The NewsHour with Jim Lehrer

JIM LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight, a summary of the news; the latest on the homeland security legislation, with a debate over civil service issues between Congressmen Portman and Menendez; the Wall Street week that was, as seen by Gretchen Morgenson of the "New York Times"; a report on one man's effort to be free from Medicare rules; and the weekly analysis of Mark Shields and David Brooks.

NEWS SUMMARY

JIM LEHRER: The U.S. House neared approval of a sweeping homeland security bill today. It would create a new cabinet-level department, and it would give that department greater leeway in civil service and labor matters, as President Bush wants. The Senate's version doesn't go that far. The President today threatened a veto over the issue.

PRESIDENT GEORGE W. BUSH: I'm not going to accept legislation that limits or weakens the President's well established authorities -- authorities to exempt parts of government from federal labor management relations statute when it serves our national interest. Every President since Jimmy Carter has used this statutory authority, and a time of war is the wrong time to weaken the President's ability to protect the American people.

JIM LEHRER: Democrats said the President wants powers that would jeopardize the rights of federal workers. We'll have more on this in a moment. House and Senate negotiators worked out a compromise last night on revamping the nation's bankruptcy laws. The bill is designed to make it more difficult to dissolve debt through bankruptcy. Debtors with the means to pay at least 25% of what they owe over five years would generally have to do so. Party leaders said the bill is fair to those who don't pay their debts and those who do.

REP. JAMES SENSENBRENNER: 98% of the people in this countrywho pay their bills as agreed upon or if they run into trouble work something out with their creditors, you know, are not going to be stiffed for the amount of bad debt that is written off by people who wish to use bankruptcy as a financial planning tool.

SEN. TOM DASCHLE: The intent in this legislation was to go to address the abuses of bankruptcy, but protect those who seek bankruptcy for legitimate purpose. If we haven't found the appropriate balance, I guarantee you we'll go back and change the law to accommodate whatever imbalance that we find.

JIM LEHRER: The House was expected to vote on the bankruptcy bill tonight. The Senate could take it up next week. President Bush will hold an economic forum August 13 in Waco, Texas. A White House spokesman announced today Mr. Bush will talk with CEO s, workers, and investors, among others. The spokesman denied it was timed to overshadow corporate statements due the next day, August 14. That's when the nation's top 1,000 companies must certify their financial records to the Securities and Exchange Commission. Wall Street ended a wild week with a quiet but upbeat day. The Dow Jones Industrial Average closed up 78 points, at 8,264. For the week, the Dow gained 245 points, or 3%, its best showing in two months. The NASDAQ index was up 22 points today, at 1262. For the week, it lost 57 points, more than 4%. We'll have more on this story later in the program tonight. Rescuers in Pennsylvania began a second attempt to reach nine coal miners today. The men were trapped late Wednesday. Water flooded their mine shaft some 250 feet underground. Crews were drilling a rescue shaft to the miners when the bit on the drill broke early today. The rescuers then began a new shaft. Nothing's been heard from the miners since yesterday, but officials said they're optimistic at least some are still alive. And that's it for the News Summary tonight. Now it's on to homeland security, Congressmen Portman and Menendez, Wall Street's bouncing week, caught at home, and Shields and Brooks.

UPDATE HOMELAND SECURITY

JIM LEHRER: Homeland security legislation; Kwame Holman begins.

KWAME HOLMAN: Legislation to create a new Department of Homeland security made significant progress through the Congress this week. It appears the cabinet-level department will combine the responsibilities and resources of 22 government agencies and a federal workforce of 170,000. But at a White House event this morning, President Bush warned Congress not to restrict the department's flexibility in making personnel decisions as needed.

PRESIDENT GEORGE W. BUSH: The new secretary must have the freedom to get the right people in the right job at the right time and to hold them accountable. He needs the ability to move money and resources quickly in response to new threats, without all kinds of bureaucratic rules and obstacles. And when we face unprecedented threats like we're facing, we cannot have business as usual. Now look, I fully understand the concerns of some of the unions here in Washington. Somehow they believe that this is an attempt by the Administration to undermine the basic rights of workers. I reject that as strongly as I can state it.

KWAME HOLMAN: The President's comments came in response to the Senate's version of the homeland security bill that emerged from the Governmental Affairs Committee yesterday. It restricts the President's ability to waive union, or collective bargaining, protections. Connecticut Democrat Joseph Lieberman chairs the committee.

SEN. JOSEPH LIEBERMAN: Thousands of employees by the last estimate I ve seen, 170,000 employees will be transferred to this new department. And it's critically important as it begins that they not feel that they're fighting a defensive action to protect what they've earned over the years, which is their collective bargaining rights. We have included language that for agencies and employees moved into the department, would grandfather their collective bargaining rights, and would say that they nonetheless can be removed, but only if the individual's job duty materially changes from what it was where that individual was before.

KWAME HOLMAN: Tennessee Republican Fred Thompson argued Lieberman's proposal actually would increase the rights of unionized federal workers.

SEN. FRED THOMPSON: These employees, as we speak, do not enjoy the privilege of being exempted from this Presidential authority. They would be getting enhanced rights, if you want to put it that way, by becoming members of this new department, in that by making this transfer, these employees would be able to say to the President, "you cannot touch our collective bargaining rights if you make a national security."

KWAME HOLMAN: Senator Lieberman was at the White House this morning and the President made the most of the opportunity.

