The NewsHour with Jim Lehrer

JIM LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight: A summary of today's news; updates on the Afghan war, and rebuilding Afghanistan; a Newsmaker interview with Admiral Dennis Blair, the U.S. military commander in the Pacific; the story of the Red Cross' problems over blood; the latest from Dr. Anthony Fauci on the use of an anthrax vaccine; and a report on what now, what next for economic stimulus legislation.

NEWS SUMMARY

JIM LEHRER: There was a rebellion by al-Qaida prisoners today in Pakistan. They had been arrested over the past two days, crossing the border from the Tora Bora area of eastern Afghanistan. They grabbed weapons from their Pakistani guards and tried to flee. Seven prisoners and six police were killed in the fight. Pakistani tribal forces and helicopter gunships chased the escapes into some mountains. They caught 21; 20 remained at large. India and Pakistan traded harsh words today. India's prime minister said his government is considering war, as well as diplomacy, in response to a suicide attack on parliament last week. He said Pakistan knows who's responsible and must crack down. A Pakistani official said if war "is exercised, then it will be paid back in the same coin." In Washington, a State Department spokesman urged caution.

RICHARD BOUCHER: We think that there is a need here, an opportunity here, for both India and Pakistan each to take action against terrorists. The President has made clear that it's important for India and Pakistan to make a common cause against terrorists who are trying to destablize this whole region. It's not the time for India and Pakistan to start taking action against each other.

JIM LEHRER: In the Middle East today, the Palestinian Authority said today it has arrested 15 of its own police officers since Monday. They're suspected of participating in attacks on Israelis. Israel welcomed the move. The President of Argentina declared a state of siege today; it was an effort to stop looting and violence around the capital of Buenos Aires and other cities. Police fired rubber bullets and teargas at crowds protesting the country's economic crisis. Thousands of Argentinians have been sporadically looting in several cities since a national strike was called last week. The country is in the fourth year of a severe recession. President Bush endorsed a new economic stimulus plan today. It's a revised version of one approved by the house in October. Mr. Bush said it had enough bipartisan support to pass the house and Senate. But Senate Majority Leader Daschle later said he did not think so. It could face a House vote tonight. We'll have more on this story later in the program. Federal health officials today began offering an anthrax vaccine to about 70 workers at the Capitol. They may have been exposed to high levels of the germ through the mail. The vaccine is intended to kill any spores lingering in the lungs, but it's considered experimental when used after exposure. We'll talk to Dr. Fauci about this later in the program. Underground fires at the World Trade Center site have been extinguished. New York Governor Pataki today said they were put out this week. They had burned since the Twin Towers collapsed September 11th, fueled by documents and office furniture among other things. They had slowed recovery efforts. A fire official said some small pockets may still burn.

UPDATE - AFGHANISTAN - MILITARY CAMPAIGN

JIM LEHRER: The transition from war making to peacekeeping in Afghanistan, and the view of the war on terror from the Pentagon. Terence Smith has that.

TERENCE SMITH: Outside the southern Afghan city of Kandahar, the first Taliban prisoners captured in Tora Bora arrived at the recently constructed stockade at the Marine Corps forward operating location known as Camp Rhino.

MAJOR CHRIS HUGHES, US Marines: We have received 15 battlefield detainees; they will be safeguarded, provided food, water, shelter, medical care. They are free to practice their religion and to meet with representatives of the international committee of the Red Cross.

TERENCE SMITH: FBI Agents and CIA officers are on scene to conduct interrogations.

AGENT Tom KNOWLES, Senior Supervisory Agent, FBI: The detainees, while they are being held in accordance to the Geneva Convention and receiving all the treatments, we're still trying to decide who we want to talk to, who's got information, and we've got to figure out how we work by our laws over here under this particular matter.

TERENCE SMITH: As the FBI And CIA were arriving in the south, 12 members of U.S. Special Forces were leaving the North. They bade farewell to the Northern Alliance soldiers with whom they fought.

CAPTAIN MAR: I thank you for coming today. We have accomplished much together in our fight against the Taliban and al-Qaida.

TERENCE SMITH: At the Pentagon today, Defense Secretary Rumsfeld, just back from a tour of the Afghan theater and a NATO meeting in Brussels, was asked about the status of the Taliban and al-Qaida fighters fleeing the Tora Bora region.

