The NewsHour with Jim Lehrer

GWEN IFILL: Good evening. I'm Gwen Ifill. Jim Lehrer has the day off. On the NewsHour tonight: A summary of today's news; a look at the first stop on the President's Asian tour, Japan; a report on the federal takeover of airport screening; a debate over Amtrak's future; and government efforts to reach out to the Muslim and Arab world.

NEWS SUMMARY

GWEN IFILL: President Bush today said the Japanese economy "is on the path to reform." He was in Tokyo at the start of a six-day trip to Asia. At a joint news conference, he expressed confidence in the prime minister of Japan's proposed economic changes. Mr. Bush also repeated his concerns about missile- trafficking by North Korea, just across the Sea of Japan.

PRESIDENT GEORGE W. BUSH: In the war against terror, one of the worst things that could possibly happen is al-Qaida-like organizations becoming allied and operationally attuned to nations which have a weapon of mass destruction. Freedom-loving people understand that. They understand that our commitment is not just in Afghanistan, that history has given us a unique opportunity to defend freedom. And we're going to seize the moment.

GWEN IFILL: The President wraps up his Japan visit tonight with an address to the parliament. Tomorrow, he'll go to South Korea. We'll have more on Japan in a moment. In Afghanistan today, Britain, Pakistan, and Saudi Arabia sent planes to take would-be pilgrims to the Muslim holy city of Mecca. In Saudi Arabia, a shortage of flights caused a riot last week during which the Afghan aviation minister was killed. Prime Minister Karzai said it was an assassination. And in neighboring Pakistan today, police found and defused four rockets with homemade timers. They were aimed at Karachi airport facilities used by American-led forces in the war against terrorism. In The Hague today, Slobodan Milosevic ended his three-day opening statement at the UN War Crimes Tribunal. He accused the West of breaking up Yugoslavia, and denied knowledge of the 1995 massacre of Bosnian Muslims at Srebrenica. The tribunal also began to hear from witnesses against the former Yugoslav President. The war crimes trial is expected to last up to two years. The Supreme Court of Peru today upheld a 20-year prison sentence against an American woman. New Yorker Lori Berenson was arrested in 1995, accused of aiding Marxist rebels. This was her last chance for an appeal in the Peruvian justice system. The nation's new airport security system was tested for the first time today. At Los Angeles International Airport, an inactive national guardsman was arrested after a nonfunctioning explosive device was discovered in his carry-on luggage. And at New York's La Guardia Airport, a flight headed for Cleveland turned around because a President had... because a passenger had not been fully screened. Yesterday, the federal government took control of airport screening. We'll have more on the hand-over shortly. United Airlines and its mechanics union reached a tentative contract agreement today. It came less than 36 hours before a strike deadline affecting nearly 13,000 workers. Details of the pact were not released. In a statement, United's chairman said flights would operate without disruption. In northern Georgia today, authorities searched for bodies left to decay at a crematory. The operator, Ray Brent Marsh, was in custody on theft by deception charges, a felony. He allegedly told investigators the bodies were not cremated because the incinerator was broken. They were kept in vaults or scattered over the property. A state official described the difficulty of identifying the remains.

DR. KRIS SPERRY, Chief Medical Examiner, Georgia: There are some sets of skeletal remains that we are recovering that are only partial. I mean, there are some just skulls alone with no teeth, isolated bones that are not associated with other skeletal remains in the immediate area. This is an enormous problem. It's like taking 100 jigsaw puzzles and pouring them out on the floor and putting them together upside down.

GWEN IFILL: About 130 bodies have been discovered so far. The chief medical examiner said there could be many more. At the Olympics in Salt Lake City today, the head of the International Skating Union proposed changing 6.0 subjective rating scale to a technical scale. Also, fourteen judges would rate figure skating performances, but only seven of their votes would count and the judges would not know which ones. Yesterday, two Canadian figure skaters were presented gold medals because of alleged misconduct in the pairs event last week. They'll share the honor with a Russian pair. Two notable passings today; journalist Howard K. Smith died of pneumonia Friday night at his home outside Washington. He worked for CBS and ABC for nearly 40 years, and moderated the first 1960 Kennedy Nixon Presidential debate. He was 87 years old. And the man who founded the civic lobbying group "Common Cause" in 1970 died Saturday at his home in Palo Alto, California. John W. Gardner was also head of a foundation whose 1965 report led to the current Public Broadcasting System. He was 89 years old and had prostate cancer. That's it for the News Summary tonight. Now it's on to: Japan, America's troubled ally; the federal takeover of airport screening; Amtrak's future; and reaching out to the Arab world.

FOCUS - ASIA ALLY

GWEN IFILL: President Bush in Asia-- first stop: Japan. We start with a report from Spencer Michels.