PRESIDENT GEORGE W. BUSH: I appreciate the work of Senator Lieberman. He's working hard. I am concerned, however, the way the committee has passed out the homeland security bill. The bill doesn't have enough managerial flexibility, as far as I'm concerned. I look forward to working with the Senator.

KWAME HOLMAN: This afternoon, Lieberman said the President shouldn't be concerned that the worker's rights issue can't be resolved.

SEN. JOSEPH LIEBERMAN: I said, Mr. President, I hope minor disagreements won't derail our work. This bill gives you 90% of what you asked for. He said, "I'll talk about that in my statement," and he was true to his word.

KWAME HOLMAN: Meanwhile, the House version of the homeland security bill, moving toward passage this evening, does give the President flexibility over personnel matters. Connecticut Republican Christopher Shays wrote the legislative language on the President's authority to waive union protections.

REP. CHRISTOPHER SHAYS: To exercise his national security authority under this provision, the President must pass through three gates: First, he must determine that the department's ability to protect homeland security will be significantly and adversely affected. Then, the current law test must be met. Employee's primary job function is in intelligence, counterintelligence, investigative, or national security work, and there an incompatibility between labor law coverage and national security in the particular agency.

KWAME HOLMAN: But Maryland Republican Connie Morella, who represents 78,000 federal workers in her suburban Washington district, warned that under the Shay's amendment, union members moved into the new department could be left with no collective bargaining rights at all.

REP. CONNIE MORELLA: Because the new Homeland Security Agency's mission could easily all be defined automatically as national security. I am concerned that potentially tens of thousands of employees could be prevented from being members of a union even though their work and responsibilities have not changed.

KWAME HOLMAN: Morella later joined a Democratic-led effort to restore some civil service protections that would not be available to homeland security employees under the House bill. Ohio's Dennis Kucinich focused on whistleblower rights.

REP. DENIS KUCINICH: Whistleblower rights are workers' rights. No worker should lose his or her job for exposing waste, cover- up, or lies by their supervisors. It is ironic that a bill to fight terrorism we have a provision to terrorize workers.

KWAME HOLMAN: But Oklahoma Republican J.C. Watts posted a chart that argued whistleblower and other civil protections would remain in place.

REP. J.C. WATTS: The President is saying, "Give me the latitude to defend our homeland," and we still can still guarantee all of these things. Employees won't lose none of these benefits. They're still in place.

KWAME HOLMAN: Differences between the House and Senate versions of the homeland security bill will be worked out in a conference committee after Congress returns from its summer recess in September.

MARGARET WARNER: For more on the debate over whether to extend civil service protection and collective bargaining in the new department, we are joined by two members of the House Select Committee on Homeland Security: Rob Portman, a Republican from Ohio, and Robert Menendez, a Democrat from New Jersey. Welcome to you both.

Rob Portman beginning with you. The President said today he needs managerial flexibility in this department. Why is that important?

REP. ROB PORTMAN: Margaret, it's absolutely critical in my view if this department is going to work that the President be able to take the 22 different personnel systems from 22 different agencies of government and meld them together in a way that we consolidate, streamline and make an effective agency to combat terrorism. Secondly, the agility of the terrorist needs to be matched by a more agile federal work force than is available if the President does not have some flexibility. All worker protections are in this legislation including protections against whistle blowers. I just saw a comment on that on the floor. It's in the legislation. What the President does ask for is some basic flexibilities in the area of pay, performance, classification and in appeals and adverse actions. I think it's a good piece of legislation because it gives him, I believe, the kind of managerial and the kind of personnel flexibility he's going to need, badly need, in order to make this work.

MARGARET WARNER: Congressman Menendez, you disagree with that. You don't think he needs this.

REP. ROBERT MENENDEZ: I don't think he needs the flexibility to the great extent that he wants it. For all intents and purposes Section 730 of Title 5 that guarantees these federal employees a variety of rights-- whistle blower protection, collective bargaining rights and other important issues important to people not only in the federal work force but throughout the country-- will in essence be subject to being waived by a Presidential determination on... that this is a national security interest. The reality is, is that the President earlier this year used those similar provisions in reference to the U.S. Attorney's Office where over 500 individuals who were seeking to be unionized were suddenly taken away of all of their rights including their right to collective bargaining even though many of them were, for example, clerical employees having nothing to do with national security. So homeland security should not mean public employee insecurity. These are the people who we're going to need their talent, their experience, their depth of knowledge from the different departments they're coming from, and it is important to have them come into a department as patriots as they are willing and able to perform at the highest order, but they shouldn't be insecureto do so. And I don't think that the President, who has said increasingly that in fact he doesn't mean to violate any of these protections, then why not have them in the bill? If you don't intend to violate any of the protections, then why not have them in the bill? The bill... there are provisions. The President would have plenty of flexibility particularly if some employees were going into categories having been transferred involuntarily into this new department, they would be going into categories that have to deal with intelligence, that have to deal with security issues, in two or three key categories he would have the flexibility. But you don't need this broad brush that I think will make federal employees insecure and doesn't provide the goals of having that institutional knowledge and that spirit de corps that is going to be necessary to make this new department successful.

MARGARET WARNER: Congressman Portman why do you believe and does the President believe that he needs to have this kind of flexibility throughout the department?

