The NewsHour with Jim Lehrer

GWEN IFILL: Good evening, I'm Gwen Ifill. Jim Lehrer is off this week. On the NewsHour tonight, Margaret Warner takes a look at Israel's troops pullout from Lebanon; Kwame Holman reports on today's China trade vote in the House; we examine potential fallout from the latest mega-merger; and Terence Smith takes us to a local news station that's choosing facts over fluff. It all follows our summary of the news this Wednesday.

NEWS SUMMARY

GWEN IFILL: The House today approved the China trade bill, 237-197. Most Republicans voted for it, most Democrats against. The legislation would extend permanent normal trade benefits to China, and end the annual approval process. A similar bill is expected to pass in the Senate next month. We'll have more on the debate later in the program tonight. Israel completed its pullout from Southern Lebanon today. The last Israeli troops and tanks rolled home at dawn, ending a 22-year occupation. As they left, Hezbollah guerrillas moved in, and tensions rose along the border. In Washington, a State Department spokesman told Lebanon to get control of the region quickly. We'll have more on the Israeli pullout right after the News Summary. A deal making the world's biggest airline even bigger was announced today. The parent company of United Airlines said it would buy U.S. Airways for $4.3 billion in cash. The chairmen of the two carriers appeared at a news conference in New York.

JAMES GOODWIN, Chairman & CEO, United Airlines: If you link United's extensive East-West system with U.S. Airway's comprehensive North-South routes on the East Coast, we believe we create the first truly efficient nationwide network. The transaction will stimulate commerce, jobs and economic development across the United States.

GWEN IFILL: The deal is subject to Justice Department review. But to satisfy regulators, United plans to sell most of its Washington, D.C. operation to Robert L. Johnson, the head of black entertainment television. He will form the nation's only minority-owned airline, D.C. Air. We'll have more on this story later in the program tonight. A federal judge has ordered the Justice Department to submit an alternative plan for breaking up Microsoft. At a hearing today, U.S. District Judge Thomas Penfield Jackson said he wants the revised plan by Friday. It could involve splitting the company into three parts instead of two. Last month, the judge found Microsoft guilty of antitrust violations. In South Carolina last night, Governor Jim Hodges signed a bill to remove the confederate flag from atop the state capitol. Beginning July 1, the flag, mounted on a 30-foot pole, and lit at night, will fly over a confederate war memorial on the capitol grounds instead. The governor spoke in a statewide televised address.

GOV. JIM HODGES, (D) South Carolina: For the last few months, the eyes of the nation have been on South Carolina. Our state has been consumed by this debate. Today, we bring this debate to an honorable end. Today, the descendants of slaves and the descendants of confederate soldiers join together in the spirit of mutual respect.

GWEN IFILL: But the NAACP said it opposed the move. It vowed to expand its call for a tourism boycott. Prosecutors in Maryland today dropped wiretapping charges against Linda Tripp. They said a judge's decision to limit Monica Lewinsky's testimony made it impossible to continue. Tripp's tape-recorded conversations with Lewinsky helped spark the impeachment case against President Clinton. Under Maryland law, it's illegal to record conversations without consent. That's it for the News Summary tonight. Now it's on to Israel's pullout from Lebanon; the end of the China trade debate; the big airline merger; and facts over fluff in Chicago.

FOCUS - FINAL PULLOUT

GWEN IFILL: Our coverage of the Lebanon pullout begins with two reports from the Israel/Lebanon border. The reporter is Lindsey Hilsum of Independent Television News.

LINDSEY HILSUM: A withdrawal, they say, not a retreat. Israel shelled southern Lebanon today, providing covering fire to their troops and Lebanese allies. They attacked Hezbollah fighters carrying the black flag, who were hounding Israeli forces as they abandoned the lands they've controlled for 22 years. Most of the troops pulled out overnight. Young Israelis don't want to risk their lives in a never-ending war which started before they were born. The withdrawal was one of Prime Minister's Barak's election pledges. The plan now is to defend Northern Israeli villages, without sending conscripts across the border.

SPOKESMAN: Our mission is to protect Israel, and if we will do that from our territory, well, it's the same.

CROWD SHOUTING: Hezbollah! Hezbollah!

LINDSEY HILSUM: Inside south Lebanon, it was a day of joy and celebration for Muslims. Supporters of the Shiite Hezbollah militia spearheaded the takeover of Beit Jbail, the biggest Shiite settlement in the Israeli-occupied zone. They moved into at least 20 other villages. (Speaking Arabic)

MAN (Translated): This is a lovely day, a day of rejoicing.

WOMAN (Translated): This is the most beautiful day of our lives. We couldn't believe it when we were told we could cross the barricades.

LINDSEY HILSUM: Hezbollah swept through the Muslim villages in the west of the occupied zone today, the key center being Beit Jbail. There were reports of fighting around Christian villages near Marjayoun in the East. There may be a new flashpoint in the disputed area of the Shebaa farms. Hezbollah says it's part of Lebanon, and they'll continue fighting if Israel doesn't leave it. But Israel says it's part of Syria, and they won't withdraw yet. They're triumphant today, but Hezbollah wants more: The Shebaa farms and the return of their leader, Sheikh Obeid, who's held by the Israelis.

SHEIK HASSAN NASRALLAH, Hezbollah Leader (Translated): We will not consider what is happening now as a full withdrawal, unless it includes a pullout from Shebaa and the release of Sheikh Abed Al-Kareem Obeid. If this doesn't happen, Hezbollah will consider that a full withdrawal has not taken place, and that we will have to free our land and liberate our people.