SPENCER MICHELS: President Bush began his three-nation Asian tour Sunday with a stop in Tokyo, where he expressed support for Japan's attempt to reform its ailing economy. The President's itinerary included this demonstration of sixth-century horseback archery. Mr. Bush used his visit to thank Prime Minister Junichiro Koizumi for the support Japan has offered in the U.S.-Led war on terrorism. Japan has committed a third of its military's transport planes and some refueling stations to the campaign. But the economy was the main focus. Japan has been mired in an 11- year recession after an economic boom in the 1980s. But by the early 1990s, the expansion nearly stopped. Japan's economy grew less than 1% over the last decade. Unemployment remains high. The financial system is riddled with bad debt, and a hoped-for recovery has fizzled-- that, despite hundreds of billions of dollars of government spending resulting in the largest public debt in the industrialized world. Since Koizumi was elected last year on promises of economic reform, he has struggled with a reluctant parliament to make significant progress. Last month he fired his popular foreign minister, Makiko Tanaka, because of her fights with the bureaucracy. The economy and the firing have caused Koizumi's approval ratings to plunge from above 70% to about 50% today. After three hours of private talks Monday, both President Bush and the prime minister spoke optimistically about getting Japan's economy back on track.

PRESIDENT GEORGE W. BUSH: I'm confident in this man's leadership ability. I'm confident in his strategy. And I am confident in his desire to implement that strategy. And when he implements that strategy, it will help Japan's economy a lot. I'm not here to give advice; I'm here to lend support. And when he looked me in the eye and told me that he is going to take measures necessary to improve in all three regions, I believe him. I believe that's his intent, and that is good news because it's going to require a strong leader to deal with the difficult problems facing the Japanese economy.

SPENCER MICHELS: Koizumi vowed to push forward in his economic reform efforts.

JUNICHIRO KOIZUMI, Prime Minister, Japan (Translated): Of course there are many activities that are going on where the government is not involved, and we can invite the private sector to come into areas that are covered by the government, and we should carry forward regulatory reform as well. There will be, of course, confrontation with vested interests, whatever measures we may take -- financial measures, deflationary measures, or fiscal policy measures -- so it's not really a question of which should be given priority, structural reform or deflationary measures. Whatever the situation may be, we have to implement structural reform.

SPENCER MICHELS: The President and prime minister wrapped up the day with a casual dinner at a Tokyo restaurant with their wives. President Bush is scheduled to address the Japanese parliament, the Diet, before continuingon to Seoul, South Korea, Tuesday.

GWEN IFILL: We get more on Japan's economic and political outlook from Mike Mochizuki, director of the Sigur Center for Asian Studies at the George Washington University; and Ayako Doi, editor of the "Japan Digest," a daily publication covering political and economic developments in Japan. Professor Mochizuki, ten years ago, this President's father went to Japan. At the time the United States was struggling; Japan was prospering. Now ten years later it's almost entirely the opposite result. Why is Japan struggling?

MIKE MOCHIZUKI: Well, it's been undergoing an economic stagnation for the last ten years. It's still trying to deal with the bursting of the bubble economy, which left in its wake trillions of yen of bad debt. And because of that, even though the Japanese have tried all sorts of measures -- fiscal stimulus packages, loose monetary policies-- because of the problems in the banking sector and specifically the bad loan problem the Japanese economy just has not been able to get back on a growth track.

GWEN IFILL: Ms. Doi, can you explain to us what we mean when we're talking about the bad loan problem. We're talking about four recessions in Japan in the last 10 or 11 years.

AYAKO DOI: Well, you know, since the bubble burst in 1990, late 1990, I think what it was, was that the government and the Japanese economy as a whole didn't come to grips with the bad loan... the size of the bad loan problem early enough. So although....

GWEN IFILL: Bad loans to businesses, corporations?

AYAKO DOI: Right, right. The various measures were taken, as Professor Mochizuki said. They were in hindsight, they were all too small too late kind of thing. They never sort of had a desired effect of turning around the economy and in the meanwhile the banks kept holding those bad loans because not getting rid of them would mean bankrupt companies. The companies that they lend money to -- and so the problems were sort of put off all these ten years and kept on getting worse.

GWEN IFILL: Now the President has said not directly today to the Prime Minister Koizumi, he did not say that this was something that Japan should fix, but he and his Treasury Secretary Paul O'Neill had been hinting this is something they should do. What did you think of the President's comments today that Koizumi is a great reformer?

AYAKO DOI: Well, he presents himself as a reformer, and I think he is more committed to reform than most other politicians. And so it's sort of like he's the only hope for Japan and the rest of the world. So, President Bush had not much choice than to support his reform program and hope that things will get better or that he will act on what needs to be done.

GWEN IFILL: Is that the way you saw it too, Professor?

MIKE MOCHIZUKI: Yes, but I think that President Bush in terms of the public arena has to really show his support for Mr. Koizumi as Ms. Doi indicated there's really no alternative. But I think privately he was probably quite forceful in saying that something really needs to be done quickly or Japan might enter a major financial crisis, which could pull down not only the Japanese economy but the U.S. economy and the rest of the world economy. And although Mr. Koizumi has been talking about structural reform, that means a lot of things from deregulation to dealing with the burgeoning public debt to the privatization of public corporations. But the problem is, is that he really does need to set priorities, although he says he wants to do everything. All of these things are politically difficult. And I think the number one priority ought to be restoring some health in the banking sector.

GWEN IFILL: Is the President also trying to come up with some sort of political... maintain political support from Japan for the U.S.-led war?