REP. ROB PORTMAN: Margaret, again it's the basic flexibility to make this work. Let me just be clear again. The whistle blower protections are included in the legislation. There's no change in current law with regard to whistle blowers. All of the worker protections found in Title 5 of the United States code, which is the civil service protections, are included in the legislation.

MARGARET WARNER: Excuse me. Let me interrupt you for a moment. You're talking there about things like basic civil rights or equal employment opportunity.

REP. ROB PORTMAN: That s correct.

MARGARET WARNER: All of that is still preserved.

REP. ROB PORTMAN: The workers would be treated with the same respect that other federal workers are. What the President is asking for is something very specific. And it actually is not the same flexibility he currently has in the Transportation Security Agency, which was passed by this Congress in the last year in response to September 11. It doesn't even go that far. But what the President has said is with regard to this agency in order to bring together these 22 different personnel systems and to make this new entity work, to be able to protect our kids and our grand kids into the future against terrorism, we need to have the ability to have the right people in the right place. We need to be able to offer pay incentives. I couldn't agree with Bob more on the need to deploy these folks in a way where they have high morale, where they feel like they're part of a team. That's what this is all about. It's paying people for their good performance. It's being able to get rid of people who aren't doing the right thing. In the end, employee protections are protected but not at the expense of homeland security. I think it's the right balance.

MARGARET WARNER: All right. But Congressman Portman, people who aren't familiar with the civil service system, give me an example of how civil service protections would get in the way of that.

REP. ROB PORTMAN: Let me give you a specific example. Right now if you want to go out and hire the best bioterrorist expert in response to a threat of bioterrorism, it can take you up to five months to hire that person following the civil service rules. A terrorist can commit an act of bioterrorism in five seconds or maybe five minutes. It shouldn't take five months. This is a new idea, admittedly; it's a 21st century approach to employment practices that says let's get the best people in the right places and let's be able to move people around as necessary. Another great example would be on the border. We now have on our southern border of Mexico and on the border with Canada several agencies involved in protecting our border: The Customs Services, the Border Patrol; the agricultural inspection folks, the Coast Guard. They're going to come together now in one border security agency. It's very important because right now the left hand doesn't know what the right hand is doing. You have different people without accountability and responsibility. You want to bring that together. In order to do that, you're going to need to have a pay system that is consistent across all those different personnel systems. And under current civil service rules you simply couldn't do that. These are the kinds of things the President is asking for. It's not to take away collective bargaining rights. In fact, collective bargaining rights continue just as they do now. What Bob was referring to earlier was a Presidential waiver where because of national security he would be able to pull people out of collective bargaining. That is a current right of the President and has been since Jimmy Carter. Presidents have used it sparingly but it seems to meal it would be ironic to take away that existing right of the President in the case of homeland security so we fought against that today.

MARGARET WARNER: Congressman Menendez, let me get you to respond on first the civil service side, which is the first examples that Congressman Portman gave. And the argument the President is making is there are rigidities in this civil service system. Do you think that's not the case, that the President could work perfectly well with all those additional rules?

REP. ROBERT MENENDEZ: I think that the President is given under the legislation broader powers than he needs and far greater... it's beyond flexibility. It's basically undoing a whole host of civil service rights. First of all, the reality is, is that what Rob, who I have a great deal of respect for and has worked on this issue, but what Rob describes is not necessarily the crux of the issue here. I think there would be plenty of flexibility in that regard.

MARGARET WARNER: You mean in being able to hire quickly without going through all the steps that are laid out now?

REP. ROBERT MENENDEZ: I believe the flexibility would exist there. I certainly believe anyone who is transferred into a position. I mean, basically what we say is if you came from a department and you were organized and had a union in that department and had rights under that department that when you get transferred, involuntarily those rights should continue to exist. However, even though we allege -- believe that those rights should continue to exist, if you do get transferred and you're now in a position that has sensitivity, that has national security, that has intelligence aspects, that may have some law enforcement aspects, attached to it, thereby, the President would have the flexibility he needs to ensure that those people might not be in a collective bargaining agreement and might not have all the rights of all the other employees. That is plenty of flexibility. But I would remind your audience that, in fact, the good government reforms that we now call civil service were to take partisanship out, were to take pressures out so that we could have people coming forth as Ms. Crowley came forth in the FBI and talked about things we never would have heard but for her coming forth and saying these were the things that went wrong in my attempts to tell the FBI leadership about Mr. Moussaoui. So these are the elements that we want to preserve and we do not believe the bill as it stands preserves those realities. We believe we can give the President flexibility but not in this totally blunt way. We shouldn't let go of those good government reforms that we have cherished for quite some period of time.

MARGARET WARNER: All right. Congressman Portman, let me turn the tables back on you. As Congressman Menendez says, a lot of these protections were put in because, unlike in private business, your managers are political appointees. If you give the President this kind of flexibility and freedom from all the civil service rules and regulations, how do you prevent that political power from being abused?

