The NewsHour with Jim Lehrer

JIM LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight, the news of the day, then an Iraq update from Anthony Shadid of the Washington Post in Baghdad; some perspective on President Bush's vision as part of today's economic conference; a media unit report on spreading information on the street; a look at what the latest wireless merger says about the wireless future; and a Richard Rodriguez essay on hearing the Aztecs.

NEWS SUMMARY

JIM LEHRER: The campaign for Iraq's Jan. 30 national election formally began today. It was also the deadline for candidates to register. Prime Minister Allawi officially announced his candidacy, surrounded by allies. He pledged to work for national unity and to push for the ultimate withdrawal of foreign troops. In addition, a former foreign minister, Adnan Pachachi, announced he will run. Earlier, he'd called for postponing the election. A bomb exploded outside a Shiite holy site in Iraq today. It happened at dusk in Karbala. The blast killed seven people and wounded more than 30, including a top aide to Iraq's leading Shiite cleric, Grand Ayatollah al-Sistani. No one claimed responsibility. Also today, Iraq's defense minister accused Iran and Syria of fueling the insurgency. He said Iran, especially, wants to see "an Islamic dictatorship" in Iraq. Later, in Washington, President Bush was asked about that after meeting with the prime minister of Italy.

PRESIDENT GEORGE W. BUSH: We expect people to work with the Iraqi interim government to enforce the border, to stop the flow of people and money that aim to help these terrorists. And we will continue to make it clear to both Syria and Iran that... as will other nations in our coalition, including our friend the Italians, that meddling in the internal affairs of Iraq is not in their interests.

JIM LEHRER: Back in Baghdad, the Iraqi government invited members of Saddam Hussein's old army to return to service today. It said it needs former drivers and supply troops to move fuel and other essentials. There was word today the former Iraqi general known as "Chemical Ali" will be the first of Saddam's deputies to stand trial. He's accused of ordering poison gas attacks that killed up to 5,000 Kurds in 1988, among other crimes. The Iraqi defense minister announced the trial will begin no later than mid-January. U.S. officials today reported the deaths of two more American troops in Iraq. They said another U.S. Marine was killed west of Baghdad on Tuesday. Eleven Marines have died in western Iraq since Saturday, mostly in lingering fighting in Fallujah. Also today, a U.S. soldier died of wounds after his convoy was attacked south of Baghdad. The U.S. Army will spend more than $4 billion in the next six to eight months to put more armored vehicles in Iraq. Pentagon officials said today it's buying new, fully armored Humvees and armor kits for older vehicles. Brig. Gen. Jeffrey Sorenson insisted shortages are not because of poor planning. He said it takes time to design and test parts and to find contractors.

BRIG. GEN. JEFFREY SORENSON, U.S. Army: I mean, this is not Wal-mart. As we've gone through, this is a very detailed process in terms of trying to get the capability. Steel, we had in some cases, a ramp-up, as I said before. We had one steel producer. We had to go out and get two more. There are a lot of mom-and-pop shops here that are working 24/7, three shifts to provide capability. In many cases, a lot of these contractors have gone on risk to give the army what it needs.

JIM LEHRER: The armor issue caused a storm of criticism last week, after a U.S. Soldier complained to Defense Secretary Rumsfeld. Today, Lt. Gen. Lance Smith, with the U.S. Central Command, warned there is no "silver bullet" to stop insurgent attacks in Iraq. He said, "as we adapt, they adapt." We'll have more on the situation in Iraq right after this news summary. U.S. Embassy in Kuwait today warned Americans there to be on alert. The embassy said it has credible information terrorists are planning strikes against unspecified targets. There were no details but the statement urged Americans in Kuwait to maintain a low profile. The governments of Australia and Britain warned today of new terror strikes in Indonesia. The Australian foreign minister said: "Credible new information suggests terrorists are ready to carry out an attack shortly, possibly targeting a Hilton Hotel." In 2002, bombings on Bali Island killed more than 200 people, including 88 Australians. And last September, nine Indonesians died when a suicide bomber attacked the Australian embassy in Jakarta. Back in this country, the president talked up his economic agenda at the opening of a two- day White House conference. He renewed his call to cap jury awards in product lawsuits. And Treasury Secretary Snow said the administration is determined to overhaul the tax code. We'll have more on the White House conference, and the president's economic policies, later in the program. Telecommunications giant Sprint announced today it's buying Nextel communications for $35 billion. Sprint-Nextel will have 35 million customers nationwide. That will make it the nation's third-largest wireless provider behind Cingular and Verizon Wireless. In New York City today, leaders of the merged company said they're joining Sprint's consumer base with Nextel's business clients.

TIMOTHY DONAHUE, Nextel CEO: You can just imagine putting these two teams together with the assets that we have, how exciting it is going to be for us to take on Verizon, to take on Cingular, and in two to three years, build the best wireless- telecommunications company in this country.

