The NewsHour with Jim Lehrer

MARGARET WARNER: Good evening. I'm Margaret Warner. Jim Lehrer is away. On the NewsHour tonight: A summary of today's news; President Bush's proposal to protect workers' 401(k) plans; problems and possible solutions in one state's unemployment benefits plan; Friday night analysis by Mark Shields and David Brooks; a conversation with Supreme Court Justice Sandra Day O'Connor about her new book, "Lazy B"; and the poetry of Langston Hughes.

NEWS SUMMARY

MARGARET WARNER: The nation's unemployment rate fell slightly in January. The Labor Department reported today it dropped 0.2%, to 5.6%, but analysts said that was mostly because more than 900,000 jobless Americans quit looking for work. Businesses cut another 89,000 jobs in January but that was a big improvement over the previous months. Separately today, a closely watched index of business activity showed that manufacturing held nearly steady in January after 17 months of decline. At the White House, President Bush said the economy still needs help.

PRESIDENT GEORGE W. BUSH: We've still got problems. The economy is still soft. Too many people aren't working. There's not enough job creation. And I believe, like I said in the state of the union, we need a stimulus package. Until Americans can find steady work, I am going to be relentless in my desire to enhance economic growth. That means jobs. We've got to work with Congress to figure out how to enhance economic vitality. There are some positive numbers, but not enough positive numbers to satisfy me.

MARGARET WARNER: Last week, Federal Reserve Chairman Greenspan questioned the need for a stimulus package. The President today urged Congress to change pension laws to protect workers' retirement savings. It was his first major policy response to the collapse of Enron, which nearly wiped out many employees' 401(k)S. The President said workers should have greater freedom to diversify their accounts. We'll have more on this story right after the News Summary. The United States is still open to a peaceful dialogue with Iran and North Korea, the President said today, but he once again defended his charge that those countries plus Iraq form an "axis of evil." Former Secretary of State Albright said today that "lumping those three countries together is dangerous." She told NBC that each country was different and dealing with them required more nuance. Another videotape of Osama bin Laden surfaced last night. CNN aired excerpts of a never- seen interview he gave to the Al-Jazeera network in Kabul last October. Bin Laden gave ambiguous answers about planning the September 11 attacks on the U.S., but said Islamic law allows for killing civilians. Al-Jazeera, which hasn't said why it didn't air the interview, today cut ties with CNN for broadcasting the tape. Two days of fighting subsided today in a provincial capital in southeastern Afghanistan. The factional warfare in Gardez was the country's worst since an interim government was installed in December. At least 61 people were killed as the new provincial governor tried but failed to seize Gardez from a local commander. There were conflicting reports today about the fate of Daniel Pearl, the "Wall Street Journal" reporter missing in Pakistan. A new e-mail to western news organizations said his kidnappers had killed him, but Pakistani police said the kidnappers called the U.S. Consulate in Karachi, demanding $2 million and the freeing of a senior Taliban official in return for pearl's release. Amtrak today threatened to eliminate all money-losing train routes in October if Congress doesn't give it $1.2 billion next fiscal year. That's more than twice its current budget. The 18 discontinued routes would not affect the Northeast and West Coast corridors. Next week, a Congressionally appointed council is expected to recommend breaking up Amtrak, and opening passenger rail service to competition. That's it for the News Summary tonight. Now it's on to: Fixing 401(k) plans; expanding unemployment benefits; Shields and Brooks; Justice Sandra Day O'Connor; and a Langston Hughes poem.

UPDATE - 401 (CHAOS)

MARGARET WARNER: First tonight, the President's proposal to avoid repeating the calamity of Enron's retirement funds. Kwame Holman begins. (Applause)

KWAME HOLMAN: President Bush chose an audience of Congressional Republicans on their winter retreat to propose a set of reforms for private retirement accounts.

PRESIDENT GEORGE W. BUSH: If you're corporate America, you're responsible for making sure you reveal all your assets and liabilities to your shareholders and your employees. (Applause) So part of the ushering in the "responsibility era," not only from the individual basis but on the corporate basis, I have proposed some pension reform plan... Pension reforms I would like to outline briefly for you today, and ask you to take them up as quickly as possible. Employers should be encouraged to make generous contributions to workers' 401(k) plans. It's a positive development when employers give stock to people who work for them. About 42 million workers own 401(k) accounts with a total of $2 trillion in assets. And that's a critical part of retirement security for workers all across America. But workers should also have the freedom to choose how to invest their retirement savings.

KWAME HOLMAN: The President never used the word Enron, but his reform plan widely is seen as being prompted by the giant energy trading firm's collapse last year. As the company headed for bankruptcy, the retirement savings of some 12,000 Enron employees were wiped out because their savings plans, known as 401(k)s, were heavily invested in Enron stock. In all, Enron workers lost nearly $2 billion. The President's plan would require companies to provide employees with more frequent updates on their 401(k) plans; require 30 days notice prior to "blackout periods" during which workers are prevented from selling stock in their retirement funds; increase employer liability if the company's stock price falls during a blackout period. It also would forbid company executives from selling their stock during "blackout periods" if other workers are not allowed to do so, and give workers greater flexibility to diversify their 401(k)s after holding them for three years. In Washington, the office of Senate Majority Leader Tom Daschle issued a statement criticizing the President's plan. It said: "Regrettably, the Administration's plan would do little, if anything, to restore public confidence in the private pension system. The Administration's proposal actually addresses only a small part of the problem - and does that inadequately." Meanwhile, a spate of pension reform bills already is being worked on in Congress, even as hearings continue on what happened to the retirement savings of workers at Enron.