REP. ROB PORTMAN: Well it's a great question. And I couldn't agree with Bob more. That's why the legislation specifically cites all those current protections under law. For instance, political patronage would be absolutely illegal. For instance, any partisanship would be absolutely illegal. For instance, whistleblower protections are current law. You can keep all those protections in place and we do. And you must. Those are basic civil service protections that ought to be there. What we're talking about is something that is a little different. And that is, the flexibility to be able to manage. And again there are two reasons this is so important to this President because he is the one that's going to be asked to set up this new department. He's taken a bold step. He's given Congress a challenge and said let's make this work better for the American people, taking these 22 different agencies, each of which has a little piece of homeland security where everybody is in charge and therefore no one is in charge. Let's make someone accountable. Let's create this new department. But in doing so let's put the right people in the right place. This is where the rigidity is in the current system-- and it dates back to the 1950s and its antiquated civil service rules on things like classification and pay and performance and separation and appeals. These are the areas where-- this does not have to do with political patronage or whistleblower or civil rights or all the other protections which stay in the code explicitly. And we make that very clear. But if you don't provide those kinds of flexibilities again on pay performance, classification, and so on, you re not going to be able to meld these 22 agencies together. Second is again this is a unique responsibility. We're asking this department to be able to respond to an unpredictable and agile and a deadly threat of terrorism. We don't know where they're going to strike next. We know they will. We have got to be able to be agile in our response. That requires -- it seems to me -- the ability for the President to manage and to be flexible and to put the right people in the right place.

REP. ROBERT MENENDEZ: And I would just say that that agility that we both agree on can be accomplished as we have in the Department of Defense, in the Department of State, where we have some very significant and really important national security issues at stake both in the State Department and the Department of Defense and other agencies. And yet we have not seen the request for the broad, sweeping language under the guise of flexibility in those departments. So if we could do it at the Department of Defense, if we can we could do at the Department of State, if we can do it at other agencies of the federal government involved with law enforcement, I think that the protections that are provided there should be fully provided here. And under the guise of flexibility we should not be watering down those protections. It's worked there. It can work well here.

MARGARET WARNER: Congressman Menendez, Congressman Portman, thank you both.

JIM LEHRER: Still to come on the NewsHour tonight: The week on Wall Street, prisoner of Medicare and Shields and Brooks.

FOCUS WILD WEEK

JIM LEHRER: Wall Street's roller coaster week, and to Terrence Smith.

TERENCE SMITH: It's been another week of volatility on Wall Street. Monday and Tuesday, the Dow Jones industrial average dropped more than 300 points, only to move up nearly 500 points Wednesday, then holding its ground and ending with a gain for the week. The equally volatile tech-heavy NASDAQ was down 57 points for the week. Joining me now is Gretchen Morgenson, financial writer and columnist for the "New York Times." Gretchen, welcome.

GRETCHEN MORGENSON: Thank you.

TERENCE SMITH: Looking back at this extraordinary week, what explained the ups, the very sharp ups and downs?

GRETCHEN MORGENSON: Well, we've had increasing volatility in the markets really for the past few years. It's gotten much worse this year. The explanation for it really is just tremendous investor uncertainty. And, of course, we're all living through a down market. And that makes it much harder to take. People didn't seem to mind the volatility when stocks were going up, but now that they're going down it's very, very difficult. You had a lot of outflows from mutual funds this week which accounts for some of the down days. But you also seemed to have some stabilization in some of the bigger, broader indexes, not talking about the NASDAQ but in the S&P and the Dow Jones. So some professionals feel that we might be looking at a place where we can sort of bounce along here and get some stability.

TERENCE SMITH: We also had some dramatic headlines this week, Gretchen. You had the Adelphia executives being taken off in handcuffs.

GRETCHEN MORGENSON: Right.

TERENCE SMITH: We had Congress agreeing on a compromise bill to alter the accounting industry.

GRETCHEN MORGENSON: Uh-huh.

TERENCE SMITH: Did those developments move the market?

GRETCHEN MORGENSON: Oh, definitely. I think investors are looking for some sign that we are attacking the problem, solving the problem, at least getting to a point where we will get to a new ground where corporate financials can be trusted, where corporate chiefs can be trusted to either tell investors what's going on in their books and their operations. I think that's what some of those activities mentioned this week really started to give investors hope for. However, on the negative side, I think it's important to point out that the bank stocks, the big, you know, trusted bank stocks like Citigroup and J.P. Morgan were really hurt this week in the investor trust department by the Congressional hearings into their role in the Enron fiasco. And I think that's going to have longer-term ramifications both for those companies and for the market overall.

TERENCE SMITH: What... Gretchen, what do you attribute that very sharp midweek spike when it went up 488 points in one day, the Dow Jones -- what do you think caused that?

GRETCHEN MORGENSON: Well, we have had a tremendous downward pressure and so there is always that need for investors to look for the bottom. I think that there were a lot of people who had bet against the market who were probably unwinding their positions, their negative positions and therefore buying stocks. But I do think that there is still this, you know, sort of a need for investors to be positive. And they're looking for any entry point. That was seen obviously on Wednesday.

TERENCE SMITH: Of course, still more blues for the technology sector.

GRETCHEN MORGENSON: Yes. It's important to note that the technology sector, although it did rebound a bit, is still very overpriced. Those shares... some of them may never come back. And I think investors are still into denial about that because, of course, technology gave them such enormous gains in the 1998- 99, 2000 era. So it's hard to sort of, you know, jettison altogether the companies that really brought investors a lot of gains.

TERENCE SMITH: Still overpriced even though they have dropped, you know, NASDAQ has dropped 80% from its high?

GRETCHEN MORGENSON: Well, that's one of the things that some professionals told me in my conversations with them that was rational about the market that they liked. And that is that this is an area where the economy is still weak. We are not seeing corporations go back and capital expenditures rising in technology. We are not seeing individuals rush to their stores to buy PC s. So it is a rational exercise for investors to avoid these shares. We just haven't seen the bottom in them, and the demand is not there, you know, for their goods. So you should not be buying these stocks here.