LINDSEY HILSUM:Hezbollah and Lebanese government forces took great delight in arresting members of the south Lebanon army, Israel's proxy force. These are the people, mainly Christians, who fought on Israel's behalf and earned the hatred of other Lebanese. They may now be tried for treason. They may be killed. Streams of SLA fighters, their families, and other Christians fled to the Israeli border at Metulla today. (Sobbing) This woman's family was left behind. They know they're seen as traitors, and they're terrified of what will happen if they're forced to stay in Lebanon. Some were taken to Galilee, where Israel says it will look after them. The man who as defense minister took Israel into Lebanon more than two decades ago listened to their bitterness.

ARIEL SHARON, Israeli Opposition Leader: They said, "Israel betrayed us." Believe me, I could not look into their eyes, and I couldn't say, after being here, that I couldn't blame the Israel government, in front of them. But this thing is such a tragedy for these people that were acting and fighting together with us for the last 25 years.

LINDSEY HILSUM: Just after dawn, the last Israeli tank drew out of Lebanon. The talk is of chapters closing, eras ending. But Syria controls Lebanon. And Israel doesn't know what Syria will do now. (Applause) Prime Minister Barak today visited communities in northern Israel. He had hoped that the troop withdrawal from Lebanon would be part of a comprehensive peace settlement with Syria, but talks in Damascus have stalled. They're safe, nonetheless. He has to convince Israelis that they're safe, nonetheless. (Speaking Hebrew)

PRIME MINISTER EHUD BARAK, Israel (translated): From the day after the withdrawal from Lebanon, the government is obliged to promise two things: First, that the Israeli defense forces will be fully deployed up on the border; and second, that anyone who dares to try and hurt us will get what he deserves, with all our might. (Applause)

LINDSEY HILSUM: Israel still occupies the Golan Heights. It's agreed that the land will be handed back to Syria, but the two sides have failed to thrash out the details. Up on the border, Israelis and Lebanese Hezbollah, face to face for the first time.

WOMAN: (Shouting) I am a citizen and I believe in peace.

MAN: (Shouting) You, you can't do anything.

WOMAN: I can. I believe I can.

LINDSEY HILSUM: Old enemies, uneasy neighbors. A few hours ago, people in the Lebanese crowd are reported to have thrown Molotov cocktails over the border, setting fires to cars on the Israeli side. Prime minister Barak said today after the cabinet meeting that any firing on Israeli citizens or soldiers would be regarded as an act of war. These are dangerous days.

GWEN IFILL: Margaret Warner takes it from there.

MARGARET WARNER: For perspective on the Israeli pullout and what it means, we turn to Nitzan Horowitz, Washington bureau chief for the Israeli newspaper "Ha'aretz;" Lebanese-born Mouafac Harb, Washington bureau chief for the London-based Arabic newspaper "Al-Hayat." Robert Satloff, executive director of the Washington Institute for Near East Policy, a think tank; and Frederic Hof who served as U.S. Army attach in Beirut in the early 1980's and the Department of Defense country director for Jordan, Lebanon, Syria and Palestinian affairs in the late 1980's. He's now a partner at Armadaj Associates, a business consulting firm. Welcome, gentlemen. Explain why Israel, after 20 years, two decades in Lebanon, was so eager to get out now.

NITZAN HOROWITZ, Ha'aretz: I think the reason is that simply Israelis are fed up with this occupation, what we call in Israel the Lebanese mud. Israel tried all the different approaches to Lebanon. They tried occupation, they tried brutal occupation, they tried to control with a local militia. They tried all sorts of methods. Nothing worked. And so after 22 years of occupation, Prime Minister Barak, this was his number one campaign promise, decided to go out after a year and he did what he did.

MARGARET WARNER: Now, surely he didn't expect this withdrawal to be so messy.

NITZAN HOROWITZ: No. He expected this withdrawal to be much more in order. He thought that an international force will take the place of the Israeli force there and the South Lebanese army. Unfortunately, the South Lebanese army collapsed with...

MARGARET WARNER: They were the allies of the Israelis?

NITZAN HOROWITZ: Yes. ...within a matter of hours. And the Hezbollah fighters, as we saw, took their place. This is unfortunate, but still, we have hope that now we'll have peace along the international border.

MARGARET WARNER: All right. Now, explain what we saw happening in Lebanon. First of all, why did this South Lebanon army collapse? Why was it so apparently chaotic, the whole process?

MOUAFAC HARB, Al-Hayat: We have a new reality today in Lebanon, and we have winners and we have losers. Obviously Hezbollah emerged victorious. Prime Minister Ehud Barak is a temporary winner until things... It depends on how events would unfold in South Lebanon. And you have losers, which is the SLA Army. And you have those who are not happy to see that withdrawal taking place, and I mean by that Syria. What happened today, I disagree that the withdrawal was not orderly. I think it was orderly. And it came as a surprise, that there were no violence. Hezbollah did not storm villages, like most people expected them to do. They behaved as... at their best. They were disciplined, and we did not see any massacre like the ones that took place in Lebanon when the Israelis withdrew in 1984 from the mountains.

MARGARET WARNER: All right. Now, explain to people who don't follow every nuance. Here you've got the government of Lebanon for 20 years has been demanding that Israel leave. Yet when Israel leaves, the force that moves in to fill the vacuum is Hezbollah, this guerrilla group, this resistance group, not Lebanese army troops. Explain that.

MOUAFAC HARB: Sure, I will. The Lebanese government, as everyone knows, is not... takes its cues from Syria, and also as everyone knows, the Lebanese government did not play a key role in the fighting against the Israelis. So today you have three sides in Lebanon: The Lebanese government is not a side. You have seer yeah, you have Hezbollah and behind it you have Israel. So the Lebanese government is marginal. When you talk about the Lebanese government, you go to Damascus.

MARGARET WARNER: All right, Rob Satloff. Now, where do we go from here? Israel went into Lebanon to prevent cross border attacks, among other things. What are the prospects that those are just going to resume?