MARGARET WARNER: Ray Suarez takes it from there.

RAY SUAREZ: And for more we turn to James Delaplane, vice president for retirement policy at the American Benefits Council, which represents employer interests in Washington; Mark Machiz, former Associated Solicitor at the Labor Department in the Clinton administration - he's now a partner with a Washington law firm; and Steven Sass, a research associate at the Center for Retirement Research at Boston College.

RAY SUAREZ: James Delaplane, what did you find significant about the President's proposals today, and what was your overall impression?

JAMES DELAPLANE: I think we were very gratified that the President rejected a number of the most aggressive proposals that have been put forward in Congress. For example, capping at a fixed percentage; the amount of company stock any single worker could have in their account, and then beyond that, a number of proposals that I think we can support with respect to giving workers additional information, greater notice about their 401(k) plans, trying to see that employers provide advice to the 401(k) investors. There are a couple of areas that he laid out today that we have some concerns about and some questions about - this issue of greater diversification rights for workers and potentially greater liability for employers. We think there are some careful issues that need to be analyzed there. We don't want to see any reduced matching contributions by employers as a result of some of these diversification changes, and we'd hate to see new liabilities frustrate the continued expansion of the 401(k) system. There are many American workers that still do not have a retirement plan, and we'd hate to see additional burdens and regulations prevent new employers from starting those plans up.

RAY SUAREZ: Mark Machiz, what would you want us to look at in the President's proposals today, and what are your overall impressions of the plan?

MARK MACHIZ: Well, my overall impression was to be profoundly disappointed with what the President has proposed because the proposal here really doesn't address anything that went wrong in the case of Enron. Basically what happened at Enron is the employees got wiped out because they were massively invested in Enron's stock and they were massively invested in Enron's stock primarily as a result of their own choice, not because they were - not because they were locked in and not because they didn't have power with the executives in terms of their ability to move out of the stock. The proposal that's been given to us today does absolutely nothing to protect workers from finding themselves in exactly the situation that the workers at Enron were in, which is to be massively over committed to a single stock and subject to all of the - all of the terrible things that happened, regardless of whether a company goes under because of fraud or because of simple financial reverses.

RAY SUAREZ: Regardless of whether this would have addressed the Enron situation, are these improvements in 401(k) plans?

MARK MACHIZ: I would say they are improvements of such a marginal fashion that they serve more to cover up the very real problems that exist than they do to solve anything. I don't think the problem is that people can't get out of their employer match. I think the problem is that people faced with the opportunity to invest in only a single stock, and that which is their employer's stock, and otherwise are given safe and responsible alternatives too often choose to swing for the fences, to try and beat the odds and leave themselves open to being sorely disappointed. We haven't addressed that problem here today. We will not prevent another Enron. There will be another Enron in short order if the President's proposal is all that's enacted.

RAY SUAREZ: Steven Sass, is there a history in this country about responding to political or fiscal crisis in the system with pledges or proposals for reform?

STEVEN SASS: Yeah. Probably the Studebaker example is the one that's most prominent in the history of pension plans. In some ways, it was very similar that you had workers who really had all their assets taken out of a pension plan prior to retirement, and they were left with very little. This event caused a series of discussions and debates, which ultimately led to ARISA, which is the basic law governing pension plans today. Prior to that in the 1920s, there was a private company called Morris Packing that went bust that had a similar effect and that actually that led to a private reform of pension plans at that time. My take on the Enron case is really much closer to Mr. Machiz's view, that I think that we really should look at the entire 401(k) institution at this time from a much broader perspective. I think most people would think that it is a great success, it has done wonderful things, it's a good solid institution. I think the other point that Mr. Delaplane made that we have to be careful about making it comfortable for employers to start these plans is another important point that has to be included. But the larger issue about how much risk we should have in these plans is one that really does need to be addressed. These are plans that are-- that use a lot of government subsidy in terms of the tax benefit they get and how much risk we have in these huge plans, which, as was mentioned, was $2 trillion, are in these plans. They're a fundamental part of our retirement income security. And whether it's company stock or even a high-risk growth fund, that might be okay, but we have to really think about whether these plans are suited for retirement income security. And there's just one other issue, which I think has to be thrown in when we look at these plans. It's the whole issue of annuitization. The people at Enron have two problems. One is that they have a very small amount of money. The second, if they wanted an annuity or live off the interest today, the interest rates currently are quite low. So the ultimate goal of a 401(k) is not to amass a large amount of money but it's to provide retirement income over 20 or more years of your life. We really should take a broader view as to whether this institution is properly designed to meet those public objections.

RAY SUAREZ: Let me go back to Mr. Delaplane because at the outset you said you were glad that there weren't more restrictions put in. Steven Sass points out that the government has oversight in return for the fact that this money is gained by the employee tax free.

JAMES DELAPLANE: Sure. And clearly the 401(k) system already has substantial regulation. You raised the question of our pension laws have often responded to a particular situation: Studebaker in the past, Enron today. I think there is a danger from that. Enron is a single situation, clearly an aberration. The 401(k) system generally is very successful and unfortunately the past history in reaction to Studebaker, we layered on so much regulation of traditional pensions that those pensions have dramatically declined since 1974 when the original pension statute was passed.