DONALD RUMSFELD: I think what's happened, basically, is that we have 100% of the problem people, and that exactly what I've said has happened. Some have been killed-- not a trivial number, a lot. Second, some have switched sides and joined the anti-Taliban, that some of the Taliban fighters have now become anti- Taliban. Third, some have just gone home, dropped their weapons-- these are Afghans-- and they've gone back to their villages and said "to heck with it. I'm not going to do anything." Some have just drifted away in the mountains and into the villages, and maybe they're laying in wait. And maybe they're going to cause mischief later. Maybe they still like the Taliban. The al-Qaida do not drift into the villages, particularly. They're still in some pockets. They're still fighting, in some cases. Some have gotten across borders. A lot have been killed. A good number has been captured most recently. And they are dangerous and armed and have more difficulty blending into the Afghan villages or mountains, because, in many cases, they don't know the language. In many cases, they just don't fit in. And in many cases, they're not wanted. Now, so it's all of those things that are happening, and we intend to pursue the al-Qaida who do leave the country and try to find them and try to stop them.

TERENCE SMITH: Rumsfeld was asked specifically about the whereabouts of Osama bin Laden.

DONALD RUMSFELD: He's either dug in some tunnel or he's alive. And if he's alive, he's either in Afghanistan or he isn't. And it does not matter. We'll find him one day, and we'll know what's happened.

REPORTER: Mr. Secretary...

DONALD RUMSFELD: And he is not the problem, the entire problem. The al-Qaida is the entire problem, and the other terrorist networks are the problem. So he is important. We're after him. We intend to find him. I believe we will, but we haven't.

REPORTER: And if he turns up somewhere thumbing his nose at you...

DONALD RUMSFELD: We will go see about that thumb.

TERENCE SMITH: As for possible havens for fleeing al-Qaida fighters, the secretary pointed to the border area between Yemen and Saudi Arabia, where the Yemeni government is pursuing suspected al-Qaida members.

DONALD RUMSFELD: There's a portion of Yemen that the government of Yemen has difficulties with. It has been known to be a haven for terrorists, and I suppose, criminals and various types of bad people, including al-Qaida. We have made it very clear, from... for a period of months, that if these people go somewhere else, we'll go find them. Therefore, if I were involved in a country that was a likely prospect for their next home-- and certainly that area is familiar to the al-Qaida, as they've lived in Somalia, they've been in Sudan; there are other places that they might logically go-- I would want to try to clean out that crowd, too. And apparently that's what happened.

TERENCE SMITH: Rumsfeld said that no U.S. forces were currently involved in the anti-terror efforts in Yemen. When asked about reports that the U.S. might expand the war against terror to Somalia, Rumsfeld replied "nonsense." 200 British troops, the vanguard of an anticipated 3,000 5,000 member United Nations peacekeeping force, prepared to move south to Kabul from Bagram air base today. The full force is not expected to be in place until January. U.S. troops are not scheduled to be part of the mission, but will support it logistically and with intelligence. U.N. Secretary General Kofi Annan sounded a cautionary note on the upcoming peacekeeping mission and the prospects for establishing a stable Afghan government.

KOFI ANNAN: When you start an operation like the one the U.N. is about to undertake in Afghanistan, a country that has been at war for over two decades, you do worry about getting the population to work together.

TERENCE SMITH: Meanwhile in Rome, Hamid Karzai, the interim Afghan leader, said he welcomed the peacekeepers. After meeting with the former king of Afghanistan, Mohammed Zaher Shah, Karzai spoke of his new responsibilities and of his duty under Islamic law.

HAMID KARZAI: The human rights is very much within the confines of Shar'ia. Shar'ia protects human rights.

REPORTER: What will be your first task when you get home?

HARMID KARZAI: Peace. Security.

TERENCE SMITH: To guarantee that security, Karzai said, Afghan forces would continue efforts to root out the remaining pockets of Taliban resistance.

JIM LEHRER: Now another front in the terrorism war. Margaret Warner has that story.