ROBERT SATLOFF, Washington Institute for Near East Policy: Now we're in a new reality. The Israeli military strategy up till now actually worked fairly well. Very few Israeli civilians actually died in cross border attacks over the last 15 years. But Israelis grew tired of dying in Lebanese territory. Now the new reality is Israel operates from within its borders and promises massive retaliation against any power or any supporting power that fires across the border. That means via air power principally. Israel has promised that Syria, the main power broker in Lebanon, will be held responsible principally for the activities of Hezbollah, Palestinian groups or any other force that chooses to violate the border.

MARGARET WARNER: But what do you think of the prospects that in fact one of those groups will violate the border?

ROBERT SATLOFF: I think eventually pretty high. I think the Syrians have little interest in maintaining calm over the border. The Syrians weren't happy with the Israeli withdrawal to begin with because it deprives the Syrians of a card in negotiations against Israel. I think it probably might not be Hezbollah right away that does break whatever calm there is over the border, but there's lots of other proxies that Syria had at its disposal, Palestinian rejectionist groups in refugee camps, other terrorist groups in the Bekah Valley. I think the chances are pretty high that there will be a test of Israel's deterrent posture very soon.

MARGARET WARNER: What do you see as the prospects?

FREDERICK HOF, Former Defense Department Official: I agree entirely that, in a matter of... it's only a matter of time before Israel's resolve is tested, and perhaps what's important here is for the Syrian-Israeli track of the peace process to get moving again. We perhaps can look forward to at least a brief period of calm. There is a very important meeting in Damascus next month of the National Command Council, where significant powers may be passed to the president's son, Dr. Bashar Al-Assad. So it's not very likely that the Syrians would try anything major, I would think, between now and then.

MARGARET WARNER: What about Hezbollah?

FREDERICK HOFF: Hezbollah also, I think, has very good motivation to wait and see. One of the most significant things that's been happening over the last 48 hours is the return of literally thousands and thousands of Lebanese to their villages in the South. These are Hezbollah's constituents. For Hezbollah to put them at risk would be very risky indeed politically for Hezbollah.

MARGARET WARNER: What do you think is the level of threat to Israel now from Syria, from the Palestinians that are still there and from Hezbollah?

MOUAFAC HARB: Let me explain the political landscape right now in South Lebanon. You have Hezbollah, you have the Palestinian refugees and you have the Lebanese authority, which is not extended to the border. But those are the main armed groups right now in South Lebanon. Hezbollah wants to enjoy and celebrate the victory. For how long? We have to wait and see. The Palestinian refugees are mainly controlled by Yasser Arafat and Yasser Arafat is in peace with Israel. So I cannot see troops loyal to Yasser Arafat attacking Israel from the refugee camps. And you have the fashions factions that Dr. Satloff was talking about - those are the PLFBGC ...

MARGARET WARNER: Terrorist groups who still operate there.

MOUAFAC HARB: I don't want to use that word, but I would say those factions that are opposed to the peace process that are still operating, but they are not significant. And if those groups were to attack Israel, they are well known to be pro Syria, so it is Syria to be responsible, not Iran, not Arafat. So I think the Syrians would be more careful before giving accuse to cues to those guys to attack Israel.

MARGARET WARNER: How capable is Israel, in your view, if Rob Satloff is right and Israel is tested militarily... to protect its citizens in the North?

NITZAN HOROWITZ: Israel has the capability to do that. Israel is now awaiting a report by the United Nations that will give it international legitimacy to the retreat, and so a report, it will say that Israel did all it should have done.

MARGARET WARNER: Withdrew in...

NITZAN HOROWITZ: Exactly.

MARGARET WARNER: ...In accordance with the U.N. Resolution.

NITZAN HOROWITZ: Absolutely. And after this report is made, Israel will have the right of self-defense, and Israel as we all know, artillery and air force and all kinds of other means to retaliate. Let's hope that this does not happen. I mean, the whole idea was to go back in order to achieve peace. Let's hope that at least in the coming months, there will be some calm along the border.

MARGARET WARNER: Now, if you're right and there is a test and there is retaliation, how dangerous is that in terms of escalating. I mean if Israel has said Syria is ultimately responsible and you've got Syrian positions in Lebanon...

ROBERT SATLOFF: I think the danger is real. I think there's two dangers of our current situation. One is the immediate danger in the Israel-Lebanon-Syria arena. And the escalation will go very quickly because I think this time the Israelis are not going to make Lebanese pay. I think this time Israelis are going to make the Syrians pay, either Syrian assets in Lebanon or perhaps before long Syrian assets in Syria itself. But there's another danger of the last 72 hours and that's the demonstration effect of all we've seen on what's going on with the Palestinians. We saw last week violence complementing negotiations. I think the effect of this past week in Lebanon will be to confirm to Palestinians, in their own talks with Israel, the utility of violence to complement negotiations. So on both fronts, I think we could see danger and risk over the next several weeks.

MARGARET WARNER: We are hearing that from several quarters over there, that it may be sending a message that ultimately you can grind down Israel, you can wear out Israel with violence or other tactics.

FREDERIC HOF: I think everyone would agree here that we have not only a new reality, but we have a new timetable. And whether these sorts of lessons are going to be learned, I think is going to depend largely on what happens next. With the new timetable, it's important for the U.N. to move quickly. U.S. State Department is emphasizing this.

MARGARET WARNER: And you're talking about now moving U.N. troops into this area.

FREDERIC HOF: Moving U.N. troops to accomplish their first mission, according to the secretary-general, which is to mark the line of withdrawal so that the U.N. will be able to certify that Israel is completely out of Lebanon.

MARGARET WARNER: And explain why that isn't happening today.