TERENCE SMITH: You have been rational, but of course it was emotional as well. What was the mood? I mean you're there. You're covering this every day. What was the mood on Wall Street this week?

GRETCHEN MORGENSON: Well, certainly the big up day was one of great euphoria. We've maybe finally seen the bottom. Of course, picking tops and bottoms is an impossible task and nobody should even try to do it. But any time you see 500 points almost move on the Dow, everybody will be happy with that. I think though the outflows and the mutual funds is a harbinger of continued weakness. I think that you're going to see a lot more movement into the money market funds, which are a safe haven. I think investors are still sorting through the carnage, you know, their denial has been pretty strong. They haven't been opening their statements is a common answer I get from investors. So I think there's still a little bit of negativity to work through.

TERENCE SMITH: I have read analysts saying that investors are actually obsessed with the market itself rather than the economy, and that they're making their decisions based on their alarms about the market.

GRETCHEN MORGENSON: Well, unfortunately the market became a very big part of the economy. As more and more investors invested in stocks, as more households had stocks, you had this stock market sort of wagging the dog, as it were. And you know, their sense that the market is a driver is absolutely accurate because so much of the gains that we saw in the stock market in the late- '90s was translated into increased consumer purchases, increased corporate purchases, so it definitely does have an impact. But now unfortunately it's weighing on the economy because if consumers continue to take heavy losses, then their spending will be curtailed.

TERENCE SMITH: You know, for years consumers have accepted the notion apparently that stocks are the place to be in the long run -- that if you buy them and you hold them and you wait long enough, you'll make money. Is that notion being undercut?

GRETCHEN MORGENSON: I think it's being undercut, but I think the people that are in the worst scenario right now are, as you point out, people who don't have any long run left. The retirees, the people who are getting towards retirement who felt that they had this nest egg that was going to be there for them -- and unfortunately it's no longer there. I mean, I know people who are now going back to work who are in their 60s who had retired years ago and thought that they really had it made in the shade. Those are the people that are really being hurt by the carnage in the stock market.

TERENCE SMITH: Okay. Gretchen Morgenson, thank you so much.

GRETCHEN MORGENSON: Any time.

FOCUS FREEING THE HOMEBOUND

JIM LEHRER: Now, one man's struggle to gain benefits for the disabled. The reporter is Susan Dentzer of our health unit, a partnership with the Henry J. Kaiser Family Foundation.

SUSAN DENTZER: Like many patients with amyotrophic lateral sclerosis-- also called ALS or Lou Gehrig's Disease-- 41- year-old David Jayne sometimes feels imprisoned in a useless body. He describes the sensation as he speaks through a high-tech speech synthesizer, which he controls by raising his eyebrows.

DAVID JAYNE: This hideous disease has progressed to the point that I can only move two fingers, and they are failing, turn my head, and slightly move my left knee. It requires two people, two hours to get me out of bed, showered, and dressed for the day.

SUSAN DENTZER: Jayne says the effort is worth it, if only to allow him the occasional trip away from home with his two children, Hannah and Hunter. Jayne and the children's mother are divorced.

DAVID JAYNE: I dearly want their memories to be of vacations and fun, and not of their father confined to home.

SUSAN DENTZER: Today David Jayne got his wish, thanks in part to President Bush. On the 12th anniversary of the enactment of the Americans with Disabilities Act, Bush announced a modification in a Medicare restriction that has kept many people like Jayne mostly confined to their homes.

PRESIDENT GEORGE W. BUSH: Today Medicare recipients who are considered homebound may lose coverage if they go to a baseball game-- which, of course, I encourage them to do-- or meet with a friend or go to a family reunion. So today I announce we're clarifying Medicare policy. So people who are considered homebound can occasionally take part in their communities without fear of losing their benefits.

SUSAN DENTZER: Although David Jayne wasn't on hand to celebrate, disability activists said the victory was clearly his, experts said. Ruben King-Shaw is deputy administrator of the agency that oversees the federal Medicare program.

RUBEN KING-SHAW: He has brought the nation to refocus on an issue that, you know, that perhaps hadn't gotten the right kind of attention for the right amount of time.

SUSAN DENTZER: Jayne's medical care is largely paid for by Medicare, the federal health insurance program for the aged and disabled. His coverage includes regular home care visits by a skilled nurse to change his breathing and feeding tubes, and daily help from a home health aide for his morning routine. But until today, Jayne could not legally qualify for these Medicare home health benefits unless he was homebound. He and others in his condition could only leave home to obtain medical care or to attend religious services. Jayne challenged this homebound restriction on several occasions, with unfortunate results. One time was in the fall of 2000, when he attended a University of Georgia football game with an old college friend.

DAVID JAYNE: This was the first time in over three years I had left my home overnight except hospital stays. The trip was difficult, but wonderful. I had not felt that alive in years.

SUSAN DENTZER: But after an article about Jayne appeared in a local newspaper and mentioned the away-from-home trip, Jayne's home health care provider cut off services to him. Only with the help of Jayne's Congressman were the services restored. So Jayne subsequently launched a grassroots lobbying effort to persuade the government to loosen up on the homebound restriction for roughly 50,000 Americans like him. They have a range of neurological or muscular diseases that are life- threatening or terminal, including advanced multiple sclerosis or severe spinal cord injuries. Jayne says he's collected 17,000 signatures on a petition drive to lift Medicare's homebound restriction. From his home in Georgia, he has made several arduous trips to Capitol Hill to make his case to lawmakers.