MARGARET WARNER: As the Bush administration expands its global campaign against terrorism, one region emerging as a primary focus is Southeast Asia. There are radical Islamic groups now operating in the Southern Philippines, Malaysia and Indonesia. And U.S. Intelligence believes they all have ties, to varying degrees, to Osama bin Laden's al-Qaida network or Islamic training centers in Afghanistan. A point man in the war on terrorism in Asia is Admiral Dennis Blair, commander in chief of the pacific command. His command stretches from the West Coast of the United States to the tip of eastern Africa. Admiral Blair recently completed a six-nation antiterrorism tour in Asia, and he joins us now. Welcome, Admiral.

ADMIRAL DENNIS BLAIR: Nice to be here.

MARGARET WARNER: How have the attacks of September 11th changed your focus and the focus of the entire Pacific command?

ADMIRAL DENNIS BLAIR: Well, we have focused on stamping out terrorism in our part of the world, and it's really an international and an inter-agency effort. We're using a lot of the skills we had before, fighting things like drugs and piracy and terrorism, but we really intensified it, widened it and put a lot more emphasis on it.

MARGARET WARNER: What countries are you most concerned about?

ADMIRAL DENNIS BLAIR: I'd say the, if you look at Southeast Asia, there's no Afghanistan there. All of the governments in the region are horrified by what happened on September 11th, and they have supported the campaign against terrorism in various ways from direct support in the cases of Australia and Japan to over flight rights and logistics support in the cases of the Southeast Asian countries. So we're working with people who think that this is bad and want to work. Sometimes they're not as capable as they'd like to be in patrolling their own borders, in dealing with criminal groups and terrorist groups, and that's where we can really work together and stamp out terrorist groups and the infrastructure that supports them.

MARGARET WARNER: Before we go onto what we can do, just tell us a little more about where the real problem areas are.

ADMIRAL DENNIS BLAIR: It's sort of an arc that stretches from the southern Philippines, northern Malaysia around through across some parts of Indonesia, which is a huge country, 17,000 islands, and as wide as the United States, up into say Burma, which is a source of a lot of the heroin and methamphetamines, which goes to Southeast Asia to the rest of the world. So it's this scene of lawlessness where not only can terrorists find a place to work from but also pirates and drug runners and gun runners and people who are a threat to the region and to the United States.

MARGARET WARNER: Now, are there, I've seen various lists put out by the U.S. Government, or purported to be from the U.S. Government about countries that are the next focus, and we named three there: the Philippines, Indonesia and Malaysia. But are there real al-Qaida cells operating in these countries? How would you define the terrorist enemy in your part of the world?

ADMIRAL DENNIS BLAIR: I would say that a lot of historical ties - the Alusa Aith Group, which is one of the groups in southern Philippines, was founded by people who spent time in Afghanistan. They are a group that is mostly criminal but certainly has the potential to be used by al-Qaida as a base of operations. There's a --.

MARGARET WARNER: Excuse me. Is that the group that has the American couple hostage, the missionaries?

ADMIRAL DENNIS BLAIR: That's the group that has the two American missionaries, the Burnhams and also a Philippine woman who is also a hostage there. So there's that group, and a country like Indonesia, a huge country having difficulty patrolling all of its borders, especially under the economic difficulties it faces. There are groups that have historical ties to Afghanistan, some to Osama bin Laden. So there's a potential there for international terrorist groups to find support. Other parts of Southeast Asia are available for laundering money, getting forged documents, holding meetings, networks. So it's not only the individuals, but the places they might like, the operations that have to support them.

MARGARET WARNER: How concerned -- we just heard Secretary Rumsfeld talk about where al-Qaida people may be fleeing to, whether they're leaving Europe or Afghanistan. Is there concern that this part of the world might become a sanctuary?

ADMIRAL DENNIS BLAIR: We like to make this part of the world as unattractive as we can for the al-Qaida group to come, for them to consider it to be dangerous to them, and that would not only cut down their wanting to come there, but we are working hard to be able to get them if they do come through, and several have been caught and others have been, others have been deterred from coming.

MARGARET WARNER: And just one other question on these groups or operatives. Is their focus mostly, I mean are they looking out, are they a threat to U.S. interests in a direct way or western interests? Or are their targets more domestic?