JIM LEHRER: The merger still needs approval by the Justice Department and the Federal Communications Commission. We'll have more on this story later in the program tonight. Airline passengers may be able to get online in the air by 2006. The Federal Communications Commission voted today to allow high-speed wireless access on domestic flights. Passengers with laptop computers would use frequencies set aside for seat-back telephones. The commission also voted to seek public comment about ending the ban on using cell phones on airplanes. Time Warner agreed today to settle criminal charges of securities fraud, for $210 million. The U.S. Justice Department accused the company's America Online unit of helping smaller firms inflate earnings. The Associated Press reported Time Warner also offered to settle civil charges with the Securities and Exchange Commission. That deal would cost the company another $300 million. On Wall Street today, the Dow Jones Industrial Average gained 15 points to close at 10,691. The NASDAQ rose more than two points to close above 2162. That's it for the News Summary tonight. Now it's on to: An Iraq update; the president's economy; street stories; going even more wireless; and a Richard Rodriguez essay.

UPDATE - STRUGGLE FOR SECURITY

JIM LEHRER: On Iraq, Margaret Warner spoke with Washington Post foreign reporter Anthony Shadid in Baghdad a short time ago.

MARGARET WARNER: Anthony Shadid, welcome. Today of course, was the deadline for candidates to register for the Jan. 30 elections. What do the registrations, the way it all panned out, tell you about the political lay of the land as this campaign really gets under way?

ANTHONY SHADID: Well, I think you're seeing three coalitions that are going to command the most attention right now. The first coalition is the one that was-- I guess "inspired" would be the right word to use-- by Grand Ayatollah al-Sistani, who's the... one of the most influential religious leaders in Iraq. He has one list that's put forward four candidates. There will be another list supported by the interim prime minister, Ayad Allawi, and then a third list by the Kurdish parties, two of the most powerful Kurdish parties in northern Iraq. I think those three lists are going to be the ones that gain the most attention, though notably what you had today is some degree of Sunni participation now. Now, while the influential groups among Iraq's Sunni Muslim minority have called for a boycott, though you do have Adnan Pachachi, a long-time Sunni politician, entering the election with his list as well as the Iraqi Islamic party, which has a lot of strength in Mosul, a conservative traditional party, but it's also put forward, I think, 270 candidates to participate in the election as well.

MARGARET WARNER: Does that signal to you that the Sunnis are going to participate?

ANTHONY SHADID: Well, there is going to be some Sunni involvement in the election. In other words, there will be some lists that will be, you know, composed of Sunni candidates. I think the key question here is whether you have Sunni participation in the election itself. In other words, will people in Fallujah, say, or Samarra or Tikrit or Mosul, will they actually go to the polls? And the way things are right now, it's hard to say. It's hard to see a lot of people going to the polls. I mean, there's a lot of fear out there. You have insurgent leaders being very clear in their threats of attacking polling stations, attacking candidates that are campaigning as well as people who go to cast their votes. That fear is hard to overstate in some of those villages and towns there, and unless the security improves pretty dramatically, it's hard to imagine that you are going to have a high degree of participation in those areas.

MARGARET WARNER: Back to the violence, there was that attack today in Karbala and a top aide to al-Sistani was wounded. Who is believed to be behind that attack and how does it fit into the pattern of the violence lately?

ANTHONY SHADID: You have so much here it is hard to pinpoint who is behind it at any one point. You can see all kinds of possible scenarios here. It could be an inter-Shiite battle. It could be people aligned with Zarqawi, Abu Musab al-Zarqawi, a Jordanian militant who in the past has threatened to try to attack Shiites targets in hopes of igniting sectarian conflict here. From what we're hearing in Karbala is people are accusing Sunni militants of carrying out this attack, but, you know, the representative in Karbala obviously had his own enemies or competitors among the Shiite community as well. I think when people heard news of this attack, which was ten people were killed, it happened right next to one of the most sacred shrines for Shiites on the first day of the actual beginning of the campaign, I think a lot of people were worried that this is the beginning of what a lot of people here fear will be pretty relentless violence in the lead- up to the election on Jan. 30.

MARGARET WARNER: You just returned, Anthony, to Iraq last month, as I understand it, after being away for about five months. How does the security situation compare now with when you left?

ANTHONY SHADID: It's worse. There's no question about that. Baghdad's a pretty grim place right now. I do have to point out that it is better than it was a month ago. There aren't the level of kidnappings and the level of attacks going in on Baghdad that you saw probably before the attack on Fallujah by the U.S. Military. Whether that's just a lull in what we've seen as a pretty methodical escalation in violence since the occupation began, you know, that question is tough to answer. But there is a lot of fear, in fact, and I think there's a lot of frustration also. When you talk to people, I don't think the threat is sensed as much from the car bombings or the fighting that occasionally erupts in the city, but rather from just the lack of services, which has colored sentiment since the very beginning of the occupation. Gas lines stretch for a few miles sometimes at some gas stations, people waiting overnight to fill their cars up. There's a lack of kerosene right now. There's still pretty persistent blackouts and although winter in Baghdad is pretty mild, it still gets cold at night, and it's definitely created some hardship in people trying to stay warm. So I think when you talk about a city that is relatively grim, that is pretty grim and disenchanted, I think it's more a reflection of those lack of infrastructure or basic services than the specter of violence, which still does lurk very vividly at times here.

MARGARET WARNER: Finally, you reported today and there have been more stories about it that proceedings, some kind of legal proceedings, are going tobegin against some top lieutenants of Saddam Hussein as early as next week. What are those proceedings going to be like and how do you explain the timing?