MIKE MOCHIZUKI: Yes he is. And that's why one of the main purposes of this trip is to show how important Japan is as an ally to the United States and to thank Mr. Koizumi and the Japanese people for all the effort in the anti-terrorist campaign. And the other thing is that President Bush is interested in the revival of the Japanese economy not just because it makes good economic sense but because it makes good geopolitical and security sense. He sees a weak -- economically weak Japan would not be able to contribute as much to the anti-terrorist campaign, and he thinks a weak Japan economically would not be able to balance against the rise of the Chinese economy.

GWEN IFILL: Ms. Doi, the President in his much remarked upon axis of evil in his State of the Union speech rattled a lot of our allies around the world. What was the response in Japan?

AYAKO DOI: Publicly the Japanese government and mainly Mr. Koizumi has fully supported his remarks. He said that he understands why he said that, and he agrees with him and so on. But then privately and in the press and so on, there's a lot of uneasiness about particularly the inclusion of North Korea as one of the nations in the axis of evil, because Japan, as well as South Korea and the U.S., had been trying to engage North Korea in some kind of a positive conversation for a decade or more now and it's been difficult. Since President Bush came in office, he basically said that he's not going to continue the sort of sunshine policy of the Clinton administration, and that made things much more difficult for Japan as well as South Korea to have any kind of conversation with North Korea, and this remark may make it even more difficult.

GWEN IFILL: Picking up on that same kind of nervousness, public response, private response?

MIKE MOCHIZUKI: Yes, there is nervousness but what's very interesting is that Mr. Koizumi was, I think, quite forceful in saying that what's very important is that the United States work with Japan and South Korea in its policy towards North Korea and also on Iran. I mean Iran was one of the three countries mentioned in the axis of evil. Japan has normal diplomatic relations with Iran. And I believe Bush officials essentially told the Japanese that they would like Japan's help in trying to use the diplomatic ties that Japan has to encourage Iran to not promote the spread of weapons of mass destruction.

GWEN IFILL: Is the prime minister in any kind of political trouble especially in the wake of the firing of the foreign minister?

MIKE MOCHIZUKI: Well, his public opinion polls have declined from an 80% unprecedented popularity rating to 50%, but I still think that he's not close to being kicked out of office. And I believe that the decline in his popularity might really energize him to take some decisive action on the economic problems at home.

GWEN IFILL: And are there internal political forces in Japan which make it difficult for the prime minister to be the kind of reformer that the President says he is and that he is aspiring to be?

AYAKO DOI: Oh, yes, certainly. I mean, the party that he comes from, Liberal Democratic Party, have held on to power because of this network of vested interests that they developed over many decades. And many of those people don't like what Mr. Koizumi is trying to do in terms of getting rid ofthe wasteful public sector economy and restructuring the banks. There are... what Japan is faced with now in terms of banking sector reform is that... whether to write off this bad... force the banks to write off this enormous amount of bad loans and take the consequence of having hundreds and perhaps thousands of companies, big and small, go bankrupt with all the social consequences that go with it -- or not do that and see the economy slowly go downhill like it has been in the last ten years. So it's a very difficult choice.

GWEN IFILL: So what, Professor Mochizuki, should Japan be doing to turn itself around?

MIKE MOCHIZUKI: I think immediately what the Koizumi government needs to do is to come clean about the bad loan problem and infuse....

GWEN IFILL: Which has not happened yet.

MIKE MOCHIZUKI: Which has not happened. And it's a moving target because as the economy falters the size of the bad loan problem increases, but what Mr. Koizumi has to do is to infuse public capital so that the banks can write off the loans. Let some of the banks even go bankrupt and some restructuring in the banking sector. Without that, any kind of loose monetary policy is just going to be ineffective.

GWEN IFILL: Mike Mochizuki, Ayako Doi, thanks very much for joining us.

FOCUS - SECURING THE SKIES

GWEN IFILL: Now, the new federal role in airport security. Jeffrey Kaye of KCET-Los Angeles reports.

JEFFREY KAYE: There was little evidence of change today or over the weekend at Denver International Airport. But, in fact, DIA and 428 other airports around the country saw the beginning of the most massive overhaul of aviation security in U.S. History. Yesterday, the government assumed contracts that the airlines held with private security companies. It was part of the federal government's takeover of airport screening from the private sector. The takeover reflects widespread frustration with the aviation security industry. Outside an airport terminal recently, a passenger blamed a screener for the September 11 attacks.

PASSENGER: Every time I come here, I see the screener just standing here talking to somebody else.

SCREENER: No, no, no.

PASSENGER: Why did this happen? This wouldn't have happened if the screeners were doing their job.

JEFFREY KAYE: In fact, the hijackers carried nothing illegal on September 11. But security companies do have a history of well-publicized lapses-- one of the reasons lawmakers voted to federalize their workforce. On the NewsHour in September, Congressman James Oberstar said a federal takeover would restore public confidence in air travel.

REP. JAMES OBERSTAR (D) Minnesota: Putting airport security screeners on the same level as our customs personnel, our Immigration and Naturalization Service, other law enforcement people-- wearing a badge of the United States, sworn to uphold the law and the Constitution of the United States-- will give travelers confidence that they have the best trained, best prepared, committed security workforce to assure safe air travel.