REP. ED MARKEY: So who have you visited so far today?

SUSAN DENTZER: Among those he met with was Massachusetts Democratic Representative Ed Markey, who had sponsored a bill to change the law.

REP. ED MARKEY: One of the goals we have in America is to keep people out of hospitals. The way we can do that is to give families a little more home health care benefit so that they can keep their loved one at home. The reality is that the families would like to keep them in home, those with the serious illnesses, but still to take them out to church or to synagogue, take them out walking around the supermarket, or wheel them up and down the streets of their community.

ROBERT DOLE: This is Joanne. She's been one of our volunteers.

SPOKESPERSON: How are you?

SUSAN DENTZER: Jayne also gained a powerful ally in former Republican Kansas Senator Bob Dole. Dole, who lost the use of his right arm following a World War II injury, is now honorary chair of Jayne's coalition. He spoke last week at a Capitol Hill news conference.

ROBERT DOLE: And you know, this morning I've been having a little trouble with my button because I've been having trouble with my left arm, and I was thinking, "gee, this is going to be a terrible day." But then I thought of who I was going to see today, and so I thought, well, I don't have many problems.

SUSAN DENTZER: Experts say the homebound restriction points up an even larger problem: Inadequate systems of providing and paying for chronic, long-term care. Bruce Vladeck is a former government official who oversaw the Medicare program during the Clinton Administration.

BRUCE VLADECK, Professor of Geriatric & Health Policy, Mt. Sinai School of Medicine: The Medicare home care benefit was originally conceived, and for some people still serves as a very targeted narrow short-term benefit to assist people who have just been hospitalized, and in fact, to make it possible to discharge them from the hospital more quickly and to continue the course of treatment.

SUSAN DENTZER: In that context, Vladeck says, the homebound restriction on home care used to make sense. Only people truly confined to home could qualify for in-home services. For others who were well enough to leave home, it was far more economical to provide services in hospitals or doctors' offices. But now times have changed, says Ruben King-Shaw.

RUBEN KING-SHAW: You now have more of a chronic condition of homeboundness, if you will. And so, the benefit is still designed for a short-term clinical condition. The reality is you have many, many people who have a chronic or long-term situation where they will need those services brought to the home to have a healthy and productive life.

SUSAN DENTZER: And advances in technology are only driving up the need for those services. Thanks to state-of-the-art medical care, people like David Jayne are living far longer after their terminal diseases are diagnosed. Meanwhile, because of motorized wheelchairs and other technologies, they're more able and eager than ever to have a life outside the home. As a result, there's been only one powerful argument against changing the homebound restriction: The potential cost. Medicare now spends roughly $13 billion a year on home care, an amount that Congress has squeezed down on sharply in recent years. If the homebound restriction were loosened substantially for people like David Jayne, Congressional budget scorekeepers fear that far more people would use home care services. They've estimated that could drive up the costs by about $1.5 billion over a decade. Backers of the change like Congressman Markey dismiss that argument.

REP. ED MARKEY: I contend that it will cost nothing, because there is no one who is now going to say they have Alzheimer's or Parkinson's or they have ALS or some other disabling disease just so they can have someone come into their home for an hour a day to have them... bathe them, or feed them.

SUSAN DENTZER: Disability activists at the White House today said the President's announcement was a small first step in the right step. Henry Claypool is with an organization that seeks to modernize Medicare and Medicaid.

HENRY CLAYPOOL, Advancing Independence: I think we're most concerned about the Medicare program telling people with significant disabilities when and under what conditions they can leave their home. Fundamentally it's an issue of freedom and individuals that receive Medicare home health benefits should be able to determine when and under what circumstances they leave their homes. And from what the President said today, we're not quite sure that that's the case.

BRUCE VLADECK: It helps around the edges. It helps David and it helps people like David. There are thousands of them. But there are millions of other people out there who might or might not benefit from Medicare home care services. And who are going to remain in... and the number, of course, is growing all the time. We have greater and greater capability to increase the number of folks with chronic illnesses in our community who are alive, but we have not kept up at all in our capacity to serve them.

SUSAN DENTZER: But thanks to David Jayne, perhaps the nation is at last making a start.

FOCUS SHIELDS & BROOKS

JIM LEHRER: And finally tonight, Shields and Brooks, syndicated columnist Mark Shields, and David Brooks of the "Weekly Standard."

Mark, how do you read the President's threat, renewed threat today, to veto the homeland security bill if he doesn't get what he wants in civil service flexibility -- the issue that Margaret discussed with the two congressmen at the opening tonight?