ANTHONY SHADID: Well, the proceedings themselves are probably going to be more akin to an investigative hearing. In other words, the formal trial isn't expected to begin next week; that might wait until January. Just, you know, a quick sampling of sentiments in the streets. There were people suggesting that these trials are being maybe pushed ahead a little faster than they would be otherwise because of the election, and that Allawi's government hopes to gain some instant profile, I guess, among the electorate for putting these people accused of war crimes before a court. It's a question, though, and how much support he would actually get from the trials themselves. There is sure to be an element of theater there, I think. And we've already seen suggestions of that. Eight of the detainees have gone on a hunger strike, although that's just one day. But they could very well use the forum, playing to an Arab audience that has, I think, a little different experience with Saddam's government than Iraqis did themselves. So it's hard to predict exactly how those trials will play out.

MARGARET WARNER: All right, Anthony Shadid, thanks so much.

ANTHONY SHADID: My pleasure.

FOCUS - THE OWNERSHIP SOCIETY

JIM LEHRER: Now, the president's second term economic vision. Gwen Ifill has our look.

GWEN IFILL: During the campaign, President Bush and Vice President Cheney coined a new phrase to describe the economic promise of a second term. They said they would create an "ownership society," one that would lower taxes and shift more of government's burden to individuals.

PRESIDENT GEORGE W. BUSH: I believe our country can and must become an ownership society. When you own something, you care about it. When you own something, you have a vital stake in the future of your country.

GWEN IFILL: Although no details were provided, the plan emphasized four main principles: Streamlining the tax code --

VICE PRESIDENT CHENEY: To help families and small businesses we'll lead a bipartisan effort to reform and simplify the federal tax code.

GWEN IFILL: Reforming the legal system,

PRESIDENT GEORGE W. BUSH: You've seen the costs of frivolous lawsuits. Ask your small business neighbor what it's like to try to provide health care when the costs are going up because of these frivolous lawsuits.

GWEN IFILL: Allowing individuals to invest part of their Social Security savings in private accounts,

PRESIDENT GEORGE W. BUSH: We must allow younger workers to save some of their own payroll taxes in a personal savings account that earns better interest, a personal savings account they call their own and an account the government cannot take away. (Applause)

GWEN IFILL: And creating savings accounts to widen access to health care,

PRESIDENT GEORGE W. BUSH: These are accounts that allow somebody to buy a low-premium, high-deductible catastrophic plan and couple it with tax-free savings. This is the way to make sure people are actually involved with the decision-making process on health care.

GWEN IFILL: At today's meeting in Washington, handpicked economists, business leaders and policy makers gathered to endorse those White House policy prescriptions. Vice President Cheney opened the forum.

VICE PRESIDENT CHENEY: For four years now, President Bush has pursued an agenda that put a recession behind us and kept the economy strong.

GWEN IFILL: One panel focused on how lower taxes can jumpstart the economy.

SPOKESPERSON: I would add one more thing to that and that is the need for a stable system. A broader base, lower rates and a more neutral system would meet the president's goals which I think are the goals of all of us for a simpler and fairer system that would do a better job of promoting economic growth. (Applause)

GWEN IFILL: This afternoon, President Bush chose to take part in the session on the issue of legal liability reform, one of the staples of his reelection campaign.

PRESIDENT GEORGE W. BUSH: One of the things that I talked about was making sure that the environment for risking capital was conducive for job creation. And I tried to say that as plainly as I could. And one, one issue that I talked about to make sure that -- that costs were reasonable, and that the cost of capital was reasonable, was legal reform.

GWEN IFILL: The meeting continues tomorrow with discussion of another controversial proposal: Social Security reform.

GWEN IFILL: Now, for some analysis of the president's rosy vision for the nation's economic future. William Spriggs is an economist and senior fellow at the Economic Policy Institute here in Washington. And Brian Wesbury is the chief economist at Griffin, Kubik, Stephens and Thompson, an investment bank in Chicago. He was a member of the opening panel at today's conference.

GWEN IFILL: William Spriggs, let's start with you about the definition of an ownership society. Watching this campaign, and watching what the president has had to say about this, what is your interpretation of that?

WILLIAM SPRIGGS: Well, I think there are some things that we would like to see people have greater ownership of. We certainly want to see home ownership increase in this country. But there are a lot of things that the government does today, which are in place because the market is not a good allocator of resources or because what the government is really doing is serving as an insurer; and in that role the government does best when we include everyone, and that's best done as a government program. So the president talked about health insurance as an example. And we see from our current system of health insurance that that doesn't work when you make it an ownership society, because if I want to sell you health insurance, then I want to have the low risk population. I'd love to sell health insurance to a work force that's 20 something and very healthy. I don't want to sell insurance to people who are low income, more likely to be ill, and we see that there are gaps in who has health insurance because of that. So as a nation, we pay a lot for health care and in health insurance, but we get a small amount of coverage and we don't have the life expectancy in this country that other countries have who have a different way of thinking about health insurance. So that's an easy example to see where, on your own, you might not get the outcome that you can get if, as an insurance question, you broaden the pool.

GWEN IFILL: Brian Wesbury, what is your definition of ownership society and whether that's a good or a bad thing?