RAY SUAREZ: And by pensions you mean employer funded -

JAMES DELAPLANE: Employer provided traditional defined benefit pension; those have declined for more than 175,000 in the mid-'80s to less than 50,000 today. We're just fearful that if we're not cautious and deliberate about the changes today, we might over regulate 401(k)s in the same way. And that could be very damaging. And I think I take a little issue with Mr. Machiz's point. I think there are some very concrete things the President said today that will help workers manage that risk, exercise that responsibility, that we've heard discussed. There will be new disclosure tools that will talk about the importance of diversification. There will be the removal of some barriers that have prevented employers from getting professional advice to 401(k) investors. We heard a panel of witnesses in Congress several weeks back from Enron. The one gentleman who did not really suffer significant losses was someone who had retired about a year ago and went to see a financial planner. And that person said to him, you're too concentrated in Enron stock; we need to diversify your portfolio into a number of other options. And he suffered a very modest loss this year as opposed to the retirees highly concentrated. So getting professional advice to individual 401(k) investors really is part of the strategy to prevent future Enrons.

RAY SUAREZ: Mark Machiz.

MARK MACHIZ: I think it's important that we realize that the investment advice bill that the President is talking about is another example of solving a problem that doesn't really exist. Right now everybody has access to investment advice, and employers are free to provide investment advice to their employees. What the bill under consideration does is simply make it clearer that even though the particular investment adviser that the employer is offering the employee himself suffers from essentially severe conflicts of interest, but that isn't going to put the employer at risk.

RAY SUAREZ: What about Mr. Delaplane's point about making this voluntary, not putting in restrictions because of what we've seen in the past, a disincentive for employers to well endow pension?

MARK MACHIZ: Certainly there's important reasons to encourage employers to endow pensions. And I for one would never suggest employers shouldn't be permitted to and indeed encouraged to contribute employer stock to these plans. That can be done in the framework of a system that protects people from being over diversified. The point that Mr. Delaplane made that Enron is an aberration I have to take very, very serious issue with. What is not at all an aberration about Enron is the degree of commitment that the employees in that company made to their employer stock. Many large brand name United States companies have similar high concentrations of employer stock in their 401(k) plans. Are they all going to fail liken Enron? Certainly I hope not and certainly I don't expect them to. Can we pretty much predict that if we wait around for another couple of years we'll see another Enron just as we've seen other companies in the past like the Color Tile company a couple years ago go under and take the employees pension savings with them, we can be certain that if we leave the system the way it is, if we only enact the reforms we heard from President Bush, that we are going to see that in short order.

RAY SUAREZ: Steven Sass, go ahead.

STEVEN SASS: About the financial advice, I think actually that could be very beneficial. It's something I think a lot of Americans need. I think that there would be no reputable financial adviser that would recommend any significant amount of company stock in your 401(k). So whether the government mandates that it be excluded or you go to a financial adviser and he says you should get out of it as quickly as possible, good financial plan would go have you basically not be funding retirement plan with company stock.

RAY SUAREZ: But wouldn't that eventually take away the incentive that employers have for giving you that benefit in stock? They're certainly not going to give you the equivalent amount in cash, are they?

STEVEN SASS: Well, they can give you the stock and you can sell it. There could be some diminution of the incentive to -- a financial incentive to company to give you a plan if they couldn't give you stock. I think the basic problem is that you have two conflicting objectives here. One is retirement income security. And the other is an employer trying to develop a closer bond with the employee, which is something that is legitimate and it's beneficial. Actually, a lot of government law promotes profit sharing, stock bonus plans, because the government thinks this is a good thing. I think though that in the case of 401(k)s, that they become such a large institution, such a fundamental issue in the support of retirement income, that those interests ought to trump the benefits of improving the relationship between employers and employees. And it should be that goal and good financial planning should rule the regulations of 401(k)'s more than the beneficial effects that an employer might get by giving this benefit in company stock.

RAY SUAREZ: Well, to be continued since it hasn't turned into a bill or a debate yet but gentlemen, thank you all.

MARGARET WARNER: Still to come on the NewsHour tonight: Broadening unemployment benefits; Shields and Brooks; Justice O'Connor on her new book; and poetry by Langston Hughes.

FOCUS - EXTENDING BENEFITS

MARGARET WARNER: Though the country's unemployment rate was falling last month, businesses cut nearly 90,000 jobs, and job losses the previous three months were even greater. The newly unemployed enter a system that is itself the subject of much debate. Betty Ann Bowser reports.

CLARIETHA ALLEN: This says final demand.

BETTY ANN BOWSER: For Clarietha and Don Allen, paying monthly bills has become a daily struggle. Some bills will be ignored; others cannot.

CLARIETHA ALLEN: This is the electric. And let's we... We got to pay this by the 10th.

BETTY ANN BOWSER: Last fall, Clarietha Allen was laid off from her job at a managed care company. Since then, she's been collecting $260 a week in unemployment insurance benefits. Last month, the gas in the Allen's tiny Atlanta apartment was cut off.

CLAREITHA ALLEN: It's been extremely stressful for us. We've been behind in our bills, and we've had to really... We've been on a very tight budget.

BETTY ANN BOWSER: Allen's checks will expire in April, but they may get some relief. The White House and Congress are debating proposals to extend payments for workers who have lost their jobs because of the current recession.

CLAREITHA ALLEN: I have to have more time. I don't know what I'm going to do.

