin Ezzat rehearsed the Americans with a group of Kurdish musicians playing traditional instruments. The Iraqis were clearly excited to meet Yo-Yo Ma, the star soloist of the concert. And ma was equally excited. He talked to us just after the first rehearsal.

YO-YO MA: I had a fascinating hour just now. It was work as usual. You walk into a room and all these people, 60 I think, members of the Iraqi national symphony ready to work. Within five minutes, I think my stand partners, two cellists, were writing things in my score saying, "well, you know, this is an up bow, this is down bow," just sharing what we need to know and helping me out. (Music playing)

JEFFREY BROWN: But even as the rehearsals went on, a political controversy swirled. When the concert was first announced, some commentators on al Jazeera Television and in the Iraq press criticized the orchestra for playing into the hands of the Americans, presenting an appearance of harmony and normalcy when the situation in Iraq is anything but. Some in the U.S. agree. Andy Shallal is a Washington- area businessman who opposed the U.S. invasion of Iraq. We talked yesterday morning.

ANDY SHALLAL: I look at it from the perspective of an Iraqi- American, how I see it, and I feel that the orchestra is being used to advance this administration's agenda.

JEFFREY BROWN: Used how, exactly?

ANDY SHALLAI: You have the Iraqi symphony playing at the Kennedy Center, a very posh western type of environment. You've got the president sitting in the box overseeing his subjects. It belies what the reality is of what's outside of there, that 41 soldiers were injured today in a car bomb, the fact that people are having to wait two miles in line for gas in the world's second-largest oil reserve, that fact that people are unemployed, the fact that there is no security at all on the ground. It's a great photo-op. But I think it's bound to come back to haunt the president this time.

JEFFREY BROWN: Introducing last night's concert, Secretary of State Powell put the political symbolism front and center.

COLIN POWELL: President and Mrs. Bush, ladies and gentlemen, what you're about to hear is the music of hope-- the sweet, sweet sound of freedom.

JEFFREY BROWN: For their part, the musicians involved, Iraqi and American, tried to steer clear of politics and stress the power of the art itself.

HISHAM SHARAF: I think the Iraqi people like this concert, most of them they like this concert because everyone they think that we are -- see the good face for Iraq -- for culture of Iraq.

LEONARD SLATKIN: We're not foolish. We know that one concert doesn't change the world. All we can do is bring to the attention the joy, the power, the beauty of music and what it can mean for people's souls. ( Music playing )

JEFFREY BROWN: In recent days, Steinway and Yamaha have announced they will donate new instruments to the Iraqi musicians. And an orchestra association is sending 500 new musical scores. No matter the larger politics around last night's concert, the Iraqi musicians plan to go on making their music.

CONVERSATION

JIM LEHRER: Finally tonight, a conversation with an author of a new book, and to our economics correspondent Paul Solman of WGBH-Boston.

PAUL SOLMAN: Of all the members of President Clinton's cabinet, only one had a set of policies named after him: Treasury Secretary Robert Rubin, who came to Washington from Wall Street and presided over the largest peacetime economic expansion in U.S. history.

ROBERT RUBIN: We are today signing four agreements that will serve American economic interests.

PAUL SOLMAN: A long-time investment banker, he co-ran Goldman Sachs, Rubin is known for his handling of the financial crises of the '90s, his controversial borrowing from government trust funds to keep the United States from default, and his constant efforts to lower government deficits and balance the budget-- an economic philosophy that became known as "Rubinomics." Now back in the private sector as one of the top executives running the giant financial services firm Citigroup, Rubin has spent much of the past three years on a book with journalist Jacob Weisberg called "In an Uncertain World." The book documents Rubin's years in Washington, as one might expect from a government memoir, but its major intellectual theme is rather unusual: His existential yet economics-based approach to decision-making that he calls "probabilistic" thinking.

ROBERT RUBIN: It is exactly what you said. It is always a question of the probabilities, and if it does happen, what are the benefits? If it doesn't happen, what are the costs? And it's also a question of trade- offs, because very often-- although people don't like to recognize this, particularly politicians-- in order to gain one good you have to give up another good and then, of course, the risks. It's also recognition that there are no absolutes. There are no certainties. And I think, unfortunately, if you approach a very complicated issue-- whether running a risk arbitrage department or in a financial crisis in Mexico or perhaps in today's geopolitical issues-- with the concept that there are certain answers, I think it leads you not to good places.