BRIAN WESBURY: Well, I think the ownership society is a very good thing. We have to remember that the more people have a skin in the game, have a stake in society, have assets built up over time, the less difficulty society will have withstanding bad times. And there are lots of different ways that we can do this. The American Dream Down Payment Assistance Act was signed into law of December 2003, and my belief, my take on this act... and just to describe it, it allows people that earn less than 80 percent of the median income in a region, in a city or a locality, to get a government-sponsored down payment, 10 percent of the value of the house -- or $10,000 or 6 percent of the value of the house to help them purchase their first home. And I believe what this does is it allows the government's spending to be put toward a use that will build assets and build ownership and build personal responsibility over time, rather than having that money being used to say subsidize a rent with no ownership and really no end in sight in many cases. And as a result, when people own assets, they have access to the credit markets. They're more likely to be entrepreneurs. All of this, I think, is a very good thing in the long run.

GWEN IFILL: Let me anticipate something that Mr. Spriggs might say to you, which is that this is the government sloughing off its responsibility on to individuals.

BRIAN WESBURY: Well, the individuals should have the responsibility in the first place. And I think that's point. That government should be there to catch those who fall and can't get up on their own. And what we've seen is that government, at least in my opinion, over the years, has grown into an enabler that, in fact, includes more people than it really needs to. It tries to help more people than it truly need help. And for example, Social Security or some of the systems we have put in place and Social Security in particular, in my view, because Social Security exists, I think two things happen: Number one: People probably save less during their working lives because they know Social Security will be there in the future. At the same time, those people who do invest also probably are more willing to take risks. In other words, swing from the fences with their investments because they say hey, Social Security will be there.

GWEN IFILL: Let me allow Mr. Spriggs to respond to this of this because it was Bill Clinton who said that the era of big government is over and certainly that seems to be the underlying theme we are hearing today. What is wrong with that?

WILLIAM SPRIGGS: Well, I think Social Security is a key example. And again the example of what happens in an insurance system like health insurance where we see that's just falling apart; it doesn't work. In the case of Social Security, we know that if you let individuals assess the risk of the economy and then start saving, when they think things are going to go bad, we get the behavior we don't want. We get reinforcing and exacerbating business cycles so people will think that the economy is more risky when it starts to turn down. They'll save more and we learned from the Great Depression, that's not a good thing. So we socialize these risks. And in the case of Social Security, what we're doing is we are insuring everybody from the three things which will happen to you as a worker. You may, God forbid, become disabled and can't continue to support your family. You may die young and your family again needs some support or God willing, you'll live a long life and you'll need to retire because you are not competitive in the labor market. And so by having it universal, we you have a risk pool which ensures that the program will hold together to ensure against those risks. When people talk about the retirement program, that's not what Social Security is. It really is an insurance against these downturns.

GWEN IFILL: I understand that but I also want to talk about some other things that the president touched on in his overview, and I guess I'll go to you first, Mr. Wesbury, which is the issue of tax reform and tax simplification. How does that become ownership?

BRIAN WESBURY: Well, I don't necessarily believe that the president tried to say tax reform was ownership, although what we have in this society is a tax system which punishes savings relative to consumption. And the way that it does that is that it double taxes dividends, it double taxes capital gains and as a result, many people -- typically Mr. Spriggs would be complaining that we are saving too little. I believe part of that is due to our tax system. I think another part of that is due to the fact that the government has put into place this Social Security system and many people believe it will be enough to support them in the future. And then one last point about that and it is that these systems are in trouble; the Social Security system is under funded by $10 trillion. Taxes have to go up to pay for it or benefits have to be cut to make it work. Something has to be done. And what the president is trying to do is say look, let's not raise taxes. Let's not cut benefits, let's find a third way, a way through this hole that allows people to build ownership, build a stake in the economy, to build a cushion for their future, and so that we don't have to change the system as it exists for those people that are in retirement or very close to it but gives the youth of America a way to build assets, a way to become owners and a way to become more personally responsible in the future.

GWEN IFILL: Mr. Spriggs, I'm going to give you a chance to say whether you agree with Mr. Wesbury's assumption of what you would think about this but also on this issue of tax reform, do you think these tax cuts should be permanent? Is that going to get the-- achieve the goal the president says he wants it to, which is to stimulate the economy?

WILLIAM SPRIGGS: Well, it is not going to achieve the goal. We've already seen his economic stimulus in place for these four years. We have fewer people employed today than when he took office and when he gets sworn in in January, we will have fewer people than when he got sworn in, in January four years ago. So the direction in which he has put the tax cuts have not been the stimulus the economy needed, not from the perspective of the American worker. But in the case of Social Security, again, what you see is now the president has created this own problem himself. His tax cuts have made permanent are far bigger than the problem that we face in Social Security. If we just said we are not going to make the tax cut to the top 1 percent of the country permanent, that solves the whole Social Security program as it is currently conceived. You could say you are going to keep the benefits. You are going to keep everything the way it is, just say we are not going to make permanent that top 1 percent, so he has created his own problem. He exacerbates it because if you want to privatize, you are going to take money out of the system, which exacerbates the need to have money put into the system. And many people who talk about privatization of course really don't put together how are you going to not cut benefits if you are not going to raise taxes? It doesn't solve itself simply through privatization. And you can't really privatize the risk of a disability and the insurance program which are integral to the program. And it is a family-based program. It is not an individual program at the moment.

GWEN IFILL: Okay, Mr. Wesbury, I also want to move on to one more thing before we run out of time, which is this issue of legal reform. The president madea point of showing up personally at the conference to make his point that there is this inter-connectedness between high health care costs, for instance, and liability costs. What is your sense of that?