FREDERIC HOF: There has been a lot of controversy over the precise location of the boundary. Israel, over the years, has adjusted its boundary fence sometimes at Lebanon's expense. So this needs to be defined. The U.N. needs to move very quickly, I think, to do this. The government of Lebanon also needs to move very quickly, moving police and, if necessary, army units into the villages of the South to restore a sense of law and order and to restore the authority of the government, which after all, is one of the key objectives of the U.N. Resolution.

MARGARET WARNER: You're shaking your head.

MOUAFAC HARB: I don't think the Lebanese government will send the Lebanese army to deploy along the border with Israel in the absence of assuming Israel agreement. And let me also go back to the discussion of what you were talking about. I think there is a precedent in the Arab world, which is for the first time there is an Israeli withdrawal asa result of a military campaign. And what we have witnessed also today is also a message to the Lebanese, which is you see those who allied themselves with Israel, and you have seen their fate on television, and you take a look at those who allied themselves with Syria, those who allied themselves with Syria are presidents, members of cabinets, businessmen. And look at those who joined the SLA and took the Israelis. So this is a message to the Lebanese people, and I think it would resonate for years.

MARGARET WARNER: Do you think that... briefly because I want to get back to Rob Satloff. Do you think that this withdrawal, when you look at it from Lebanon's perspective that Lebanon is going to be more or less at peace now?

MOUAFAC HARB: I think Hezbollah would now want to translate what they have achieved on the battleground into Lebanese politics. They want more power-sharing, and when we talk about Hezbollah, Hezbollah is made up of two components, the resistance and the political group and this security apparatus that wants something else. You should ask them what they want.

MARGARET WARNER: What's your assessment of the Lebanese government's likely next steps in this whole issue?

ROBERT SATLOFF: The Lebanese government is a complete subservient to the Syrians. If the Syrians decide they'll move, they'll move. If they won't, they won't. I think inside Lebanon, we're starting to hear brave voices from patriotic Lebanese who say, "now that Israel is out, maybe it's time Syrian troops should leave Lebanon, as well." And I think that will be an important issue on the regional agenda over the next several months.

MARGARET WARNER: But it sounds as if you agree with Mr. Hof here that, really until there is a Syrian-Israeli deal, this is going to remain a very, very unsettled situation.

ROBERT SATLOFF: Of course that's correct.

FREDERIC HOF: Yeah, it's going to be difficult. And it's not going to be easy. Everybody is worrying. But there is something big happened today, and I think the overall impression in Israel is relief and almost even joy.

MARGARET WARNER: And do you agree with Rob Satloff that there now... we may see in Lebanon a feeling of, now that Israel's gone, why not the Syrians?

MOUAFAC HARB: Yeah, certainly the Israeli withdrawal from Lebanon has created an anti-Syrian presence momentum. But how would this momentum take shape is to be seen.

MARGARET WARNER: Okay, thank you all four very much.

GWEN IFILL: Still to come on the NewsHour tonight, the China trade vote, a big airline merger, and facts over fluff.

UPDATE - CHINA TRADE DEBATE

GWEN IFILL: Kwame Holman has our report on the big China trade vote.

KWAME HOLMAN: After months of intense lobbying on Capitol Hill, multimillion-dollar advertising campaigns, endorsements from influential political figures, and dozens of rallies for and against granting permanent normal trade relations to China, the time finally had come for members of Congress to decide.

REP. BILL ARCHER, Chairman, Ways & Means Committee: This vote will be the most important vote that we cast in our congressional careers.

KWAME HOLMAN: As the debate proceeded, some members said they would vote to normalize trade with China because of the economic impact it would have on their home districts.

REP. LLOYD DOGGETT, (D) Texas: I just believe that trade will mean more good, high-wage technology jobs not only for Central Texas but for all of America.

REP. THOMAS EWING, (R) Illinois: Corn and soybeans are the heart of the district I represent in Illinois. And this legislation is veryimportant to our nation's struggling agricultural economy.

REP. JAY INSLEE, (D) Washington: Aerospace Machinists Local 751, recommending 44,000 aerospace workers in the Puget Sound area endorsed this treaty, and they did this for this reason: They recognize the real contest here is this: Who will have the trade benefits of this agreement, the workers in Telus, France, or the workers in Seattle, Washington?

KWAME HOLMAN: But Pennsylvania Democrat Ron Kink was not predicting an economic benefit to his district.

REP. RON KLINK (D) Pennsylvania: We found out in my home state of Pennsylvania just last month we've lost 22,000 jobs to Mexico after the passage of NAFTA. And I would ask those who are in support of PNTR: What are they willing to sacrifice on the altar of free trade?

KWAME HOLMAN: Virginia Republican Tom Davis countered Klink's logic.

REP. TOM DAVIS, (R) Virginia: You know, for America, this agreement is a one-way street. Our markets are already open to the Chinese. If there's going to be job loss, we've seen it in terms of some of these low-wage markets that have already moved to the Pacific Rim and to China and these other areas.

KWAME HOLMAN: But California Republican Dana Rohrbacher argued proponents of the China trade bill weren't being honest in their arguments.

REP. DANA ROHRABACHER, (R) California: What they are talking about when they talk about this commercial tie with China is not the sale of commercial items but the transfer of factories and technology, this transfer to Communist China of American factories. Once there, our business leaders who set up these factories in China end up in partnership, if not controlled by, the People's Liberation Army. We are setting the People's Liberation Army up in business with normal trade relations, and this makes it permanent normal trade relations.

KWAME HOLMAN: Members argued back and forth, and beyond jobs and trade. Opponents insisted the more important issue was the matter of ongoing human rights abuses in China.

REP. JOHN LEWIS, (D) Georgia: Where is the freedom of speech? Where is the freedom of assembly? Where is the freedom to organize? Where is the freedom to protest? Where is the freedom to pray? It is not in China.