SPENCER MICHELS: By mid-November, the government will have to hire, train, test, and deploy 40,000 airport screeners. Current screeners say they are underpaid and unappreciated.

SCREENER: I want to ask all these screeners, how many people here have recently caught a concealed weapon from going on a plane?

SPOKESPERSON: Everybody.

JEFFREY KAYE: Screeners and their union representatives are campaigning to keep as many jobs as possible, particularly since salaries are expected to take a huge leap. Current screeners are essentially being laid off. To be part of the new federal workforce, they will have to reapply, be tested, and go through background checks. The government says experienced screeners will be given priority, but some 25% of current screeners will automatically be ineligible because the new law requires that all screeners be U.S. citizens. That requirement makes no sense to Jeimy Gebin. Despite her non-citizen status, she served for three years in the U.S. Army before becoming a screener at Los Angeles International Airport.

JEIMY GEBIN, Airport Screener: We want to know why is it that we can go fight for this country, defend this country, and we can't come back home and have a job.

JEFFREY KAYE: Gebin and other non-citizen screeners are suing the government. ACLU Lawyer Mark Rosenbaum says the citizenship requirement won't make airports safer.

MARK ROSENBAUM, American Civil Liberties Union: In airports, thousands of employees with direct and unsupervised access to aircraft, to luggage, to passengers, even to airfields, have no requirement of citizenship.

JEFFREY KAYE: Congressman John Mica, chair of the House Aviation Subcommittee, says when Congress wrote the law, citizenship for screeners seemed so essential, there was little debate over that requirement.

REP. JOHN MICA: Maybe it's being overcautious, but this is the caution that members of Congress wanted to have as an additional requirement in the bill.

JEFFREY KAYE: Screeners are not the only ones complaining. Their employers will lose contracts worth hundreds of millions of dollars annually, so the companies are also seeking legal recourse. Worldwide Security Associates provides screeners at ten U.S. airports, including Boston and Phoenix. Chief Executive Officer Michael Ferrua estimates the federal takeover will cost his company $20 million a year in lost revenue.

MICHAEL FERRUA, Worldwide Security Associates: There should be some compensation due for that. We have not yet determined what that compensation amount should be or in what form it should be... it should come.

JEFFREY KAYE: The lawyer for several of the airport security companies is Kenneth Quinn, former general counsel of the FAA and a partner in one of the world's largest law firms.

KENNETH QUINN, Aviation Security Association: We are going to make a claim to the United States and seek compensation. As one of the chairmen of the board of one of the larger companies I represent said to me, "look, this isn't Russia. We don't just nationalize industries without paying for it."

JEFFREY KAYE: Congressman Mica has little sympathy for the screener industry and their appeals for compensation.

REP. JOHN MICA: The public and members of Congress come into contact with the screeners, and most of the attention was, fortunately or unfortunately, focused on that particular position. So, you win the business with the federal government, you lose business with the federal government, and that's the way the cookie crumbles.

JEFFREY KAYE: Despite the need to quickly hire a new federal workforce, the selection of screeners has not yet started. Recently people laid off from various airport jobs after September 11 waited for an hour to get into a Los Angeles job fair. Recruiters passed out applications, but there was little information for would-be federal screeners.

MAN: Are you taking applications for the airport?

SPOKESPERSON: Security screener?

MAN: Yeah.

SPOKESPERSON: No, we're not. They have a web site. Have you gone to the web site?

JEFFREY KAYE: John Magaw, the man tapped to head the new Transportation Security Administration, says he'll meet the hiring deadline but at recent Congressional hearings into the agency's progress said he expects the costs of security to be several billion dollars more than originally anticipated.

JOHN MAGAW, Transport Security Administration: This would be a part of causing us to fall short, yes, sir.

SPOKESMAN: And you anticipate falling short then?

JOHN MAGAW: I anticipate we'll fall short.

SPOKESMAN: How much short are we going to be?

JOHN MAGAW: We hope in another 60 or 90 days, we'll have that.

JEFFREY KAYE: Experts say that besides federalizing screeners and paying them better, their responsibilities also need to change for them to be effective. Darryl Jenkins heads the Aviation Institute at George Washington University.

DARRYL JENKINS, Aviation Institute: Now if you look at the best cases-- Israel, Germany, Great Britain, Singapore-- the countries that do the best job, what they do is they screen people rather than baggage, and people that they pull out, their security people are very adept at interviewing them, and this is the thing that provides the security.

JEFFREY KAYE: The interviews?

DARRYL JENKINS: The interviews, all right. And you go talk to an Israeli or a German-- it's the interview where they catch and trip up a lot of people. And we're not doing that.

JEFFREY KAYE: The specifics of screener training are still being planned, but experts say that greater attention needs to be paid to other vulnerable areas at airports. Crowds in lobbies present targets to potential terrorists. 600,000 workers who provide ground services should have more than their criminal histories checked, says Cathal Flynn, former head of security for the FAA. Flynn is now a board member of Argenbright, the largest screening company.