SPOKESPERSON: You got your papers, right? You're going to apply for unemployment today, right?

MAN: I already did.

SPOKESPERSON: You have no income coming in right now?

MAN: No.

BETTY ANN BOWSER: The whole debate about helping workers has brought new attention to the nation's unemployment insurance system, a system some say is in dire need of reform.

SPOKESMAN: Our greatest primary task is to put people to work.

BETTY ANN BOWSER: The unemployment insurance system was created in 1935 to help laid off workers pay their bills while searching for new work. On behalf of workers, employers are required to contribute to a trust fund. The states then decide who is eligible for checks. In Georgia and other states, that means a worker must be full time. The average payment last up to 26 weeks.

SPOKESPERSON: Have you all had any layoffs down in Jessup?

BETTY ANN BOWSER: Georgia state representative Nan Grogan Orrock supports federal proposals to extend payments, but she says the real problem with the system is that most unemployed people in Georgia aren't receiving checks at all.

NAN GROGAN-ORROCK, (D) Georgia State Representative: We were down to having only 22% of our unemployed workers accessing that fund. That's... That's just about one out of five working families that are between jobs that are unemployed being able to draw an unemployment check. Women, low-paid workers, minority workers, were ill-served, were often denied because of the terms of their employment and where they are in the workforce.

BETTY ANN BOWSER: Georgia is not unusual. Less then half of all unemployed workers nationwide receive them, and that number has dropped significantly since the 1950s. Critics say that's because the nation's workforce has changed. Workers today don't fit the traditional idea of laid off employees, and therefore don't qualify to collect checks. The number of part-time workers, many of them women, has increased dramatically. So too has the number of recently hired low-wage workers. And the rise of two-income earning families has meant more people quit their jobs when there's a family crisis. Orrock wants to pass legislation in Georgia to include those workers.

NAN GROGAN-ORROCK: We have a very narrowly drawn law at this point. We are excluding anyone who is seeking part-time work, even though they may have worked a part-time job for 20 years.

BETTY ANN BOWSER: Although Angela Smith worked full time as a nurse's assistant for ten years, she was denied unemployment benefits when she quit her job. Smith felt she had no choice but to leave when her infant daughter developed a serious heart condition.

ANGELA SMITH: She came home on a breathing machine, a feeding machine. She had to have medicine all day long. She had nurses and therapists coming in; a nurse would come in the morning, a therapist would come in the evening for her breathing, and I had to be here for them to talk to me and explain to me what to do, how to change it and everything.

BETTY ANN BOWSER: Shortly after her second surgery and one month before her second birthday, smith's daughter, Jaaliyah, died.

ANGELA SMITH: You try to worry about your child and you try not to worry about your bills, but they still calling and stuff so you got all of that on you.

BETTY ANN BOWSER: Under Grogan Orrock's legislation, Smith would have been able to collect unemployment because she had a compelling life crisis. Instead, Smith, who returned to the workforce two months after her daughter died, says her credit is ruined.

ANGELA SMITH: The bills still going to come, that's not going to stop, and you still have to pay it and you still have to live and everything. And a lot of people don't understand that when they call on you, talking about this due and this due. And you tell them what's happened, and they say they sorry and everything, but they still want to know, "Can you make arrangements?" Or "When you can make the payment."

NAN GROGAN-ORROCK: This modest unemployment check can be, you know, the wall between a working mom and her family, and disaster of having to put in for welfare check. We want to keep people in the workforce, productively attached to the workforce, and the unemployment system and that unemployment check, that weekly check, is part of how you do that.

BETTY ANN BOWSER: Orrock says Georgia's trust fund, like others across the country, has become fat from years of a booming economy, and she thinks the time is right now to dip into that surplus. But not everyone wants to relax the rules for unemployment insurance eligibility.

SPOKESPERSON: I'm going to need your help this session.

SPOKESPERSON: Absolutely.

SPOKESPERSON: Very good, thank you.

BETTY ANN BOWSER: Earl Rogers, a lobbyist for Georgia's Chamber of Commerce, says the business community worries that allowing people who quit to collect checks may open the door to misuse of the fund.

EARL ROGERS, Georgia Chamber of Commerce: I think it sounds good, but it's not good because the opportunity for abuse in a system like that is just far too great. How many among us have not experienced some kind of family hardship? When I talk to people about that, nods... See people nod their heads. Everyone has experienced some type of family hardship in their life, but they don't choose to quit work and have the employer pay for their benefits from here on out.

SPOKESMAN: Do we do that on most of our routine transition or do we just going and end that?

BETTY ANN BOWSER: Efforts to extend benefits also has small business owner Earl Smith worried. Smith has seen a 20% downturn in his air conditioning and heating business since September 11. After 40 years in the business, he recently laid off 12% of his staff. Smith fears allowing more people in Georgia to draw unemployment will ultimately come out of his costs.

EARL SMITH, Small Business Owner: But if you want to bring in another layer of people that's eligible for other reasons, then you add cost. And cost is something that we look at every day, and we've got to meet the conditions and competition in the marketplace. We're already suffering with a reduction in our business, so we've got to meet competition and be there at the marketplace. So where else can we go?

EARL ROGERS: Now is not the time to be pushing for an expansion of benefits when you've got to remember why that employee became unemployed to start with. Companies are going through tough times. They have to make tough decisions. Layoff is the last thing they want to do.