REP. DENNIS KUCINICH, (D) Ohio: This Congress must insist that we stand up for America's dearest and most cherished values for freedom, for justice. That's the American way. And if we are going to make this world a better place, we have to stand for it.

KWAME HOLMAN: Proponents of China trade believed they had an answer for that as well.

REP. ROBERT MATSUI, (D) California: Those that live in China, the Chinese democracy movement, they want us to pass this because they want to engage the United States. They think if they gain economic power, they will be able to oppose the central government of China.

REP. RICHARD ARMEY, Majority Leader: And when we open the China market, citizens from all over China will be carrying devices like this, a simple little pocket PC and with that PC, they can connect to the Internet, every bit of information about culture, religion, markets, economics and freedom and dignity available on this earth. And they cannot be stopped.

KWAME HOLMAN: The concern raised by Minority Leader Dick Gephardt, however, wasn't about normalizing trade with China. It was the fact the word permanent is in the bill.

REP. RICHARD GEPHARDT, Minority Leader: The issue is: Will we take away the review, the leverage? Advocates of doing this say that the annual review is meaningless. If it's so meaningless, why does the Chinese government insist, as a price of giving us access to their market, that we take it away? I'll tell you why they ask for it so vociferously -- because they don't want the pressure, they don't want the annual debate on this floor. They don't want the light of the world to come in and see how they're performing.

KWAME HOLMAN: Illinois Republican Phil Crane, who co-wrote the trade bill, responded.

REP. PHIL CRANE, (R) Illinois: If we were to continue the annual renewal of normal trade relations with China, 134 countries on the face of this earth will have access to that huge market, the biggest market on the face of this earth, they will have accessed that market and we will be the only country that has not accessed that market.

KWAME HOLMAN: As the debate drew to a close, there was a show of appreciation by the full house for those members who led the fight for and against the China trade bill. Bonior of Michigan opposed it steadfastly. Rangel of New York broke with the Democratic leadership and supported it. And Speaker Hastert delivered the Republican vote and oversaw a process that was remarkably free of partisanship. And once all the votes had been cast, permanent normal trade relations with China was approved by a comfortable margin. It now goes to the Senate, where approval is considered a formality.

FOCUS - FLYING UNITED

GWEN IFILL: Now, the biggest airline gets bigger. First, some background.

GWEN IFILL: Today's announcement would combine the world's number one carrier, United, with the nation's sixth-biggest airline. Together, the new United Airlines would fly more than 6,000 routes every day, and take in $25 billion a year. One big reason officials gave for the reason: Geography. United, based in Chicago, is primarily an East-West carrier, its hubs in Washington, Denver, San Francisco, and Los Angeles. U.S. Airways, which operates out of Arlington, Virginia, flies mostly North to South, out of hubs in Charlotte, Philadelphia, and Pittsburgh. At a news conference today United Chairman James Goodwin said the marriage would be a good fit.

JAMES GOODWIN: For the passengers and cargo customers of United, this fulfills a geographic gap in our network along the East Coast, and offers a new reach to the East and Southwest. Passengers will be linked to system that will carry them to commercial centers around the globe and will benefit from the convenience of one airline, one check- in, one frequent flyer plan.

GWEN IFILL: The executives also pledged not to raise ticket prices for two years. United Airlines, founded in 1926, now flies to 135 destinations worldwide. It employs about 100,000 workers, and is 55% employee- owned. U.S. Airways, whose name would disappear in the deal, actually flies to more airports than United, 206. But many more of its flights cover shorter distances. It has 45,000 employees. The deal will be scrutinized by the Justice Department for antitrust violations. Anticipating those concerns, the new company would shed many of its flights out of Washington's Reagan National Airport. Robert Johnson, the chairman of Black Entertainment Television, would create a new carrier from those routes.

GWEN IFILL: Joining me now to discuss what this merger means: Richard Golaszewski, executive vice president of GRA Incorporated, a transportation consulting firm specializing in aviation, and Mike Orwoll, managing editor of "Travel and Leisure" magazine. Can you give me some sort of idea about what all of this means?

RICHARD GOLASZEWSKI, Transportation Consultant: I think it... You know, the first thing you have to understand is this is the beginning of this transaction. It's not the end. There are going to be a lot of people who weigh in. For the passenger in a U.S. Air city, it means a lot more destinations, a lot more flight opportunities. So there is definitely positive aspects for the consumer. I think the deal will be scrutinized heavily by the Justice Department, by the labor unions, and I don't think we've heard the last from the other carriers.

GWEN IFILL: Let's take this one by one, Mr. Orwell... I apologize for mangling your name during the introduction. Does this mean less competition among the airlines?

MARK ORWELL, Travel and Leisure Magazine: I think quite clearly, when one airline takes over another, it means less competition. Now that's going to shake out in the long term is a question because, when a large airline comes into an area where, say, like where U.S. Airways is so concentrated, it also presents an opportunity for upstart airlines to come into the picture and try and undermine that giant. That could happen.

GWEN IFILL: So you're saying that regional airline like D.C. Air, the Robert Johnson airline, could spawn others?

MARK ORWOLL: Well, I think... actually, I was a little surprised that the D.C. Air was announced so soon, but I'm not surprised that it was announced. I think something like this is expected.

GWEN IFILL: Okay, Mr. Golaszewski, let's go back to you. What exactly does United have to gain from this, and what does U.S. Air have to gain?

RICHARD GOLASZEWSKI: I think for U.S. Air shareholders, this is just an absolutely wonderful move. The airline hasn't been doing well financially, and they were bought out at a premium. So I think from that side of it, it's pretty much a win for the U.S. Air shareholders. For United, you know, it's becoming the battle of the large international networks, the big alliances. And United cements its position in the Eastern United States as the predominant carrier in the Northeast part of the United States with the acquisition of U.S. Air.