CATHAL FLYNN, Former FAA Security Chief: The really hard-core terrorists may not have criminal records. They maybe plotting mass murder, but they will not have criminal records. In other words, their fingerprint checks are going to turn up negative. So what has to be done is a much more thorough going search of the national intelligence and law enforcement, and through the FBI's investigations files, to determine the trustworthiness of people on the ramp.

SEN. RON WYDEN: What else can you tell us about establishing security screening for ground services and how long it's going to take to establish these procedures?

JOHN MAGAW: We have established some fairly competent procedures right now, but for me to discuss those in an open forum will just alleviate what we've already done. And I can tell you this: That from the time-- whether it's a truck or whether it's a person or whether it's a food product or whatever it is-- enters that compound, it's checked two or three times before it gets on the plane.

JEFFREY KAYE: As for the screeners, the new law requires more rigorous training. The government plans to begin training new federal screeners in May.

GWEN IFILL: Still to come on the NewsHour tonight: Amtrak's woes; and reaching out to the Arab world.

FOCUA - AMTRAK BLUES

GWEN IFILL: Is this any way to run a railroad? Tom Bearden begins our report on Amtrak's future.

TOM BEARDEN: Amtrak, the nation's passenger rail service, has always lost money, but this year the deficit was the largest ever: More than a billion dollars, jeopardizing its very future. Recently, the agency announced it was considering eliminating 18 cross-country train routes and laying off 700 employees. Amtrak President George Warrington asked Congress for help.

GEORGE WARRINGTON, President, Amtrak: Amtrak and Amtrak alone cannot fix the underlying policy and economic realities of intercity passenger rail service in this country. The Congress must appropriate $1.2 billion, or substantial route cuts will be necessary at the beginning of next fiscal year. In addition, an on-time reauthorization needs to occur this year to address the critical questions about the future of high-speed rail in America and to provide basic operating subsidies for what are, always have been, always will be, unprofitable services, but deemed to be in the public interest as public services connecting communities.

TOM BEARDEN: But the President's new budget proposal would give Warrington about only half of what he's asking for, $521 million. Amtrak was formed by Congress in 1971, when most of the private railroads bailed out of the passenger business. It runs 265 trains every day, carrying more than 23 million passengers a year over a 22,000- mile route structure. The Department of Transportation says it cost $3.3 billion to run Amtrak in 2001.

SPOKESMAN: In the front of the car, it's the rear car of the train.

TOM BEARDEN: Congress tired of subsidizing Amtrak a long time ago. Back in 1997, it told Amtrak it had to become self-sufficient, at least break even by the end of 2002.

SPOKESMAN: Acela Express!

TOM BEARDEN: Amtrak hoped that Acela, the new high-speed trains that run between Boston, New York, and Washington, would bring in most of the money needed to meet the Congressional mandate. But design problems delayed the trains' debut by almost a year and, according to the Department of Transportation's inspector general, Acela has seen some success, but still hasn't reached ridership or revenue projections, and cannot take Amtrak out of the red. The inspector general predicts that Amtrak will fall $263 million short of self- sufficiency at the end of this year. In 1997, Congress created a watchdog agency called the Amtrak Reform Council, which is now proposing a plan to restructure the entire national rail system. The Council wants Congress to make private competition with Amtrak possible within two to five years. It wants an independent government corporation to take over the northeast corridor, the routes between Boston and Washington, DC, and it says all future fiscal and rail system decisions should be made by an independent board separate from Amtrak's current board of directors. Congress must decide on Amtrak's fate by October of this year.

GWEN IFILL: Ray Suarez takes it from there.

RAY SUAREZ: For a debate about the future of Amtrak, I'm joined by two people close to the issue: Gilbert Carmichael is chairman of the Amtrak Reform Council; John Robert Smith is the Amtrak board member and the mayor of meridian, Mississippi. Mr. Carmichael, maybe we can start with the recommendations. What are you telling the Congress should be done in the near term with Amtrak?

GILBERT CARMICHAEL, Chairman, Amtrak Reform Council: Well, we found out that the American people... we've been around the country and held hearings. We found out that the American people want a national passenger rail system almost passionately, and we have been studying Amtrak, the organization, for the last three years intensely. I've got a small council of about 11 people counting the Secretary of Transportation and a small staff of about seven. We've gotten a lot of information out of Amtrak. We've had a hard time getting all the information that we do need, but we are recommending that the Amtrak organization, as it presently exists, has to be separated so that it can function better and the Congress and the American people will know what they need the money for. Right now Amtrak is A... I call it a conglomerate of things. It's a federal agency. It's a train-operating company, and it owns a big piece of real estate called the northeast corridor that runs between Washington and up to Boston and now even up to Portland, Maine. So it's trying to be everything to everybody.

RAY SUAREZ: Mayor Smith, on first pass, what do you think of the plan?