BETTY ANN BOWSER: The debate in Georgia is being heard in legislatures across the country as many other states take a second look at the way they administer benefits to the unemployed.

FOCUS - POLITICAL WRAP

MARGARET WARNER: Now, for political analysis of this state-of-the- union week, we turn to Shields and Brooks, syndicated columnist mark Shields and the "Weekly Standard's" David Brooks. Welcome back.

MARGARET WARNER: David, George Bush went before Congress as the war President Tuesday night and then out on the road with the same message. Is it the right message, do you think, for him to maintain the support he needs for this extended war on terrorism, something he obviously has in mind?

DAVID BROOKS: It's a brave message because the pollsters tell him to talk about domestic policy. People want to know about their pocketbooks but he said I'm a man with a mission. And his mission is to fight this war. And it's not only a war on terrorism anymore because he shifted American foreign policy in the way that it hasn't been shifted since 1981. Before he was talking about terrorism and terror organizations. In the crucial paragraphs of that speech, he was talking about weapons of mass destruction and nation states, those rogue regimes, those evil axisor whatever they call it, nexus, axis. And what that means is we're going to have an expansive foreign policy that believes in changing regimes that we don't like, that we think are a menace to civilized values and a foreign policy that champions American values-- even regimes that aren't so terrible, that's you, Saudi Arabia, if you are not Democratic, we'll be on your case. And I think the important thing that happened this week was that we've had this foreign policy consensus. That I think is about to break because in this Bush doctrine, there are a lot of Democrats, first it will be liberals, in the "New York Times" editorial page, that will be showing distance -- eventually Democrats in Congress.

MARGARET WARNER: It is controversial, isn't it, Mark?

MARK SHIELDS: It is controversial. I agree with David it is a major departure from the George Bush arena in the year 2000 who was far more restricted, far more limited anti-interventionist.

MARGARET WARNER: He used to say we should have humility in the way we deal with other countries.

MARK SHIELDS: That's right, and whatever this speech had, it had precious little humility and it was a different and bold speech. At the same time, there are a couple of things about it that truly bothered me. I think if David is right, then I'll look forward to Tom Delay, Dick Armey and the other Republican leaders in the Congress saying, okay, we've got to up that foreign aid budget because, my goodness, we just don't do this with Special Forces. And to some degree, Margaret, there was the worst of what Democrats were accused of in this speech, that was you want it, you got it. There was no cost, no price. I mean you still have got to have tax cuts, we are still going to have prescription drugs, going to spend more on defense. Everything is going to be fine, and this was Churchill without the blood, sweat and the tears. And I think in that sense it is a lot that remains to be filled in, not rhetorically because evil axis is the rhetorical marriage of the Cold War, the evil empire and the axis of World War II, Japan, Germany and Italy, a speechwriter's contrivance I think that probably got ahead of the President just a bit because there is very little axis between North Korea, Iraq and Iran, the last two having fought a bloody war. So I think he is striking out in a bold, new departure, but if the devil is in the details, the demons are really in these details.

MARGARET WARNER: David, did, by having this more than robust, I mean almost aggressive posture towards Iran, Iraq and North Korea, is he painting himself into a corner committing the U.S. to use military force if they don't - as he said -- get their houses in order on weapons of mass destruction?

DAVID BROOKS: I think it becomes exceptionally hard to walk away at the end of his term if he hasn't done something about Iraq. The other two will fall off. But Iraq is the issue it becomes very hard to back away from. He has launched himself on an idealistic crusade; it's a crusade that goes back to the Declaration of Independence, that we believe people have inalienable rights, not just white people in North America or people in North America but people around the world in the Arab world. And that is an ambitious, controversial crusade. He is boosting the defense budget to do it; he's doubling the size of the Peace Corps. You're right; he does have to increase foreign aid for all this nation building we may be doing. I think it is a noble gesture and certainly a departure from where the Republican Party was six years ago.

MARGARET WARNER: Do you agree with Mark though, that he is sort of saying we can have it all?

DAVID BROOKS: Well, no, I think he is warning people it will be a long, frustrating sometimes painful effort. What struck me though was the tone. The tone was almost calculated to drive the State Department bonkers. You know, you imagine them there spitting up their Coruvorsier. That tone really struck me. I would have sugar coated it a little because you know you really are rubbing the sensibilities of Europe raw, of people around the world raw. Mention NATO, mention the UN, mention the peace process in the Middle East, let it go down a little easier, but George Bush is sort of a man transformed. He is saying, hey, I'm President. I can say what I think. I don't have to pretend I think Yasser Arafat is an honorable guy. I can say what I think. He has really been transformed in the past month.

MARGARET WARNER: Now, Mark, you said he didn't ask for sacrifice but he did talk about something you've talked about a lot, which is calling on the American people to do something, and his message here was all of Americans can get involved by fighting terror by getting more civically involved and even pledge some money to beef up Peace Corps and Senior Corps and Americorps. I mean does that satisfy the Shields standard?