ADMIRAL DENNIS BLAIR: The groups that have gone against the United States have primarily used Southeast Asia as a staging base and a transit point. If you go back to say '95, '96, Ramsey Yousef, the group that later put a bomb, the first bomb in the World Trade Center, had a plot to take down twelve airplanes coming out of manila, many of them with Americans on them. So there is a history of using Southeast Asia and Asia for these sorts of operations. However, it's kind of an unholy alliance, international groups are willing to help local groups, they're trying to overthrow, and cause damage in their own governments in return for help with the international groups. You've got to go after all of them.

MARGARET WARNER: So how do you, as a military man, as the commander, how do you use U.S. military assets to help these other governments? I might point out to our viewers that there was a story in the "Washington Post" about all the top commanders submitted to Donald Rumsfeld their plans for anti-terrorism, and he liked yours best. So tell us, what are the elements from the military perspective?

ADMIRAL DENNIS BLAIR: Yeah. I'd say from our point of view, the Philippines is perhaps the best example, there's this area in the southern Philippines that has an insurgent group with Islamic organizations, which has been going on for quite some time, there's an Abu Sayeff group, which is mostly criminal, but also with some historical connections to al-Qaida. The Philippine government - and it has these hostages you talked about - the Philippine government has deployed troops to the islands of Basalon and Holo and has been working against them for several months now. They have not been completely successful although they've cut the number of hostages from the 30s down to about three right now. President Arroyo met with our President Bush and they agreed that we would provide train assistance, we would provide advisors, we would provide maintenance assistance to make the Philippines more effective in being able to not only free hostages but eliminate the Abu Sayeff group. After that the President agreed there would be economic assistance so there would be a better standard of living for the people in that part of the country. And we're trying to take out the environment which breeds terrorist groups as well as the terrorists themselves.

MARGARET WARNER: When you talk about training, though, and advisors, are we talking about U.S. commanders or forces running seminars for officers of the army, or are you talking about maybe having advisors, U.S. forces on the ground with battalions of local troops?

ADMIRAL DENNIS BLAIR: Both. We have already trained a, one infantry unit called the Light Reaction company, LRC, last year, we did this after the first American hostage in the Philippines, Jeffrey Schilling, who was in fact released. And this involves everything from individual squad training up through how a company commander runs hi forces, plus some equipment. So that training will be available, and it's across the board, it's an intelligence fusion, it's in infantry skills. Then we will make available American advisors with the units in order to make sure the kind of training we're giving is the right kind of training to be most effective in the field. But I need to emphasize that as President Arroyo said, the fighting, it's a Philippine fight, they feel it's their responsibility, they're in charge and we're providing assistance.

MARGARET WARNER: Some Americans might ask, well, if there are American hostages and we've now established that they are being held by terrorists, why wouldn't U.S. forces be going in and just doing the job?

ADMIRAL DENNIS BLAIR: Because it's in the Philippines and the Philippines feel it's their responsibility to take care of foreign guests in their country as well as their own people. And a great majority of hostages have been, in fact, Filipino hostages, and the Philippine armed forces and police have been the ones with the primary responsibility.

MARGARET WARNER: How concerned does the U.S. have to be, or do you have to be about cooperation with military forces in that part of the world that have a bad human rights record? I'm thinking for example of Indonesia.

ADMIRAL DENNIS BLAIR: We, our procedures are whenever we're cooperating with a military unit, we check to see that members of that unit or that unit have not been involved in abuses of human rights in the past, and then we make a judgment as to whether we operate with them or not.

MARGARET WARNER: But isn't there - aren't there Congressional restrictions on some of this cooperation, in the case of in Indonesia?

ADMIRAL DENNIS BLAIR: In the case of Indonesia there are restrictions in general on some military cooperative measures until Indonesia takes progress on certain items. But in other areas, which are in both of our interests, we do cooperate with the Indonesians, and certainly terrorism is an area in which we should work together, and will be working together, intelligence exchanges, for example, working together on countering piracy, in the Strait of Malacca. But a full by bilateral relationship will depend on the completion of reforms within the Indonesia an armed forces.

MARGARET WARNER: Are you finding that these governments are more interested in cooperating with you? You talk a lot about intelligence. We don't have to go totally into that. But my understanding is before September 11th there was some reluctance about sharing a lot of intelligence with the U.S. -- has that changed?