MARK SHIELDS: Jim, I find it fascinating. The President, the commander in chief, he dominates the landscape on any discussion of national security. He's about to get 99% from Joe Lieberman and the Democrats in the Senate of what he's requested and a major transformation of political structure and the governmental structure. Yet this one fight to me symbolizes the total end... official termination of the good will that followed September 11. After September 11, every politician in shoe leather wanted to be photographed with, identified with, the heroes of that tragedy: The firefighters, the police officers, the emergency workers. We heard tributes to their heroism so richly deserved. Yet every one of those workers was a public employee and a dues-paying union member, none of whomever was recorded said, no, no, I'm not going to work overtime. No, no, I've got to talk to my shop steward here -- all of whom put their own life at risk to save strangers. As a consequence you heard very little of the anti-government rhetoric that had been so popular in conservative, rhetorical circles before that. Then, you know this is over. Now we're back to business as usual. President Bush has just endorsed a... what could be called an anti-business accounting reform bill, which many in the business community are upset about. This is back to look we're going to stand with you. We're against unions. And it's still the same old guys and the Democrats; unions workers are an awfully important constituency to them but on right of collective bargaining it's a deeply ingrained verity for the Democratic Party.

JIM LEHRER: How do you see, it David?

DAVID BROOKS: Differently.

JIM LEHRER: Surprise, surprise.

DAVID BROOKS: This is not about whether you admire firemen or policemen or people like that. This is about whether the President has the flexibility to protect the people. There was a study of 100,000 federal workers who operated under these rules who were rated as poor performers. Only 3% of those people were removed from those jobs. That means as I understand the Democratic position in the Office of Homeland Security, which is charged with protecting our homeland from terrorist threat, 97% of the people who are incompetent at their job will be allowed to stay in those jobs. It seems to me that endangers the American people in terrorist attack. It seems to me, you know, the Republicans and on this show Mr. Portman was polite about it. But the Democrats are supported by the unions and they get a lot of campaign donations from the unions but it seems to me when national security is involved, that you have to be flexible and you have to allow incompetent people to be fired. That's what's happened with the federal workers at the airports, the airport workers; they have more flexible rules. That's what happens in the CIA, the Secret Service, FBI, but it s not being allowed to happen here. It seems to me it's shameful actually.

JIM LEHRER: You mean it's a political union issue.

DAVID BROOKS: No, that's not only part of it. But I think that's a strong element, the loyalty of the unions. I do think as in most issues there's the political interest of donors helping the donors, helping the people who are the base of your party; there s also sincere interest that you have to protect these rights. And I understand that. It s sincere. I don't say they're totally being bought out. I think the union element is a strong part of it though.

JIM LEHRER: What about David's point? The President ought to have the right to fire incompetent people in a national in a Department of Homeland Security.

MARK SHIELDS: Incompetent people can be fired, are fired. And the reality is this is not talking about firing. This is talking about eliminating the right of workers to belong to the union and to collectively bargain, which is deeply already established. And it's not a question -- you show me an example where anybody in the national security... I mean, we had the crisis. We had... I mean we had the laboratory experiment in New York. Is there a more unionized state in the United States than the City of New York -- the state of New York? Is there one single example of one of them who, you know, for any reason said gee I've been on the clock too long? I'm supposed to have a 15-minute break every four hours? Not at all.

DAVID BROOKS:I don t know the union rules in New York. In cases like September 11 people go beyond. They don't care about the rules in cases like that. But it seems to me in the day-to-day preparation for some sort of terrorist attack, which is not a remarkable thing, it's not when people feel called upon to heroism, which they do perform, but the day to day running of the bureaucracy, it s making sure that people who are competent on the job get promoted and people are not in a position where they can mess up, it seems to me that's the thing we have to worry about -- not in those heroic instances. It's also about attracting good people and good young people to these sorts of government jobs. There was a poll by Mark Pen done earlier in the week; 41% of young people are interested in government service, which is a very high number, since September 11. Then they're told what government service involves; that it will take weeks and months to find out if you get the job, that the bureaucracy involved; that doing well in your job doesn't necessarily lead to promotion. Then suddenly they're not interested. It seems me in the office like the Office of Homeland Security you want the federal work force to be able to attract the best people and look more like the rest of the work force.

MARK SHIELDS: I don't think it's any question anybody who wants to work in homeland security brings to it that same sense of mission and same sense of purpose. I think it's self-defining.

JIM LEHRER: David, what about the basic line here though? Is this such an important issue that you believe the President is justified in vetoing it if it comes to him finally in that bill?

DAVID BROOKS: I think it is. And I don't think it's pro business or union busting. I just think he feels that he can't meld all these different agencies together unless he has some flexibility. I would like to return to something Mark said, which has suggested sort of a feeling I've had that you sort of I guess have had too that since September 11 there was a feeling of bipartisanship. There was some coming together. I really feel in the last couple weeks on a whole range of issues we've really gone back to orthodox Republican-conservative positions. I felt there's a much wider gap even than there was in the 1990s because Clinton was sort of in the middle. But there's really a return to almost Cold War polarities now in politics.

JIM LEHRER: Do you agree?

MARK SHIELDS: I think we're returning to normal. I mean, we were at a time-- and that's essentially what we're seeing in surveys, we see it also in the climate.

JIM LEHRER: Is that a good thing or a bad thing?

MARK SHIELDS: I think it's a good thing. I think partisanship is good. I'm not for polarity. David has always....

JIM LEHRER: You're for reasonable

MARK SHIELDS: Yeah. I think partisanship, God bless partisanship. Let's be very frank about it, Jim. The Democrats I have said before -- have had all the combativeness of a sedated sheep for the past several months. And now all of a sudden, you know, there's a sense that, gee, there's an election in 2002. There are differences between us. Those differences all of a sudden seem to be important to voters and maybe we ought to reidentify with what we've stood for historically.

DAVID BROOKS: I think that's a fair point. Aristotle and I are always saying that human beings are political creatures.