MARK SHIELDS: I think that there is a universality of sacrifice when a nation is at war that has to be demanded of the highest, the lowest, of the best and the brightest, and everybody. That's when we all enlist. I commend the President for encouraging people, the Peace Corps and all the rest of it but, Margaret, there are a couple of things. David talked about the President being bold. And he was bold but you could see the doubts the day after the speech. They walked back from it and said no, there was no change in policy articulated Tuesday night when he listed Iraq, Iran and North Korea and talked about the new aggressiveness. Then secondly two days later on Thursday, it was well, no, no, it was nuance. The President knew exactly what he was saying. Margaret, the President has to confront an ugly reality here. Our drug policy is anti-Colombia because they're the suppliers. If we are talking about the suppliers of the weapons of mass destruction, we are talking about Russia, our new best friend and we're talking about China, our biggest market mate. That's where it has to be delivered. It isn't just the users, it isn't just the consumers, these anti-social at worst regimes. Where are they getting it from? It's not just coming out of the hole. The last thing is Teddy Roosevelt, there was a sort of not talk softly, there was a talk loudly to this, and it shows one proof to me when a man is at 85% that he is almost immune to criticism. David and I sat and listened to the speech the other night and I think we both took notice and neither of us mentioned it when the President said this new creative America is "let's roll." Nobody has any idea what "let's roll" means. It is a total non-sequitur a country he's asked to sacrifice and so you know there are certainly advantages for any politician to be at 85%-88%approval.

MARGARET WARNER: Let's switch to something he didn't specifically talk about in his speech but did today, which was he didn't mention specifically Enron in his speech but as we just had a big discussion about, he suggested putting in protections in 401(k) accounts. Tom Daschle, the Senate Majority Leader immediately came out, David, and said this will do little to restore confidence. What are the politics here of this?

DAVID BROOKS: The politics is that each party is returning to their genetic roots. These are classical expressions of what each party stands for. The Republican, the Bush plan gives investors maximum flexibility. It says you must be allowed to sell your company stock if you have been in the plan for three years. The Democratic policy says we are going to limit your choices in the name of protecting you from your own stupidity. The Democratic plans from Senator Barbara Boxer, the one in the Senate says you can only have ten or 20% of your 401(k) in company stock. If you work for Microsoft or GM and you want to have more, tough, you can't do it. So it is a classic fight between the Republicans maximum choice, the Democrats limited choice. I happen to, you know, surprise, think the Boxer plan is antistatism at its worst. If I want to invest in my company, it's my right to do it. Barbara Boxer isn't my financial consultant.

MARGARET WARNER: Is that where the Democrats are going to be?

MARK SHIELDS: I think I'd frame it a little bit differently from the way David does --

MARGARET WARNER: What a surprise.

MARK SHIELDS: I think, Margaret, what you have is the -- What the President is trying to do, if you analogize this to a debate over tax cuts, all right, on the debate of tax cuts, the Democrats say cut taxes by 5%. The Republicans say no, by 50. The Democrats are never going to win the debate. The Republicans and George Bush are never going to win the debate because this is a debate about regulating business, something that is antithetical to the Republican genealogy and the Republican gene pool. They just don't like to do it. There is a yearning, a desire and almost a burning in the electorate to have this. Right now Procter and Gamble, 95% of their 401(k) plans are all in Procter and Gamble stock. Sherwin-Williams 92%. Abbott Labs. 90%. Anybody will tell you that these people are not stupid. I mean the fact is we're talking about people getting advice, independent advice which has been fought, consistently fought. We're talking about the President came in with a plan today that says after three years you can do it. What about executives like the Enron folks who took out loans and then paid them off with stock options and cashed in that way? So there is going to be a fight over egalitarianism, over everybody being treated exactly the same and I think in that fight and especially as Dick Gephardt has advocated, the portability and lifetime pensions that you carry a pension with you, I think the Democrats win that debate and I think with Enron fresh in mind.

DAVID BROOKS: I'll make you a bet. I think this Boxer-Corazon plan won't even get the majority of the Democrats.

MARK SHIELDS: I'm not talking about Boxer-Corazon. I'm talking about whether there will be more regulation than the President advocated today and that more than business wants.

DAVID BROOKS: But new Democrats have been saying the majority of Americans are in 401(k)s; the majority of Americans are investors, to think they're going to start regulating these -- the majority of Americans who are all involved in the stock market saying, no, you can't put more than 10% in your company, you don't have free choice about that, I just don't believe the Democrats will do that.

MARGARET WARNER: Do you think that the Bush administration will be coming up with other policy prescriptions to respond to the Enron? The Enron situation?

DAVID BROOKS: I haven't heard about them. It would be really foolish not to because their ethos has to be what guarantees fair competition? It is clear there is not fair competition in the markets right now because the information is distorted. Only the big guys have the information. Little guys don't have it. If they ever want to get Social Security privatization passed, they have to restore the credibility of the financial markets so they have got to be at least alive to the possibility.

MARK SHIELDS: I think they have to face, Margaret, that we're talking about a major American industry that's in trouble. We are talking about states like Massachusetts and New York, California and states like New Jersey where people, thousands of people are involved in these businesses. This is a threat to their livelihood. This is more than just punishing Enron and the greedy wretches who ran it.

MARGARET WARNER: On that note we have to end it. Thank you both.

CONVERSATION

MARGARET WARNER: Next, a conversation about a new book, and to Gwen Ifill.

GWEN IFILL: The book is "Lazy B: Growing up on a Cattle Ranch in the American Southwest." The author is Supreme Court Justice Sandra Day O'Connor. Justice O'Connor, of course, was the first woman appointed to sit on the Supreme Court. But long before she got to Washington, she lived a life we read about only in westerns. In "Lazy B," she joins her brother, Alan, in recalling their memories of those times. Welcome, Justice O'Connor.