GWEN IFILL: Mr. Orwoll, the readers of your magazine, "Travel and Leisure" want to know the real bottom line here. We've certified both executives say for at least two years, there wouldn't be ticket price increases. Is that something which will hold for the long run?

MARK ORWOLL: I doubt it. They have promised that for two years, there won't be any increases in prices, apart from the increases in fuel, the Consumer Price Index. They've also said that they won't cut travel agent commissions at least for the first two years. After that, all bets are off. And I don't know of any other instance where there has been less competition, as well as lower prices, so I think it is going to ultimately turn out to be bigger prices for the traveler.

GWEN IFILL: So you're saying this kind of consolidation just in the long run has got to cost more?

MARK ORWOLL: Not only that, but I'm a little concerned about those travelers who live in the smaller areas, like Altoona, Pennsylvania; Utica, New York; Clarksburg, West Virginia who have depended on U.S. Airways and its rural airports much. Whether those airports and those routes are still going to be profitable for United is a real question mark.

GWEN IFILL: Well, Mr. Golaszewski, let's address that. Is this going to provide greater options for flying for people, either in small towns or in big towns? Or is it going to limit them?

RICHARD GOLASZEWSKI: I think what you'll see is... I don't really see a massive exodus of United or U.S. Airways from those cities that are profitable. And clearly they're making money in Altoona, they're making money in Clarksburg, West Virginia. So as long as there's a market for their service, they're going to be there. Now, the question on prices really depends on the level of competition that results. And again, this is really the first step in this merger. The Justice Department hasn't weighed in. There'll probably be more divest tours of parts of the system that United will be asked to do to get the merger clearance.

GWEN IFILL: Will there be divestitures of employees? Is it too good to believe that these two companies are combine and still end up with the same number of employees?

RICHARD GOLASZEWSKI: Right now they've said that they're going to keep both work forces intact, so...

GWEN IFILL: What do you think about that, Mr. Orwoll?

MARK ORWOLL: Well, I would find it very surprising if they did keep both work forces intact, at least beyond an initial honeymoon period. There's going to be with a lot of duplication of manpower, of equipment, that ultimately is going to prove unprofitable for United, if this merger goes through. The only way to please their shareholders would be to get rid of that unprofitability, and that could lead to loss of jobs. That's just a conjecture, but it seems likely.

GWEN IFILL: Well, and there's the union problem, which there is history. The last time they tried to combine these two airlines in this way, there was a seniority issue, right?

MARK ORWOLL: Well, there still is a seniority issue. In fact, going on right now the pilots association for United is having a job action, where they're not wanting to fly overtime in the same way that they have. The contract negotiations are going on right now. This is a very dicey time in the union relationships with United Airlines, and the unions, don't forget, the employees are major owners of United Airlines, so they have to make sure that the unions are happy.

GWEN IFILL: Mr. Golaszewski, also, the Justice Department has to weigh in on this. Do you expect that the Justice Department, which is in the middle of scrutinizing a similar combination of efforts between Continental and Northwest, do you expect that they're going to cast a funny eye on this one?

RICHARD GOLASZEWSKI: I think you can take it as pretty well certain that they'll scrutinize this one heavily. If they found competitive problems in Continental-Northwest, I think there are going to be a lot of areas, not particularly with the entire concept of these two carriers coming together, but there are going to be a lot of specific problem areas, not only due to United, but United's in this alliance with Lufthansa, SAS, Singapore Airlines. So if you look at a market like Philadelphia to Frankfurt, Germany, right now the two carriers in this market are U.S. Airways and Lufthansa. Well, Lufthansa's part of the star network, as U.S. Airways will be. And in the past, justice has forced a carve out of certain markets and said those two carriers still have to compete in those markets.

GWEN IFILL: Do you agree with that, Mr. Orwoll?

MARK ORWOLL: Actually, that's a very long and complex question of the. I'm not sure about that. I do think that, if this merger is approved, that it's going to open the door to a lot more mergers. Don't forget, we haven't seen a whole lot of airline mergers in the past ten years. Back in '87, '88, there were a number, including U.S. Air, which bought out piedmont airways, but Justice has been focusing on anti-trust issues among airlines very, very tough in the last four or five years. American was... they filed suitagainst American for trying to stymie competition at that Dallas hub. The Northwest-Continental alliance is in a lawsuit right now. Five airlines are trying to come together to form a web site where they can sell tickets together to their passengers. Justice is looking at that very, very carefully. So Justice has been focused really, really hard on these airlines. Whether this is going to make a break from that past five years is going to be a very telling decision because it could open the door to a lot more mergers.

GWEN IFILL: Mr. Golaszewski, a final word. Other airlines between now and the time that this is approved could also step in and throw this deal off track, couldn't they, by making their own bids?

RICHARD GOLASZEWSKI: There's no restriction on another carrier making an offer. There's probably some agreement that United and U.S. Airways have reached that there's a penalty if one walks away, but the shareholders of U.S. Airways still have a fiduciary responsibility to take the best deal that's offered. If American Airlines comes in and offers a lot more money, then they have an obligation to their shareholders to weigh that offer and give it full consideration.

GWEN IFILL: Well, we'll be watching. Mark Orwoll and Richard Golaszewski, thank you very much.

RICHARD GOLASZEWSKI: Thank you.

FINALLY - FACTS OVER FLUFF

GWEN IFILL: Local television news is wrapping up its critical sweeps period, and, in Chicago, an innovation in one local broadcast is attracting attention. Media correspondent Terence Smith takes a look.

CAROL MARIN, Anchor/Senior Editor, WBBM-TV: Barnes, are we hitting the desk?