PAUL SOLMAN: So what's an example of probabilistic thinking from your own career? You write about the Mexico crisis, for example.

ROBERT RUBIN: I was sworn in in the Oval Office and right after... it was in the evening-- and right after I was sworn in, I said Mr. President, Larry Summers-- who was then my deputy, now president of Harvard-- Larry Summers and I need to speak to you about a subject that the two of us and Alan Greenspan have been spending a lot of time on. There is a crisis in Mexico. That crisis is likely to have very substantial adverse effects on the United States. We strongly believe that the sensible thing to do is to intervene and provide very substantial U.S. resources.

PAUL SOLMAN: This was the famous so-called bailout. I know you don't like the term.

ROBERT RUBIN: Yeah, bailout wouldn't be my way of characterizing it. I think initially about $20 billion or thereabouts. And that's where it wound up from the United States. Well, the IMF put up more. And then we said, "but Mr. President, we cannot guarantee you it will work. And if it doesn't work, there are a lot of reasons to think that the political consequences for you could be very serious." And one of the political consultants said he thought it could cost the president his job. Well, there's real probabilistic decision-making because you... what are the odds on it working? What are the odds of terrible things happening if you don't get involved? All decisions, in a sense, were bad and the question was which is the least bad decision? Interestingly, President Clinton very quickly said, "Look, the United States must do what makes the most sense for our economy." And it went much beyond our economy, national security and much else -

PAUL SOLMAN: -- the flood of immigrants from Mexico if Mexico collapses.

ROBERT RUBIN: Oh yeah, illegal immigration, drugs, corruption that could come with all of that and the possible other consequences and he made the decision to go ahead.

PAUL SOLMAN: How did probabilistic thinking get you from wall street to politics?

ROBERT RUBIN: Oh, well, I had wanted to be in politics about as far back as I can remember. It just fascinates me. And it seemed to me that....

PAUL SOLMAN: Power fascinates you?

ROBERT RUBIN: No, not power. No, no. I think it's something different. And I didn't express this this way in the book because I just thought it sounded too, oh, I don't know, too heavy or something, but it's basically a sense that if you think about the totality of time and space, we are very small, individually.

PAUL SOLMAN: Yeah, it's a really... bummer, isn't it?

ROBERT RUBIN: Well, it is and isn't. I mean, it sort of... yes, it certainly has that aspect about it, but it also means that if you don't do something, if something goes wrong or you go... you do the Mexican financial support program and it fails or you run into great trouble because you're trying to do a debt-ceiling issue and that fails... yeah, on the one hand you take it very seriously, but on the other hand, you recognize that 100,000 years from now nobody is going to care. Now, that train of thought has led a lot of people unfortunately into not being engaged with life. I feel that you can have that kind of perspective and also be enormously and intensely committed to what you're doing. And I, somehow or another, combine the both.

PAUL SOLMAN: And that's what the philosophers who have called themselves existentialists believed. There might not be any meaning out there but that just meant that you had to give life meaning.

ROBERT RUBIN: I think that is the fullness of existentialism. By the way, that same mind set was shared by, I think, quite a few other people at treasury.

PAUL SOLMAN: There was a cabal of existentialists?

ROBERT RUBIN: God help us, no, there was not a cabal of existentialists, although I'm sure there were some people in Congress who thought maybe that was the case. But, I think what it was, was a group of people who created some sense at least of a recognition of... that none of us, in the final analysis, had any reason to be caught up with ourselves and even a little bit of a sense of irony about life at the same time that we were enormously committed to what we were doing.

PAUL SOLMAN: I remember I interviewed you right after you became secretary of treasury and I came away thinking that, among other things, you were kind of thrilled by being secretary of treasury. I remember that you gave a number of us dollar bills...

ROBERT RUBIN: Signed dollars?

PAUL SOLMAN: Yeah, signed dollars, because your name was now on the dollar bill. You know.

ROBERT RUBIN: Yeah, I gave away a lot of sign dollars over the years but I never... it's funny, Paul. Every once in a while I would think to myself I'm secretary of the treasury, but that was a fleeting feeling. The basic feeling was that the pressures of the... a, what we need to do and, b, just all the problems of getting it done and, with all due respect, the media and everything else that surrounded this to an extent. So I never felt the feeling or rarely felt the feeling of, sort of, headiness that could come with those jobs.