SANDRA DAY O'CONNOR, Author, "Lazy B:" Thank you. Well, it is a joint effort with my brother, Alan. And Alan ended up running the ranch for most of his adult years. And so he had lots of institutional memories of that amazing place.

GWEN IFILL: Well, tell us about the ranch, for those of us easterners or those of us who aren't native to the Arizona-New Mexico border.

SANDRA DAY O'CONNOR: Well, it's... It's in the semi-arid high desert plateau region on the New Mexico-Arizona border, along the Gila River. And it gets very little rainfall a year, about ten inches a year -- about 5,000 feet in elevation, other than the higher mountains to the South. And it's just... It has a subtle beauty that the desert can have. But it's maybe difficult for someone in the Northeast who's used to seeing greenery all the time to appreciate that desert scene.

GWEN IFILL: What was unique about growing up on a ranch like that?

SANDRA DAY O'CONNOR: We were isolated. We had no neighbors, really. It was 35 miles to town. We would go to town once a week to get the mail and some groceries. And the people at the ranch, in my early years, were my parents and the cowboys who worked there.

GWEN IFILL: Who you write about extensively in this book.

SANDRA DAY O'CONNOR: Yes, because they were amazing people. And in that era, the cowboys tended to be single men, many of whom lived their entire lives at the Lazy B.

GWEN IFILL: You spend a lot of time in this book writing about a central feature of your life, which was the weather. And when it would rain, you described it as "an incredible gift from above, our salvation." There's a passage in the book I would like you to read on page 132 there, about rain, when rain came.

SANDRA DAY O'CONNOR: All right. "You know, rain was everything to us. And it's what we did at the Lazy B, was look at the sky every day and hope we'd see rain clouds forming. And when they did, it was usually in the summer and usually in the late afternoon. And if a storm actually got there and produced a little rain, then we would watch with wonder the changed world about us. The dry, dusty soil was wet, muddy, brown rivulets of water running down every slope and gully -- the grass and plants sparkling with drops of water clinging to them -- the greasewood bushes normally so gray-green and dull, releasing their incredible perfume, produced by the rain on their dense, oily leaves -- the birds chirping frantically, the rabbits peeking out from their burrows -- everything stirring and excited from the rain, and no one more excited than my father. We were saved again -- saved from the ever- present threat of drought, of starving cattle, of anxious creditors. We would survive a while longer."

GWEN IFILL: It was all about survival, wasn't it?

SANDRA DAY O'CONNOR: It was all about survival and survival meant rain. And...

GWEN IFILL: Tell me-- I'm sorry-- tell me a little bit more about your father. You elude to your father and you write, and your brother writes in this book about how you were your father's daughter.

SANDRA DAY O'CONNOR: I felt very close to him. But, of course, when I was little... How many children get to be with their parents all day, every day? And go to work with your father, so to speak. If a father goes off to the office, the child is probably not going to be with him all that time. And, yet, on the ranch when my father would go out around the ranch, he liked to have company and I'd go with him. And whatever it was, we'd be together. He was very intelligent, curious about everything, and loved to talk. And it was just quite an experience being with him.

GWEN IFILL: And your father, you called DA.

SANDRA DAY O'CONNOR: Yes, I think my younger sister started that when she was learning to spell, d-a-d-d-y. And DA stuck for my father and MO for my mother, short for m-o-t-h-e-r.

GWEN IFILL: One of the stories you tell about your dad in the book is when you first took your husband, John, to meet him for the first time. Could you describe it for us?

SANDRA DAY O'CONNOR: Well, I don't know if you have time, but it was pretty funny, because John grew up in a city in San Francisco. He was definitely not a country boy. And when I took him out there, we were a little concerned. And when we arrived at the ranch one afternoon, my father was down in the corrals with the cowboys, branding some cattle. And it ended up that my father at first was too busy to talk. And then when he finally met John, he put some mountain oysters in the branding fire and made John eat them. Now, I guess you know what those are...

GWEN IFILL: For easterners... (Laughs) ...For easterners who might not know what... How can we delicately describe that?

SANDRA DAY O'CONNOR: I don't know if you can do it delicately, but when you brand a bull calf, and you don't want it to grow up to be a bull, the testicles are removed, and they're called, euphemistically, well, in our part of our country, mountain oysters.

GWEN IFILL: So your father gave them to your... This city boy fianc of yours...

SANDRA DAY O'CONNOR: To eat, right there out of the branding fire.

GWEN IFILL: And that's when you knew your husband could hang in for the long haul.

SANDRA DAY O'CONNOR: Well, yes. I think that was proof that he was pretty interested in me.

GWEN IFILL: (Laughs) Tell me another story -- this one about you were filling in for the camp cook on a day of roundup. And it was your job to deliver the lunch to the cowboys...

SANDRA DAY O'CONNOR: Right.

GWEN IFILL: ...And to your dad.

SANDRA DAY O'CONNOR: Yeah. Very important to a roundup crew to have lunch, and have it early. They usually liked lunch by about 10:00 A.M. because they'd been on their horses since daylight. And I was supposed to go to a very remote place on the ranch, and have the lunch ready when they were ready. And I'd gotten everything in the pickup truck and set off to meet them, and had a flat tire. And, of course, it was a million miles from anyplace. And the truck was heavy. And the lug bolts hadn't been off in years, I don't think. And I had the worst time in the world getting the tire changed. It was really hard because the lug bolts were stuck. And I finally managed to do it, but it made me late for lunch. And I don't think my father ever forgave me.