TERENCE SMITH: There's a new look to local television news in Chicago these days.

SPOKESMAN: Three, two, one...

CAROL MARIN: Good evening.

TERENCE SMITH: And Carol Marin, a veteran anchor in the Chicago market, is the new face at WBBM, Channel 2.

CAROL MARIN: He won the Nobel Peace Prize for his work in the Middle East. Shimon Peres, here in our studio, next.

TERENCE SMITH: A live interview with a former Israeli prime minister.

CAROL MARIN: Mr. Peres, you going to be right over here. Watch these cameras.

TERENCE SMITH: Hardly standard fare for local news. Chicago has traditionally been a hard news town, and the competition amongst its five television stations especially fierce. So WBBM, a CBS affiliate here in Chicago, which used to rank first and now ranks fifth, recently introduced an innovative new broadcast that is radical in its simplicity. It emphasizes news-- not gimmicks, news.

CAROL MARIN: We're not going to give you an obligatory fuzzy animal story every night. We're not going to cross-plug programming as though it was a news story. For instance, the disease of the week off the hospital dramatic series that leads into us. We're not going to do celebrity stories just for the sake of making sure that we have a "people in the news" segment.

DEBORAH POTTER: There is a different sound, a different feel, a different format.

TERENCE SMITH: Deborah Potter is executive director of NewsLab, a nonprofit group that encourages quality in local news.

DEBORAH POTTER, Executive Director, NewsLab: You don't start off with "meet the anchor team and let's play a lot of drums. There aren't any teases at all, to speak of,

none of that "coming up next" eight times during the newscast, and when

you get to the story is 20 seconds and happened in some other town."

TERENCE SMITH: What the new broadcast does do is sometimes in stark contrast with its more conventional - and, at the moment, more successful - competitors, WLS, the ABC station...and WMAQ, the NBC affiliate. The selection of lead stories is often different.

CAROL MARIN: The former city treasurer served time in prison for fraud and extortion.

TERENCE SMITH: When the WBBM 10 PM news debuted in February, the other stations led with a water main break that tied up Chicago's loop for hours. Carol Marin, after leading with a local political story, gave it a brief mention in the middle of the broadcast.

CAROL MARIN: When that water main broke, we said is it an infrastructure issue? Is it going to lead to flooding elsewhere? Is it a big problem, is it a small problem? And the last analysis, it was a small problem, not related to a substantial infrastructure issue. It was 30 seconds.

TERENCE SMITH: The murders, fires and mayhem that are so common on local news around the country are minimized on this CBS-owned station. The sports and weather segments, a nightly staple on local television, are curtailed unless they make real news. The newscast even skips the so- called "happy talk" originated in Chicago in the 1960's by a local anchor, Fahey Flynn...

FAHEY FLYNN: How do you do, ladies and gentlemen, I'm Fahey Flynn.

TERENCE SMITH: That continues today.

ANCHOR: Yeah, baby. I'll come over and pressure wash your patio furniture for a fee.

ANCHOR: How about my deck? (Laughter)

TERENCE SMITH: At 51, Carol Marin is one of the very few "older"-- by TV standards-- solo women anchors in the business.

TERENCE SMITH: Much has also been made about the notion that it's a single woman anchor.

CAROL MARIN: Of a certain age.

TERENCE SMITH: Of a certain age.

CAROL MARIN: Yes, uh-huh.

TERENCE SMITH: And I'm told that you were delighted by a slogan that was suggested, but never actually used in promotion pieces. And what was it?

CAROL MARIN: "Old chicks rule." I thought it was very funny. It tickled me. It doesn't bother me.

TERENCE SMITH: While that promotion never made air, others stress Marin's 27 years in the business, and her toughness.

SPOKESMAN: She was always fair to me when I was in office.

TERENCE SMITH: Marin is breaking the mold for local television news, which surveys show has become the primary source of news for most Americans.

BILL KURTIS, Former News Anchor, WBBM-TV: If this is successful-- and success being defined in a respectable audience that's easy to sell to advertisers-- it will change the face of local news in this country, absolutely without question.

TERENCE SMITH: Bill Kurtis, now host of the "Investigative Reports" series for the Arts and Entertainment Network, anchored the WBBM News for 15 years.

BILL KURTIS: Is this the right product, as an alternative? I think if you look at it, what is quality to one set of viewers, myself included, would be boring to another set of viewers. What we may be showing here is that the consultants ultimately were right, that a fire burning, homicides, car chases, are more interesting than someone talking about politics. The consultants have always said, "don't do politics, people really aren't interested in that. Do the fires."

TERENCE SMITH: Marin did her share of fires and more in her days as a reporter and anchor at the NBC-owned station WMAQ. But when she refused to do cross-plugs and read other promotional copy, she was suspended for three days. Later, she quit altogether when the station hired national television talk show host jerry Springer, known for his outrageous antics, as a commentator.

CAROL MARIN: I could not share a news desk, introduce, or validate a Jerry Springer on a newscast that I believe tries very hard to do some decent work.

TERENCE SMITH: Marin's resignation made national news.

ANCHOR: In Chicago today, a question of principle.

TERENCE SMITH: Today, Marin's career is on a new track. She contributes pieces to the CBS newsmagazine "60 Minutes II," in addition to her anchor duties. Nationwide, local news formats, including those of WBBM's competitors, are frequently designed by highly paid consultants who advise the stations on how to boost their ratings, and of course, make more money. At a recent appearance at the Medill School of Journalism at Northwestern University, Dean Ken Bode asked Carol Marin what she thought of them.

KEN BODE: Consultants?

CAROL MARIN: The devil. (Laughter) Consultants-- perhaps not all of them, but many of them-- are those people who don't necessarily have a relationship to your town, or your news circumstance, but they come in to tell you how to jazz it up.