BRIAN WESBURY: Right. Right. Well, I personally think that's a real good idea. Let me go back one step here and just remind Mr. Spriggs that the election is over, the president won. The debate on the tax cut is done. People do not want higher taxes. That's not going to happen. In fact, we are going to be debating making these tax cuts permanent and tax reform in the future....

GWEN IFILL: Excuse me. Were you advocating higher taxes, Mr. Spriggs?

WILLIAM SPRIGGS: I was saying that we shouldn't make a tax cut permanent which is not necessarily higher taxes.

GWEN IFILL: We don't want to really re-debate that issue. We should get back to legal --

BRIAN WESBURY: That's my whole point. It's over. The tort reform issue... the whole idea about creating more growth in the economy is that we always need to lower risk and increase rewards in the economy and that's the way you encourage more entrepreneurial activity. That's what makes the United States so great. America is the strongest economy in the world -- we are technology leaders. And to lower risk and raise rewards you have to attack a number of things. Number one: Taxes are a punishment to those who are successful very often. So what we have to do is move to lower after tax - or, excuse me higher after tax returns. And I think that's what the tax cut last year did. We need to lower risks for investors, part of that is fighting the war on terror and making the world a safer place. But another part of that is reforming the tort system, the litigious society we have because there are so many risks to businesses in this country coming from the legal sector, which raises costs and lower returns and I think that becomes an important part of making sure this economy stays strong for the long run.

GWEN IFILL: Mr. Spriggs, you have a chance to reform to that question about legal reform.

WILLIAM SPRIGGS: Well, I would say this, that we have set up a system in which litigation plays a role in correcting bad behavior for businesses because the cost of their errors are not borne by the company itself. So if you think of tobacco and what damage that did to our economy in terms of needless people-- needless numbers of people dying from tuberculosis, from lung cancer, et cetera. So if you think about that and then look at the recent withdrawal of an arthritis pain reliever, because the company understood that they were going to face litigation, meaning that we wouldn't have needless doubts in that case, but tax reform has to be fair. We heard that word before about making it fair. The economy has worked the way the economy wanted it and that is that the returns of all of the growth in the economy has been to capital income, not to American workers. To shift the tax burden further on to the American worker means that we are putting even more burden on the American worker.

GWEN IFILL: Okay. William Spriggs and Brian Wesbury, thank you both very much.

BRIAN WESBURY: Thank you, Gwen.

JIM LEHRER: Still to come on the NewsHour tonight, a homeless story, a wireless future, and a Richard Rodriguez essay.

FOCUS - STREET SENSE

JIM LEHRER: During this holiday season, some homeless people are trying to tell their story in a new way. Media correspondent Terence Smith has our report. (Church bells ring)

TERENCE SMITH: It's early morning and 10,000 new copies of Street Sense are going on sale. The year-old monthly paper is produced by and for the homeless community in Washington, DC. The all-volunteer effort is compiled at the offices of the Episcopal Church of the Epiphany in downtown Washington. There are 40 street papers in the United States and Canada, Real Change in Seattle, Street Wise in Chicago, Street Sheet in San Francisco, Spare Change in Cambridge, Massachusetts, and Big News in New York City; 100 such papers are published worldwide. Washington, with one of the largest homeless populations in America, did not have a paper until two local journalists, the paper's co-founders, Ted Henson and Laura Thompson Osuri, found a similar inspiration. They'd been struck by the idea of starting a homeless monthly in Washington after reading such papers in other cities. Ted Henson:

TED HENSON: We were about two blocks away from each other but had to call some guy on the West Coast to find out about each other. So kind of serendipity, yeah.

TERENCE SMITH: Laura Thompson Osuri:

LAURA THOMPSON OSURI: I just thought this was, from my perspective, just a great fit and a great fit for the city as well because there are so many homeless people on the streets panhandling. And if you can give them a paper instead of, you know, just a cup it would help them a lot better.

TERENCE SMITH: Two of the vendors, James Davis and Jake Ashford, are trying to use the money they make to get a toehold back into the working world. They can make $100 a day, pocketing 70 cents on every paper they sell for a dollar.

SPOKESPERSON: Good morning, Street Sense, can I help you?

TERENCE SMITH: James Davis, who's been working for Street Sense for seven months, now recruits and trains fellow vendors as well as speaks to colleges and other groups about homelessness.

JAMES DAVIS: It's more than just a newspaper. It's more giving back in a sense of helping people, helping the homeless, and it's always a joy to see somebody's face light up when they say, "You know, you helped me. I've gotten a job through the paper; I've got my self-esteem back; you know, I feel like I'm part of the mainstream again."

SPOKESMAN: Help support DC's first newspaper by the homeless.

TERENCE SMITH: After graduating with degrees in electronics technology and computer science, he worked for NASA and British Aerospace Engineering among other large employers. But after he was laid off and following some personal problems, he found himself living on the street, sleeping in shelters and with relatives.

SPOKESMAN: It's given me a different perspective on the view of homelessness. You know, I see it from a different standpoint, whereas, when I was working and I was going on travel with my job, I would encounter homeless people on the streets in the big cities that I visited and, you know, I never really gave thought to how that person became homeless. I just never thought that it would happen to me.

SPOKESMAN: Help support the DC area's first newspaper by the homeless.

TERENCE SMITH: Michael Stoops of the National Coalition for the Homeless has been working with the paper and on the larger issues of poverty and homelessness for three decades. He says many Americans could be a few paychecks away from being homeless themselves.