GWEN IFILL: (Laughs)

SANDRA DAY O'CONNOR: When I tried to explain and thought I had a pretty good excuse, he said, "Well, you should have started earlier." (Laughs) I guess he was right.

GWEN IFILL: No excuses.

SANDRA DAY O'CONNOR: (Laughs) No.

GWEN IFILL: So, this life that you led, how did you get from there-- the remotest corner of America-- to where you are today? How did you... Have you ever thought about how you've made that trek?

SANDRA DAY O'CONNOR: Well, it's a little odd, the path I took, because when I was young, I wanted to be a cattle rancher. That was what I knew and that was what I liked. And I went off to Stanford, I was pretty young and pretty naive. And I had a professor I really loved, who was himself a lawyer. And I thought one reason he was so effective was his legal background. And because of him, really, I applied to law school. I didn't know where it might lead or if I'd like it. But I loved the law school experience and graduated not having a plan for what to do, and having a lot of trouble getting work as a lawyer.

GWEN IFILL: How does... How... Obviously, it turned out well.

SANDRA DAY O'CONNOR: Turned out all right.

GWEN IFILL: It turned out all right. How does that experience now define you today?

SANDRA DAY O'CONNOR: The ranch experience?

GWEN IFILL: Mm-hmm.

SANDRA DAY O'CONNOR: Oh, that's hard to say. It probably... It gives a person a little confidence, a little bit of self-reliance because you know you have to solve the problems yourself. You can't always turn to other people to do them -- a belief in independence.

GWEN IFILL: Well, that comes in handy on the Supreme Court.

SANDRA DAY O'CONNOR: Well, I guess it might. Some might call it a handicap.

GWEN IFILL: (Laughs) Sandra Day O'Connor... Justice O'Connor, thank you so much for joining us.

SANDRA DAY O'CONNOR: Thank you, Gwen.

MARGARET WARNER: Finally tonight, a salute to poet Langston Hughes. Today, on what would have been his 100th birthday, the Postal Service unveiled a new stamp in his honor. His work continues to reach people of all ages around the world, as we heard two years ago from a young woman in Stockton, California. She was part of then-poet laureate Robert Pinsky's favorite poem project.

FINALLY - FAVORITE POEM PROJECT

POV CHIN, Student: My name is Pov Chin. I'm a student, and I want to become a teacher. I was reading a bunch of poetry. Like over the summer, I just got bored, and so I went and I saw Langston Hughes' poem. And it was really weird because I've never heard of Langston Hughes. And it was really weird, because I wanted originally to put in "The Loan" by Edgar Allen Poe, and I couldn't find it. And I flipped a page, and I saw this poem, "Minstrel Man," and I read it and I was like, "wow, this fits perfectly."

"Minstrel Man," by Langston Hughes.

Because my mouth

Is wide with laughter

And my throat

Is deep with song,

you do not think

I suffer after

I've held my pain

So long?

Because my mouth

Is wide with laughter,

You do not hear

My inner cry?

Because my feet

Are gay with dancing,

You do not know

I die?

POV CHIN: I like it because it describes me. Like, I walk around with a smile on my face all the time at school and with friends and stuff, but I still have different thoughts running through my head. It's never stable. It's always going. My parents are originally from Cambodia, but I wasn't born in Cambodia. I was born in Thailand because they were having this genocide. Pol Pot was killing all the Cambodian people. And my parents thought they can't... They're not going to let their kids die. They're not going to give up. That's where I learned not to give up. And so they're going to get out. They're going to escape for their... I think what they thought of most of was us. They wanted us to see the world first. They didn't want us to end like that. So they escaped with my grandma, too. It's not just them. And they killed my grandma on the way, because they spread us up, and then my two brothers in front of their faces.

And they just kept going. They kept running away at night. They gathered their kids from the camp, and they kept running and running. My mom was pregnant with me, and so my dad had a couple of the kids on his shoulders because they were really small. They were really young. We're three years apart, each one of us, except for now. Between my brother... me and my brother now, it's six because the one in the middle passed away, and then all this. And so they ran with the kids. They slept on grounds at night, hiding places, ditches, everywhere, anywhere they could. And then they got to a refugee camp on the border of Thailand. And while she escaping, she gave birth, and so I was born on the border of Thailand and Cambodia. And we're... luckily we had family here in America already, so they helped us get to America. I feel guilty about a lot of situations, that, hey, I'm here free. Or, I'm more better off than a lot of people in Cambodia, so it gives me a lot of guilt feeling that I'm not free to let it out. It's like, it's still there.

And that's what links me is just saying... I mean, people there walk around. They put on a fake face, they smile, they laugh, they sell stuff at the market, but they know inside that it's, like, it's not there. It's not free.

Because my mouth

Is wide with laughter

And my throat

Is deep with song,

You do not think

I suffer after

I've held my pain

So long?

Because my mouth

Is wide with laughter,

You do not hear

My inner cry?

Because my feet

Are gay with dancing,

You do not know

I die?

RECAP

MARGARET WARNER: Again, the major developments of the day: Unemployment dropped 0.2%, to 5.6% in January, and President Bush urged Congress to change pension laws to protect workers' retirement savings. A reminder that "Washington Week" can be seen on most PBS stations later this evening with and Monday, an interview with Secretary of Defense Rumsfeld. I'm Margaret Warner. Thanks for being with us. Good night.