MAYOR JOHN ROBERT SMITH, Amtrak Board Member, Meridian, Mississippi: The plan is calling for the creation of several small Amtraks, two separate companies, 11 separate regional corridors. That could be as many as 13 little Amtraks. The debate must be about what is the future of passenger rail? What is the national system? How much does it cost? And how are we going to pay for it? That needs to be the focus of the Congressional reauthorization and debate. We think it will be. The good part of this story is Mr. Carmichael and I agree where we ought to be in 15 or 20 years, even though we disagree on the creation of more administrative duplication within the system. We think the argument is not about creating more little Amtraks but about properly funding the passenger rail system that we have today. That passenger rail system must evolve into interconnecting high speed rail corridors and serve this country. The Amtrak board of directors is about change, but we're about getting the authority for the formation of those interconnecting high-speed rail corridors, the development of what Mr. Carmichael has called a new interstate system of steel. Give that authority to the Department of Transportation. It is a federal authority. They need to take that on. It needs to be funded. There also needs to be capital and operational funding for the passenger rail system, which is Amtrak today.

RAY SUAREZ: You heard the mayor's critique of the Amtrak reform council recommendations. How does something become more efficient by having more boards, more chiefs of staff, more sets of letterhead and the other things that occur when companies break into pieces?

GILBERT CARMICHAEL: I served on the Amtrak board myself during the George Bush, Sr.'s administration. I know the organization intimately. Amtrak, as it's constituted today, really can't function. Its report card is laying out on the table there. It's had $25 billion and 30 years, and it has not produced a modern rail passenger system for this country. Now, out of this rubble that I see out here that we've been spending money on for so long, there is a need to create a new national rail passenger company and to fund it properly. And I think Congress, if it understands that it's paying for certain trains or for the train system, will fund it properly. But as long as Amtrak keeps trying to do it collectively and keeps fighting to keep the Northeast corridor infrastructure in their structure and it keeps trying to do all of the railroad policy for the nation, we're not... Amtrak... the possibility of Amtrak succeeding is just almost unbelievably impossible down the line. If the old Amtrak company will split itself into divisions and give us good, clean, clear financial statements, I think it can get the money that it needs to run the trains. I don't think the process they used the other day of threatening to stop the trains if they don't get a billion and a quarter... the question is, a billion and a quarter for what? Where are you going to put it?

RAY SUAREZ: Mayor, what do you have to say to that?

MAYOR JOHN ROBERT SMITH: First of all, let's look at that $25 billion over 30 years. During that same time, we've invested $750 billion in the airline industry and in the highways of this country. In fact, we spend more in this country on icing the roads and collecting the road kill off of those highways in one year than we spend on the entire national passenger rail system. That's a shame. That can't go forward. I'm glad that Gil and the ARC agree that there must be significant operation and capital funding, but let's look at the scorecard for Amtrak. Over the past five years, we have grown revenue by almost 40%, ridership is up by 20%. During that whole time we saw operational subsidies cut by almost 80%. Amtrak has been doing its job. So now it is time for Congress and the administration to do their job. We've done ours. They need to do their job. And we need $1.2 billion. I'll tell you what we're going to do with that, and that was made very clear by George Warrington. $840 million of that $1.2 billion is for capital. $200 million is for running the national long-distance train network that we have that I believe in, that Mr. Carmichael believes in, and $100-almost-70 million of it is to fund the excess railroad retirement, which is really a pass-through to Amtrak. There's where the money is. It's justified. We're hearing from Congress that they intend to fund it and that they intend to actively engage in the reauthorization of Amtrak and the development of these interconnecting high-speed rail corridors, which is the future for this country.

RAY SUAREZ: Well, Gilbert Carmichael, for people outside some parts of the West and the Northeast corridor, how do you make the sale? Why is this a vital issue? I've heard the mayor's numbers, I've heard your numbers. In some parts of the country, where passenger rail has become almost irrelevant, it just sounds like two guys throwing numbers at each other.

GILBERT CARMICHAEL: Okay. If Amtrak was wise-- and I hope John and that board will do it-- they'll split themselves now and agree with our council report and let's get on with submitting to Congress a very legitimate budget for a national rail passenger system, how to develop the corridors and how to put it altogether and produce a new, modern train system. This country wants it. Congress would like to do it. The Bush administration put out in their budget a very good, strong statement in there that they are quite willing to work with the states and the freight railroads, and Amtrak operates on 20,000 miles of the freight railroads, and they need help too. So this reauthorization that we're talking about and funding for Amtrak next year, we've got an excellent opportunity here to create a whole new Amtrak operating company. I don't think we're going to lose the national rail passenger concept or the passenger trains, but I think we're going to get a new company that functions better and is not managing its money as poorly as the old Amtrak is. No disrespect to John, the board, or to George Warrington and his management team -- nobody could run that corporation the way it's presently organized. And we shouldn't continue with it. I beg them to split it up now and let's get on with it.

RAY SUAREZ: Go ahead, briefly, Mayor..