MICHAEL STOOPS: People are not saving money like they used to be, and people are spending all the money that they earn. If you don't bring home a paycheck, you can be tossed out on the streets.

TERENCE SMITH: With 3.5 million people homeless in America over the course of a year, he says knowledge about poverty and new ideas to combat it are needed.

MICHAEL STOOPS: We see it as really a wonderful way to educate the general public about poverty issues. You pick up the Washington Post" and you occasionally see a story about poverty, welfare reform, but you don't see a lot of stories, and so a paper like Street Sense is a way to educate the people who live in Washington and also those thousands of tourists that come to the nation's capital.

TERENCE SMITH: Subjects in the 20- page November issue range from the effects of the election on poverty issues to the movement for affordable housing to an update on a Street Sense scoop: The closing of a homeless shelter to make way for an art museum. But the paper also features crossword puzzles, photos, book reviews, poetry and features on homeless vendors.

SPOKESMAN: Street Sense. Street Sense.

TERENCE SMITH: Vendors stake out certain areas around town where they know some of the regular customers. Jake Ashford worked for both the Department of Defense and Halliburton in the U.S. and abroad, among other jobs. Now unemployed, he has been on the street, sleeping in a Washington park, for the last three years.

JAKE ASHFORD: Sometimes I go for two to three weeks without having to go as far as wait for no food truck or something. You know, as far as with the paper, it gives me a chance to meet the working class people.

TERENCE SMITH: The co-editors who founded the paper, other professional journalists and community contributors work alongside homeless writers such as Patricia Henry.

SPOKESPERSON: The DC General Hospital, their cafeteria does not have hot water. That's the shelter where they're staying. And she asked me to pass this along to Street Sense.

SPOKESMAN: Obviously, it's depressing, and you know, you don't want to candy-coat it. You want to tell it how it is, but through offering a more diverse array of content, I think that helps you see the gravity of the situation.

TERENCE SMITH: James Davis writes articles and poetry for the paper. This poem, called Mother Nurture, earned him positive reader reaction.

POEM BEING READ:

Hope turns to despair

While they gather

At a place called SOME.

The men with worn

Look of life on their faces.

A young mother enters

The line to get food

For her poverty-imprisoned

Children

TERENCE SMITH: August Mallory came to town from South Carolina six years ago and lived at three different shelters. The paper helped him regain his financial footing and housing.

AUGUST MALLORY: He says, well, you get your first ten or twenty papers free. You go out, you sell those and when you come back, you can buy more. So I did that quite a few times, and I was able to earn up enough income where I could put it aside and find me a place to live and get me a permanent job.

TERENCE SMITH: He now does seasonal work for Marriott Hotels and works on his own mail order business. But he still sells the paper and writes a column on homeless services in Baltimore and contributes a fictional series.

SPOKESMAN: You never know if a person has a dollar or two in their pockets.

TERENCE SMITH: At this meeting the night before a national homeless march in Washington, the Street Sense vendors gathered to talk about their product and how to market it.

SPOKESMAN: Target everyone: Black, white, Puerto Rican, Jew, handicapped, children, everybody. Don't just judge a person.

TERENCE SMITH: On the day of the recent march, vendors gathered their papers and hit the streets.

SPOKESMAN: Street Sense!

TERENCE SMITH: James Davis was able to sell almost 100 papers and promote the Street Sense brand.

PAULOORDOVEZA: An issue of Street Sense was an important factor in my deciding who to vote for.

JOYCE THOMPSON: You look at a homeless person and you might at first think they're like a bum, whatever. But these are very educated people and they come from all walks of life.

TERENCE SMITH: $25 yearly subscriptions and donations supplemented by limited advertising keep the paper afloat. The founders say they'd like to see the paper's coverage bring about change over time.

TED HENSON: We'd like to make sure everybody in Congress and the Senate has a copy and all the local councilmen as well. That's something I think it takes time to do. What we'd like to see ultimately is that we have enough PR in the community where people know about us and they know what it's about. And so, they're more willing to buy the paper or at least engage in conversation, like, "that's a good project" or "no, I hated the article on page three." At least they converse about it.

TERENCE SMITH: And with 800,000 Americans homeless on any given night this holiday season, the issues Street Sense covers won't be going away.

FOCUS - WIRELESS FUTURE

JIM LEHRER: Now, the newest merger in the cell phone business, and its impact. Ray Suarez has that story.

RAY SUAREZ: Sprint and Nextel made it official today. The two companies have agreed to merge, creating the nation's third-largest wireless phone provider. If approved by regulators, the new company will be known as Sprint Nextel, with more than 35 million customers. This isn't the first merger for the industry. Earlier this year, Cingular became the number-one provider when it acquired AT&T Wireless for $41 billion. Verizon is the second-largest wireless provider. What is the significance of this merger and what does it say about the telecommunications industry? For that we get two perspectives. Rudy Baca is a wireless and media analyst at Precursor, an investment research firm, and Gene Kimmelman is director of the Consumers Union here in Washington.

Rudy Baca, in the case of these two particular companies, Sprint and Nextel, what do they want from each other? Why this marriage?