MARK SHIELDS: There you go again. You and your Greek friends.

JIM LEHRER: So you don't think creeping return to... not creeping, you would say at this point -- I mean a return to partisanship is necessarily a bad thing?

DAVID BROOKS: Not necessarily but it is, I think it's an angrier climate. I do agree with Mark that the Republicans have been on the conservative side for a long time. The Democrats were more to the center. I think they're reverting. The Wall Street scandal plays into this, by the way. I really think over the past couple of weeks the Democrats have, in my view, flipped their lid, have lost a lot of the pro business, pro capitalism attitudes they had in the 1990s under Bill Clinton and have reverted back to Naderism.

JIM LEHRER: to the detriment of themselves or to the detriment of the President?

DAVID BROOKS: I think so. I think it's mostly in rhetoric. It's in broad brush attacks on corporate America, broad brush attacks on big business, corporate greed. It's on slandering a guy like Harvey Pitt, who is no friend of mine but he's attacked simply because he used to work... he used to do some work for KPMG and other consulting groups as if doing that work somehow taints him. It's in that sort of attack that I really think the Democrats are distancing themselves from middle class suburban voters who work for corporations.

JIM LEHRER: Mark, do you see it that way?

MARK SHIELDS: I could not disagree more strongly.

JIM LEHRER: So we have a polarizing situation here.

MARK SHIELDS: Some polarity has crept in. Jim, the plurality of voters now believe that George W. Bush cares more about large corporations than cares about ordinary citizens. There's no doubt about it. I mean, this is... this is a... to the Democrats, this is an enormous political gift. For them not to take advantage of it would prove that they really have lost any instinct for the capillary let alone the jugular. The reality is this. We have an administration that's provided itself on its corporate ethos. This is an MBA President. All of a sudden being closely identified with large business and big business has become a political liability. It's become political baggage for the President and for Republicans. That's why you saw this head long embrace of Paul Sarbanes legislation this week on accounting reform. The last time I checked there were 49 Republicans in the Senate. I didn't see one of them voting against that bill.

JIM LEHRER: But you think this is a cheap shot, right, David?

DAVID BROOKS: I think the Democrats have been given this incredible gift and they're going to screw it up.

JIM LEHRER: What are they doing?

DAVID BROOKS: What they re going to say is we hate guys like Bush and Cheney, that hold country club crowd, with their tasseled loafers, they were prom kings; they were in the fraternities we couldn't get into. We hate these people. If only we can get the American people to hate them as much as we hate them, then we ll win elections. Well, having watched the Republicans try to get the country to hate Bill Clinton, I can tell you, it ain't going to work. The American people are not going to hate Dick Cheney; they re not going to hate George Bush. It seems to me the vulnerability the Republicans have, and I'm a pessimist about Republicans fortunes, is they do not have the answer to the question, which people are going to start to ask in November, which is what are you going to do to make me feel secure? I don't think it's the scandals.

JIM LEHRER: You mean secure from in a homeland security context.

DAVID BROOKS: And in the stock market.

JIM LEHRER: And economic security. Okay.

DAVID BROOKS: I don't think the scandals are going to amount to anything. I don't think the economy is going to amount to anything. The economy grew 6% in the first quarter and 3 something % in the second. But people feel insecure; there's a wave of anxiety. And they're going to say to the Republicans, what are you offering me to make me think this anxiety is going to do away? Capital gains stuff? That doesn t sound right. Social Security privatization? That doesn't sound right. So all the standard Republican policies, which I happen to believe in, are politically off the table at the moment, and that s a problem for the Republicans.

MARK SHIELDS: It s a problem for the Republicans because when all is said and done, I don't detect that same zealous rhetoric and I guess David is hanging around different precincts than I am. I don't hear that from Democrats. I really don't. You know, you go to speeches on the floor of the House or the Senate you don't hear them, you know, wanting to have the firing squad for CEO s. But, Jim, whether it's an epidemic or an outbreak of ring worm or whether it's declining Sunday school attendance, the Republicans have had a one-size-fits-all remedy for every social and economic ill. It's called a tax cut. Right now, I mean, they're facing the responsibility, the party that has the White House is responsible for the economy. Bill Clinton was in trouble on that in '94 and he soared to re-election in '96. George W. Bush, the problem with Republicans right now and the way they're concerned the ones up in November is they think the white house is a lot more concerned about 2004 and re-election of the President than they are about keeping a Republican House and maybe getting back a Republican Senate in 2002.

JIM LEHRER: In a word, do you agree with David that the real issue though is how the state of mind toward their own security, is that more important than whether the economy itself is doing right or wrong?

MARK SHIELDS: I think, you know, perception is based upon reality. I mean, Jim, people thought they had college funds for their children. They thought they had retirement funds. And all of a sudden those are gone.

JIM LEHRER: So I think he agrees with you there's a lack of polarity here. Thank you both very much.

RECAP

JIM LEHRER: Again, the major developments of this day: The U.S. House neared approval of a sweeping homeland security bill, and a bill making it harder to dissolve debt through bankruptcy. And on Wall Street, the Dow Jones Industrial Average gained 78 points, ending the week with a 3% gain. The NASDAQ closed up today 22 points. A reminder that "Washington Week" can be seen on most PBS stations later this evening. We'll see you online, and again here Monday evening. Have a nice weekend. I'm Jim Lehrer. Thank you and good night.