MAYOR JOHN ROBERT SMITH: Let me answer the question that was asked that really wasn't answered, and that is how do you rationalize a system of interconnecting high-speed corridors across this country? And it's about connectivity. It's about the same will and desire this nation needs to have on developing passenger rail that it had on developing the interstate highway system. They didn't build the interstate highway system through Mississippi based on the number of cars on the dirt roads of Mississippi at that time. They built it because we're one of the 49 states of this continent, we deserve to be connected, and it's about economic development, bringing connectivity and opportunity to our people, and our people are not just the Northeast corridor. It's Mississippi, Alabama, Tennessee, and Texas. And the Northeast corridor was an experiment for this nation in high-speed rail. It's been a successful experiment. Now other parts of the country want to learn from that success and implement it. Where Congress and the administration I believe ought to be is detailing a 15-year plan in five segments of how this national system will be sustained and how it will be evolved into these high-speed corridors over these 15 years. Each five-year segment would show what will be happening within those corridors and within the national system. Any investment in the national system ought to be that which propels it and moves it towards high-speed and higher-speed rail. You see ridership and revenue grow dramatically when you do that.

RAY SUAREZ: Mayor Smith, Gilbert Carmichael, thank you both.

FINALLY - REACHING OUT

GWEN IFILL: Finally tonight: Reaching out to the Muslim and Arab worlds. Media correspondent Terence Smith examines the government's redoubled effort in the wake of September 11.

TERENCE SMITH: The people in these Cairo streets and elsewhere in the Arab world are about to hear a new sound. (Britney Spears singing) Call it the top 40 meets the Middle East.

DJ: Famous singing star Jennifer Lopez.

TERENCE SMITH: This English language demonstration tape is a translated example of the planned format for the Middle East radio network.

NEWSCASTER: At 15 past the hour, this is news of the moment. President Bush takes action against more terrorist groups.

TERENCE SMITH: Debuting in the next few months, it will be part of an ambitious new U.S. Government campaign to win over the hearts and minds of listeners in the Middle East, especially the young in predominantly Arabic- speaking countries. The broadcast will be a mixture of tunes, both western and Middle Eastern, and talk, in Arabic. It will be available to a vast potential audience: The estimated 99 million listeners aged 15 to 34 from Egypt to the Persian Gulf. Gary Thatcher is overseeing the startup of the service.

GARY THATCHER: We're going to clearly identify that this is U.S. International Broadcasting. However, our intent is not to identify ourselves as the voice of America. We want to get a name that signifies something to the people in the Arab world, something that has a bit of verve, that's catchy.

TERENCE SMITH: Initially the broadcast will emanate from this television, and online facility being built at the Voice of America headquarters in Washington. Congress has appropriated some $30 million to get the Middle East radio network up and running. By summer, it is expected to be broadcast from facilities in this "media city" in the Persian Gulf capital of Dubai. Gary Thatcher expects some local resistance to the new service.

GARY THATCHER: It's quite clear that some people would not like these broadcasts to go on at all because we do intend to tackle sensitive subjects. We intend to talk about things that are... perhaps are unwelcome in some areas.

SPOKESPERSON: Up to the minute news direct from the Middle East...

TERENCE SMITH: Mamoun Fandy, professor of Middle East studies at the National Defense University, says the musical approach may resonate with the under-30 crowd that constitutes the majority of almost every Arab country.

TERENCE SMITH: So you've heard a little bit of this. What do you think?

MAMOUN FANDY, Professor, National Defense University: I think it's good for Washington. The question is how much of the market will would you get? And probably America's name would sell this, if you have more American content, probably more cultural content-- soft content rather than just hard news.

TERENCE SMITH: The new radio network is just one part of a multifaceted government campaign of public diplomacy designed to blunt the fervent anti-American sentiment that is prevalent in many parts of the Arab and Muslim world. The Hearts and Minds campaign is gearing up just as the military campaign in Afghanistan is winding down. Plans call for expanded broadcasting to the region, ad campaigns designed to stress American values, and more frequent appearances by U.S. Government officials on regional media outlets. Part of the effort is being coordinated from this White House war room.

SPOKESPERSON: The first thing you'll notice is the clocks. We have time zones not only in America but around the world.

TERENCE SMITH: And others like it in Great Britain and Islamabad, Pakistan. Counselor to the President Karen Hughes says the challenge is tracking what misinformation is being spread and rapidly responding.

KAREN HUGHES, Counselor to the President: You have seen the catalog of lies, which is our document documenting the misstatements that have been made by the Taliban. And this is all updated by the date of the statement, the allegation and the actual facts.

TERENCE SMITH: Truth, of course, can be in the ear of the listener. Beyond the new radio venture, increased government funding is already helping the Voice of America expand its broadcasts in Dari and Pashto languages into Afghanistan and throughout Central Asia. And a separate U.S. Government network, Radio Free Europe/Radio Liberty, has expanded its broadcasting to the region, and revived the dormant Radio Free Afghanistan. Tom Dine is President of RFE/RL.

TOM DINE, President, Radio Free Europe/Radio Liberty: We will be reporting news and information about local parts of the Afghan landscape, and we will also be reporting what goes on in Kabul. If we can help Afghans communicate with each other and... so that the people in Herat know what the people in Kandahar think and know, et cetera, then that will be a contribution to tying things back together as best we can.

TERENCE SMITH: And at the State Department, there is a specific title for a new mission. Former top Madison Avenue ad executive Charlotte Beers is the undersecretary for public diplomacy; she made her reputation with hugely successful commercial campaigns such as those for Uncle Ben's Rice and Hoover Vacuums. Now, she is trying to rebrand America.