ADMIRAL DENNIS BLAIR: I think September 11th has made a difference. I mean it was a shock to governments and people in Asia just as it was to us in the United States. And it's made us realize that we're going to have to work on this together, and the first part of working together is no one let the real picture is. So I've seen barriers come down between us and other countries that were there before. I've also seen, by the way, some stove pipes within our own government that...

MARGARET WARNER: Stove pipes?

ADMIRAL DENNIS BLAIR: That's military jargon that means separate organizations. But the sharing between the Department of Defense, Federal Bureau of Investigation, the intelligence agencies like the CIA, has taken place on an unprecedented level because of this common campaign within our government against terrorism also.

MARGARET WARNER: Finally, and this could be a whole discussion itself, we don't have time for that, but India -- India is in your bailiwick, though Pakistan is not, and I know you were just there on this trip. How does the U.S. help India combat terror but at the same time try to avoid a military confrontation between India and Pakistan? Because of course India blames Pakistan for supporting the terror that goes on in India and in Kashmir.

ADMIRAL DENNIS BLAIR: Both we and the Indians need to combat terrorism that afflicts all of us. The operations in Afghanistan are in the U.S. interest because of that was the nest that attacked news the World Trade Center and the Pentagon. That was also the training ground for terrorists in Kashmir. So that's in our interest. Where we go in the future is to suppress terrorism, which is against both of us, but also to do it in a way that does not conflict with our goals with other countries.

MARGARET WARNER: All right. Admiral Blair, thank you very much, thanks for coming.

ADMIRAL DENNIS BLAIR: Thank you, Margaret.

FOCUS - REBUILDING AFGHANISTAN

JIM LEHRER: Now back to Afghanistan and the bumpy road ahead with the new government that officially comes to power in Afghanistan this weekend. Tristana Moore of Independent Television News reports from the capital city, Kabul.

TRISTANA MOORE: The Taliban are no longer to be seen. There's talk of peace now in Kabul. We went to the city's main bazaar today to meet the money changers. For them, business has never been better. Yesterday I changed the money and it was 35 pounds. And what is your rate? The Russians are now helping to print the national currency, the Afghani, which economists say has stabilized. But there are still daily fluctuations. As a parting gesture last month, the Taliban plundered more than $5 million from the central bank.

SPOKESMAN: (Translated): The Afghani is down. There is no agriculture, no industry to speak of here. We've had more than two decades of war. Many people have no jobs. It's little surprise that the currency has lost its value.

TRISTANA MOORE: At Kabul's telephone exchange, united front or Northern Alliance soldiers took us to the nerve center of operations, a room buzzing with activity. The Germans donated this phone system 50 years ago and it survived repeated bombings. Today, only half of Kabul residents can make a call, and even then it's pretty unreliable. The engineer told us that it often takes him more than an hour to phone a local number. And what about the postal service here? Well, I've come to the only post office in town, Baktar Speedy Post, to see if I can send this letter. There's no state-run post office in Kabul, only this privately run company, which ironically, was set up by the Taliban.

SPOKESMAN: All government offices, right now, they are not operated. We are picking up from here, and from our sources to Pakistan we are sending to England.

TRISTANA MOORE: Almost two thirds of power lines in Afghanistan don't work. In Kabul, there are daily power cuts. At the city's biggest substation, Abdullah Sultani told me he hasn't been paid for six months. The United Front hasn't been able to give him a salary either. Half of the buildings in Kabul were destroyed in the civil war of the early '90s -- hardly surprising, then, that many institutions barely exist. The new interim government needs massive foreign investment, but must also involve Afghans themselves in rebuilding their country.

SPOKESMAN: It needs security as a precondition for that, and it needs allotted resources, and it needs somehow to have this delicate sense of Afghan ownership for the whole process, and it's going to be very difficult to weigh a lot of conflicting issues as we move forward.

TRISTANA MOORE: With the fighting in Kabul now over, many refugees are starting to come back, occupying ruined houses. Fazia lives here with her husband and four children. She says food is still expensive and water supplies erratic. "I want my children to become doctors, engineers, and teachers," she says. "They must go to school." After a month in power in Kabul, the United Front claims life is improving for Afghans. Major public works programs are already underway.

SPOKESMAN (Translated): Our first priority is to rebuild the roads in Afghanistan. We started working on the road from Kabul to Mazar and Jalalabad. Then we'll be able to link up all the big cities.