RUDY BACA: This marriage is one that fills gaps each have in their product portfolio. What Sprint has is it's got a wire line and wireless segment, so they have a long-distance network. They can provide a third generation that is a broadband service. Nextel, on the other hand, has a push-to-talk feature that is very, very popular with a certain market segment, but it doesn't really have any means to provide those broadband services. By coming together, they each can take the best of their disparate networks, put them together and offer a more complete product bundle.

RAY SUAREZ: And looking at the industry in a wider context, why are the giants merging with each other rather than trying to grow their own industry?

RUDY BACA: Well, there are two reasons for that. One, with the penetration rates that we have, subscribership levels in the U.S., essentially growth is going to come from poaching the customers of their competitors because they've reached high levels now. 80 percent of the American consumers, the target age groups, already have a cell phone. So what they're trying to do is attract customers with a better product bundle. Number-one Cingular, number-two Verizon are providing these broadband services or beginning to provide them. Sprint needs to move quickly and Nextel needed to find a way to do so.

RAY SUAREZ: Well, we've heard the business rationale, Gene Kimmelman. If you are one of the tens of millions of people witha cell phone in your pocketbook or clipped to your belt, this is a good deal for you?

GENE KIMMELMAN: We are afraid it won't be a good deal. We are afraid it diminishes the level of competition. We've had enormous price reductions with five, six firms competing aggressively, trying to poach, as Rudy says, in the cell phone business, bringing prices down, offering new packages. But when the government allowed Cingular to buy AT&T Wireless, it effectively signaled that it was willing to accept just three players in the wireless market in every local community. And that is why Sprint and Nextel are getting together. It is survival but the problem for the consumer is less competition, less aggressive rivalry between these firms. And we are afraid we are not going to see those prices continue to come down. In firms with three players, in markets with three players, for example, you have cable and two satellites, look what has happened. When was the last time consumers saw a cable rate reduction? Prices are going up three times inflation. We certainly hope cellular doesn't become what cable and satellite have been for consumers.

RAY SUAREZ: But Rudy Baca just posited a world where they grow by competing for each other's customers. Don't they have to use price and technical innovation to do that?

GENE KIMMELMAN: When there are enough companies there, they certainly do, but as Rudy's firm has said, when there are only two or three major players, they tend not to compete on price. Yes, you may get some new features. Yes, you may get some new services, and I certainly hope Sprint and Nextel will move toward a broadband offer, but look at the two other players in wireless. Verizon Wireless is owned by a wire-line company. They were supposed to be competing wireless versus wire line. They have broadband, local phone service, they have long-distance phone service. AT&T and MCI are virtually disappearing from long distance. The other major company, Cingular, is owned by SBC and Bell South, major dominant local wire line companies, offers the full package of service, dominates in the South, Midwest and California. I hope Nextel Sprint can come together and offer something, but they don't have the full package of services. They won't have it for a few years. I'm afraid this is a Hail Mary effort to make the companies survive but, again, not price reductions for consumers. Consumers may have to change their telephones now, buy new phones because the technology of these two companies is different. The government has, I think, in effect created a mess here by taking what was a vibrant competitive market and making it less and less competitive.

RAY SUAREZ: Rudy Baca, Gene Kimmelman raises an interesting point. This is the first big merger between two companies that use different technologies to run their systems. Is this going to cost big money as much as they achieve a certain economy by marrying?

RUDY BACA: It would if they actually tried to blend both of those disparate technologies into one system. I think they're much smarter than that. Basically what they are going to do is they're going to take Sprint's transmission technology, and they're going to build a next generation broadband network on that technology using one spectrum slot. Nextel is going to continue to provide its distinct proprietary push-to-talk service on a separate spectrum slot. Basically what they run is what's called a dual band network. You can integrate them on the handset so that it is actually transparent to the consumer, but the network is actually two networks run simultaneously, and Sprint has shown they can do that.

RAY SUAREZ: What about Gene's wider point: that having three companies control 75 percent of the cell phone business is just by its nature not good for consumers?

RUDY BACA: I think what they do is they run through the department of justice and they look at the competitive effect. They have indices they are required to run through. I think you are forgetting that cable is moving into a voice application. It is very, very cheap.

RAY SUAREZ: What does that mean?

RUDY BACA: It means that your cable company can provide you not only video but voice service. It can be your phone company. It is very cheap for them to do it. So it is going to be part of what they offer as their product. There are also other technologies: Wi-fi, Wi-max, there's this whole alphabet soup. Basically it means that some municipalities are actually providing service free wireless Internet access free into certain areas. You are going to get broadband from a number of different providers, and the FCC recently approved providing Internet access over power lines. Every home that has an electrical outlet potentially has an Internet connection. So if you focus on only three, you are missing the larger and more competitive aspect.

GENE KIMMELMAN: What Rudy is missing is that to get the cheap cable phone service, you have to pay $40 or $50 for cable modem service, and then your cable package and video programming another $40. It is all very expensive. It might be something for the top end of the market but not the average consumer. Every major company is trying to fight these localities trying to build out Wi-fi networks. So the government is effectively abandoning a strict antitrust policy and is hoping somebody else will come. But how can someone come and play against companies that have local, long distance, mobile, broadband service and brand-name recognition with 90 percent of the market where they were a local monopoly.

RAY SUAREZ: Well, what about Rudy's point that phones won't be competing against phone services in isolation, that because of other kinds of products and other kinds of technology, phones will have to stay competitive by staying cheap?