PAUL SOLMAN: You write that you thought the term "voodoo economics" used by current President Bush's father when he was campaigning against Ronald Reagan in 1980 was an apt phrase.

ROBERT RUBIN: Correct. I don't think there is any serious evidence that tax cuts have a significant impact on choices between work and leisure and the like and therefore have that supply side effect that sometimes is claimed for it.

PAUL SOLMAN: In other words, if my taxes get cut, I'm going to work harder, therefore I'll produce more. Therefore, I'll pay more in taxes, and therefore, there won't be a deficit.

ROBERT RUBIN: We went through the whole 1980s on that theory and the federal debt, roughly speaking, quadrupled from 1980 to 1992.

PAUL SOLMAN: So when you talk about the '90s, when you were in the administration, as a period of a virtuous circle, where lower deficits led to more confidence, lower interest rates and so forth, you were concerned about this famous vicious circle, I take it, of higher interest rates, lower confidence and so forth?

ROBERT RUBIN: Yes, I'm very concerned about it, Paul. I think the probability that the course that we are now on, the fiscal course that we are now on is going to lead to serious trouble is exceedingly high.

PAUL SOLMAN: 70 percent? 80 percent?

ROBERT RUBIN: No, I think it's probably materially higher than that unless it's repaired, but the trouble is the repair of it is going to be very difficult. Alan Greenspan said about a week or two ago that our future depended on fixing it. The best evidence on any of this that's around is what happened in 1993, because we put in place a powerful deficit reduction program. It had income tax increases on top the top 1.2 percent of Americans, a small gas tax and the supply side critics said that this would lead to high unemployment, recession even worse. And instead what we had was the longest expansion, economic expansion in American history, the creation of over 20 million new private sector jobs, high growth, low inflation, low interest rates, incomes increase at all levels. It was a remarkable period of economic conditions.

PAUL SOLMAN: Were you, do you think, as an administration, fairly lucky, as well? I mean, there was a moment in history, high tech, people enthusiastic, consumer confidence building on itself.

ROBERT RUBIN: Paul, I don't think that's right. When you say that people got enthusiastic and the rest, they weren't enthusiastic in the end of 1992. If you look at consumer confidence, it was not high. There was a general feeling in the business community we were in a morass. And I think that that came about, in some fair measure, because the deficit had come to become a symbol of something much larger than itself, an inability to manage our economic affairs. And when there was a realization that the political system was finally going to put in place fiscal discipline and reestablish fiscal discipline I think that had a very substantial effect on business confidence and on consumer confidence.

PAUL SOLMAN: What would you do differently now as treasury secretary if you could go back in time? Anything?

ROBERT RUBIN: At one point Madeleine Albright came to me and she said-- this is the beginning of the second term-- she said, "you and I, the secretary of the state and the secretary of treasury, should go around the country and try to explain to the American people how much our self-interest is affected by what happens abroad and how important it is that we support trade and foreign assistance and crisis response, this whole range of issues." I thought it was a terrific idea. I never followed up on it. We never did it. How much difference it would have made, I don't know, but I wish we would have done it. A personal regret I have is that the six-and-a-half years I spent there-- two White House, four- and-a-half treasury-- were a remarkable experience in just a whole multitude of ways -- to be with a group of extraordinarily talented people and the president of the United States working through these very complicated issues that affect not only our country but the rest of the world, there should be a feeling of satisfaction -- there should be a feeling of fulfillment. There should be a feeling of really engaging with all of your powers, such as they may be, on issues that matter. And because I was so caught up in what I was doing, and so consumed, in a sense, with trying to meet the challenge of what I was doing, I don't think I had that very often. I think it's too bad.

PAUL SOLMAN: You I didn't savor it enough.

ROBERT RUBIN: I didn't savor it enough; precisely. That's exactly the point.

PAUL SOLMAN: Robert Rubin, thanks very much.

ROBERT RUBIN: Well, thank you. It's been very good to be with you.

RECAP

JIM LEHRER: Again, the major developments of this day: The U.S. Supreme Court upheld the key parts of the new campaign finance law, favoring a ban on soft-money donations to political parties. The U.S. drew sharp criticism overseas over a new policy in Iraq. It says companies from nations that oppose the war are barred from bidding on post war contracts. We'll see you online, and again here tomorrow evening. I'm Jim Lehrer. Thank you and good night.