ANNOUNCER: Marin, Weigel, Baskerville, Flannery, Parker, Davis...

TERENCE SMITH: Marin's team of reporters-- nicknamed the Marin Corps-- is among the most experienced in town.

ANNOUNCER: ...Calloway: The Carol Marin team.

TERENCE SMITH: Planning for the 10:00 PM News begins at 10:00 AM, when Carol Marin and her staff assemble in a cramped conference room for the first of three regularly scheduled story conferences. On this day, there were several potential stories in play, including a maternity ward abduction and subsequent killing of a newborn...

WOMAN: He did so-- a very large woman with a baby not her own, with a bracelet that's beeping.

TERENCE SMITH: ...And the return to the mound that night of Chicago Cubs pitcher Kerry Wood, who had undergone surgery on his pitching arm.

MAN: This Kerry Wood thing is a medical miracle, the fact that a guy can have two holes put through his elbow, have an entirely different muscle, and still throw a 100-mile-an-hour fastball is a medical story as much as anything else.

TERENCE SMITH: The show had already booked its Shimon Peres interview, but the balance of the broadcast was open, and the subject of lengthy debate.

WOMAN: He's either going to do the nuclear waste override, or he might do Vieques, or he might do something else, right?

CAROL MARIN: Right. That'll settle it.

WOMAN: Boy, that's really... Definitive.

CAROL MARIN: Tonight's one of those nights where we really don't have a clearly defined lead, or think we do. We're on a scouting exhibition right now.

TERENCE SMITH: So far, the broadcast has gotten generally positive critical comment, but Phil Rosenthal, the media critic for the "Chicago Sun-Times," feels it's still a work in progress.

PHIL ROSENTHAL, TV Critic, Chicago Sun-Times: I think there's a certain eat-your-veggies quality to this kind of news, that you know you should... you know you should eat it, but you don't necessarily want it. Now, vegetables, like asparagus prepared well, can be great tasting. But not a lot of people know how to prepare asparagus just right.

TERENCE SMITH: Back at WBBM, the staff is preparing the asparagus at their 2:00 meeting.

MAN: We need more time. We're going to be all over that story.

WOMAN: Well, first of all, what are you going to be doing? You know, what you don't know is that Breen is going to be doing miracle surgery-- you know, modern medical marvel.

TERENCE SMITH: The debate goes on for 70 minutes.

CAROL MARIN: I'm exhausted.

MAN: You should be.

MAN: The "but" factor is setting in.

CAROL MARIN: Huge "but" factor.

TERENCE SMITH: The story about the abducted baby, at this point, will not lead the broadcast.

CAROL MARIN: It still is a story, but at this point, I would argue and some others would argue that it isn't the lead, because we don't know enough about it, beyond the awful tragedy of the death of the child, into whether there are significant hospital security issues, whether this is an anomaly.

TERENCE SMITH: People I talk to here in Chicago tell me that Channel 2 had nowhere to go but up, and that what you are doing is a sort of desperation alternative. Is it?

CAROL MARIN: Yeah, but that's okay. If the last resort, or one of the last resorts, is to go back to traditional news, then I'm glad to be here to do it, because for me, it's a great fit. We're trying to experiment, and we have nothing to lose in this experiment, because there are so many things to try, so many ideas out there.

TERENCE SMITH: So far, the viewer response has been tepid, at best. During the current May sweeps period, when advertising rates are set for the next quarter, the broadcast is still trailing its news competition, and on most nights, losing to the entertainment shows "The Simpsons" and "Friends." Although the new broadcast has not been an overnight sensation, it has picked up some viewers that surveys indicate had stopped watching late night news altogether. Significantly, many of them are in the demographically desirable 25-to-54-year-old age group, the group that advertisers covet. Hank Price, the general manager of WBBM, says the broadcast's improved demographics translate into millions of dollars in increased revenue.

HANK PRICE, General Manager, WBBM-TV: If you have five stations with newscasts that in some ways are interchangeable, that creates a commodity. And I don't want to be in the commodity business. So the opposite of a commodity is to create a premium product. Well, in the news, premium means quality. Quality is our most important goal. It's what we have to do. That's different from the way we traditionally do local news.

TERENCE SMITH: Meanwhile, in its final meeting of this day, three hours before broadcast, the WBBM crew is keeping its eye on the Cubs game, and surprisingly, the baby abduction story.

CAROL MARIN: I think this is basically a Loyola accountability discussion at this point.

TERENCE SMITH: As it turned out, all of the Chicago news broadcasts led with the same story this night. Carol Marin presented it as more than just a local crime story, stressing the issues of hospital security and accountability, and putting the event into national context.

CAROL MARIN: The National Center for Missing and Exploited Children says in the last 16 years, 105 babies have been kidnapped from hospitals in this country.

TERENCE SMITH: Kerry Wood's comeback was covered as both a sports and medical story.

ANNOUNCER: In his first at-bat in about two years, hits a home run...

TERENCE SMITH: Even if it has not scored yet in the ratings, the NewsLab's Deborah Potter says the Carol Marin show has caught the attention of local news directors beyond Chicago.

DEBORAH POTTER: There's a secret sort of cheering section going on in newsrooms around the country. I think there are a lot of journalists who would like to see this succeed. (Applause)

TERENCE SMITH: Both CBS and WBBM say they are committed to the new broadcast, and will give it the time it needs to determine whether there is an audience for a more serious approach to the news at 10:00.

MAN: Thank you.

CAROL MARIN: Good night.

RECAP

GWEN IFILL: Again, the major stories of this Wednesday: the House approved the China trade bill. President Clinton called it a boat for exporting economic freedom. And Israel completed its pullout from Southern Lebanon. We'll see you online, and again here tomorrow evening. I'm Gwen Ifill. Thank you and good night.