GENE KIMMELMAN: That's fine if you don't mind a digital divide. We only have 20 percent of the country that gets broadband service today. They may be able to get a combination package with cheap offerings from the new providers. Everybody else is stuck paying a lot more and now we are losing competitors. It's not a good deal for consumers.

RAY SUAREZ: Does this continue, though, when you look at the range of companies that are still standing now? And I guess number four after this new Sprint Nextel is T- Mobile, which is part owned by a German concern

GENE KIMMELMAN: I think this just continues. That's why we are virtually giving up on the government solving this problem. Tomorrow we are launching a new website called hearusnow.Org, which gives consumers tips on how to navigate the markets, get the best deal and push back against itself companies. The government is doing something to prevent the companies from combining and potentially raising prices. It is going to be up to the consumers to use their own marketplace prowess here and push back and demand that every telephone works with every company and demand that they offer new services when they claim they're going to do so and push back on the government to deliver the promises that these companies always claim are going to come.

RAY SUAREZ: Rudy Baca, before we go, do you think a consumer who is willing to shop around, compare rates, compare companies, can still and will still be able to get a good deal when it comes to cellular?

RUDY BACA: I absolutely do. I think there are a number of options out there, and I think actually that it is not necessarily Sprint and Nextel that will come together. I think Verizon could make a play for Sprint, which would leave Nextel and T-Mobile as very aggressive competitors. They want your business and they're going to cut their prices and offer services to get it.

GENE KIMMELMAN: That would be worse for consumers if Verizon controls even more spectrum and is a local telephone monopoly.

RAY SUAREZ: Gene Kimmelman, Rudy Baca, thanks.

ESSAY -TIME AND THE INDIAN

JIM LEHRER: And finally tonight, essayist Richard Rodriguez travels back to the Aztecs to find a message for all time.

RICHARD RODRIGUEZ: The lesson of empires: One falls, another ascends. This winter, a Mexican branch of Wal-mart opened a store in the shadow of the Aztec's pyramid of the sun. ( Chanting ) Even as Mexicans wandered the bright aisles of Wal-mart, an exhibit of Aztec archaeological objects has opened at New York's Guggenheim Museum. As an American, a cultural descendant of English Puritans, I see this exhibit initially through Protestant eyes. These Indian gods seem as incomprehensible, as remote as Sumerian idols. Actually, the Aztecs were not an ancient people because we moderns tend to view Aztec civilization as the culmination of thousands of years of Indian civilizations in Meso-America, we confuse the end with the beginning. The majority of these artifacts date from the 15th century, closer to us in time than the medieval cathedrals of Europe. For me, the difference between Mexico and America is the difference of time and the Indian. As someone related by blood to the Mexican Indian, I must read history in the Americas as continuous, not, as the Puritans imagined, a fresh start. What would English Protestants have thought, how would they have proceeded in the new world if they had come upon such epic stones at Plymouth Rock? The Puritan conceit-- that America was virgin land, that Indians were marginal to European settlement, that Puritans were new Adams, new Eves-- all such innocence about history would have been impossible in the face of the Aztec capital, Tenochtitlan. In Mexico, these stones are not gravestones, but reminders of all that existed before and ahead. Mexico knows that the Indian is alive, is even today, for example, illegally trespassing America's border and entering our sovereign history. And look! In this stone is my profile. Aztecs were consumed with awe. These carvings describe a pitiless world, a world without mercy. Fertility is a constant theme, but there is no image of eroticism. The only description of emotion is this dog, but the emotion cannot be described. The ramps of the Guggenheim ascend. Everything circles around religion and death and the obscene knowledge of the skull beneath the skin. The Aztec seems held by the dialectical: Earth and sky, animal and human, human and divine. Aztecs were held by duality and by metamorphosis. Animals appear as messengers of the gods; gods take animal forms; humans appear in animal guise. This warrior wears a helmet in the shape of an eagle, or is this an eagle taking the shape of a man? For all the beauty and majesty of their civilization, history attaches a notorious decadence to the Aztecs. To appease unpredictable gods, Aztecs sacrificed thousands of Indians from neighboring tribes, cut their beating hearts from their bodies with obsidian knives. To contemplate the religious art of such a people is to recognize that religion is not only something that can ennoble our humanity; religion sometimes is a dangerous preoccupation, a madness. I do not think, after all, the Aztecs would be appalled to learn that a few miles from this museum thousands of people were recently slaughtered in the name of god, or that now in so many parts of the world-- Pakistan, Israel, Palestine, Iraq, India, Africa, America-- religion is made into a knife. Despite their metropolitan culture, a city of floating gardens, despite warriors of fame and skilled engineers, the Aztecs were finally defeated by a band of Spaniards and their Indian allies. To mark the end of one empire and the conquest of the next, there is this cross, incorporating religious images of the Aztec and European Christianity. As the Mexican Indian would tell us, empires come and go. What persists is the blasphemy of believing that murder is prayer. I'm Richard Rodriguez.

RECAP

JIM LEHRER: Again, the major developments of this day: The campaign for Iraq's Jan. 30 national election formally began. The U.S. Army announced it will spend more than $4 billion dollars in the next six to eight months, to put more armored vehicles in Iraq. And Sprint announced it's buying Nextel, creating the nation's third-largest wireless phone provider. We'll see you online and again here tomorrow evening. I'm Jim Lehrer. Thank you and good night.