CHARLOTTE BEERS, Undersecretary of Public Diplomacy: I'm very concerned that we get our information out in full context. We know that in many of the countries where our messages are sent, that often they're distorted, they're one- dimensional, or they're simply not heard. We also know that often we are not the relevant voice, and we are searching in many different places for those voices, which will be relevant and credible.

TERENCE SMITH: One of Beers' top aides is state department special advisor Christopher Ross. The Arabic-speaking former ambassador to Syria says the public diplomacy campaign has a wide scope.

CHRISTOPHER ROSS, Special Adviser, State Department: First, of representing what this country is about, the American values that define us; second, to encourage a process of greater democratization, greater openness, stronger civil society in the countries of the region; and third, to help to develop educational systems that give the younger generation the tools that they would need to participate in modern life in a way that is diametrically opposed to the program of someone like Osama bin Laden.

TERENCE SMITH: Showing how careful the U.S. Government has to be in its approach, the State Department was stung by criticism involving this ad. It ran in U.S. newspapers, featuring the alleged hijacking ringleader Mohammed Atta. But it sparked criticism in the Arab world because the ad text assigns facts and statements associated not with Atta, but with alleged September 11 hijacker Zacharias Moussaoui. For example, the ad says of Atta, "He wanted to learn to fly, but didn't need to know how to take off and land." That was Moussaoui, not Atta. Christopher Ross said he'd heard the criticism that the ad might generate greater distrust among already skeptical Arab countries.

CHRISTOPHER ROSS: Preparation of the text, in retrospect, could have been done differently. We could have put up a generic picture of a terrorist above, but that wouldn't have had the same effect as a face that was immediately recognizable.

TERENCE SMITH: Another controversy arose when a Defense Department leaflet dropped in Afghanistan used an altered photo of a clean-shaven Osama bin Laden in a western suit. The leaflet read: "Osama bin Laden, the murderer and coward, has abandoned you." Defense Secretary Donald Rumsfeld was asked if the doctoring of the photo might give the Muslim world reason to doubt America's word.

DONALD RUMSFELD: I had not thought about it, and I was not aware of that particular leaflet, although I think that leaflets have been generally very good and very effective.

TERENCE SMITH: Misfires like these hurt the effort, in the view of Professor Fandy.

MAMOUN FANDY: It was absolutely ill- conceived-- yeah, absolutely counterproductive. That particular photo was read as something that is silly. The image of the United States in the Muslim world is a country that's almost omnipotent and omniscient and does not make mistakes.

TERENCE SMITH: Not everyone is convinced that America can be marketed.

TOM DINE: You can't sell America. It isn't mayonnaise. America is different than that, and it's a lot more sophisticated, and it takes a lot more talent than I think we're applying now.

TERENCE SMITH: Meanwhile, the government is pursuing more outreach efforts. Secretary of State Colin Powell took questions recently in this MTV forum that linked him to young people in six cities on four continents. He described the challenge.

COLIN POWELL: The United States has to do a better job of presenting our case of who we are, what we are, what our values system is to the Islamic world and to nations around the world. And so I'm investing a lot of time and money and effort in that, in the Department of State and throughout the United States government. I think we have a great story to tell. I'm very proud of my country. I'm proud of what we have achieved, and I'm proud of what we have helped so many people around the world achieve. And it's a story we've got to do a better job of selling to the rest of the world.

TERENCE SMITH: And the White House has announced that boxing great Mohammed Ali will tape a message to be distributed to fellow Muslims abroad.

MAMOUN FANDY: I think Muhammad Ali is a great idea because Muhammad Ali has both the image and the credibility. People in the Muslim world see Muhammad Ali as a man who tells the truth. Even if the American government tells him to sell something to the Muslim world, he will tell the truth. This is a very classic case where the messenger and the message mesh very nicely. That's a perfect idea.

TERENCE SMITH: And administration officials such as National Security Adviser Condoleezza Rice are continuing to reach out to the Arab media in weekly interviews, such as this one with Abu Dhabi TV. But Mamoun Fandy, who has informally advised the State Department on its campaign, says a lot of repair work remains to be done.

MAMOUN FANDY: I think the public diplomacy campaign has done pretty badly, thus far. I think public opinion has changed in the Arab and Muslim world due to the defeat of the Taliban, but not because of an effort, a conscious effort that's made by those who are running the public diplomacy campaign.

TERENCE SMITH: The administration and its critics agree on one point: Changing attitudes about America abroad will take a long, sustained effort that could easily outlast the military phase of the war on terrorism.

RECAP

GWEN IFILL: Again, the major developments of the day. In Tokyo, President Bush said the Japanese economy "is on the path to reform." And Britain, Pakistan, and Saudi Arabia sent planes to Afghanistan to take pilgrims to Mecca. A shortage of flights caused a riot last week during which the Afghan aviation minister was killed. An editor's note before we go tonight: In Jeffrey Kaye's report on airline security, we inadvertently identified Democratic Senator Ron Wyden of Oregon as a Congressman. He is most definitely a Senator. We'll see you online, and again here tomorrow evening. I'm Gwen Ifill. Thank you and good night.