TRISTANA MOORE: A third of all Afghans depend on food aid for their survival. These women in Kabul have been waiting for three days to get their 50 kilos of wheat. Despite talk of liberation now that the Taliban days are over, the women are still wearing their burqas, and many don't have any jobs.

WOMAN (Translated): We suffered so long under the Taliban. I couldn't go out and work. I'm a teacher but I have no job. Why should I be forced to queue to get food?

WOMAN: When I see my people here, I became very unhappy. If our country had enough budgets, money... Our people never came here for the particulars WFB. This is nothing for our people.

TRISTANA MOORE: The World Food Program is now organizing the biggest distribution of aid in Kabul. But outside the capital, many Afghans have still not received any food at all because roads are blocked by bandits and warlords. Rebuilding Afghanistan will depend on the ability of the interim government to maintain law and order, as well as the long-term commitment of the international community.

JIM LEHRER: Still to come on the NewsHour tonight: Blood and the Red Cross, an anthrax update and whatever happened to stimulating the economy.

FOCUS - BLOOD & MONEY

JIM LEHRER: Ray Suarez reports the Red Cross story.

RAY SUAREZ: It's been a challenging three months for one of America's best known charities, the 120-year-old American Red Cross. In the wake of the terror attacks of September 11, Americans responded quickly and with astounding generosity. Charities have raised an unprecedented $1.4 billion for victims of September 11. Nearly half of the money has been raised by the Red Cross, which also collected hundreds of thousands of blood donations. This story, of blood and money, has brought controversy and scrutiny to the well-regarded $3 billion a year charity. Founded in 1881 by the Civil War nurse Clara Barton, the American Red Cross provides disaster relief to the victims of more than 67,000 disasters annually, and has been the largest seller of blood in the nation for the last 50 years. Immediately after the attacks, the Red Cross ramped up for round-the-clock relief efforts.

SPOKESPERSON: We honor our heroic relief workers, victims, and their families. Please call 1-800-give-life to donate blood, or 1-800-help-now to offer financial support.

RAY SUAREZ: As the contributions poured in, Red Cross President Bernadine Healy took the unusual step of not putting the money in the agency's general funds, rather in a separate place, the Liberty Fund, which most people assumed would be used solely for September 11 victim relief. On the blood side, it was a case of donations pouring in but little demand. More than 3,000 died in the attacks but a relatively small number were injured. Jim MacPherson is the executive director of America's Blood Centers, which collect about half the nation's blood supply.

JIM MacPHERSON: By September 12, we knew that the victims of the attack were, frankly, mostly dead and we're not going to need very much blood. I believe a total of about 600 or 800 units were used for the injured parties. During that first 24 to 48 hours, we doubled and then tripled the blood supply in the country.

RAY SUAREZ: Blood has a 42-day shelf life. For those who manage the nation's fragile blood supply, having too much blood can be just as much of a problem as having too little.

JIM MacPHERSON: Even on September 12, the day after the attacks, we called the Red Cross and we said, "would you join with us with a message to people that the blood supply is adequate and let's stop the collections right now so we can minimize the wastage."

RAY SUAREZ: But the Red Cross saw the charitable outpouring as an opportunity to restock its depleted national inventory at a time of great uncertainty. Jerry Squires is chief scientific officer at the Red Cross.

DR. JERRY SQUIRES: When you consider that we were trying desperately to increase our inventory to a safer level, that we were hearing that September 11 might not be the end, and we had to be worried about the entire United States, we really felt that sort of calling a halt to blood donations was probably not the wisest or the safest thing to do.

RAY SUAREZ: So the Red Cross continued soliciting and receiving blood.

SPOKESPERSON: The American Red Cross: Providing life-saving assistance.

SPOKESPERSON: To donate money, to donate blood, or volunteer.

SPOKESPERSON: But we still need your help, so please call 1-800-help-now to make a...

RAY SUAREZ: Meanwhile, as the blood piled up in storage, so did the millions in the Liberty Fund.

PRESIDENT GEORGE W. BUSH: Americans love for America was channeled through our nations great charities, and as President of this great land, nothing made more proud.

RAY SUAREZ: As Bernadine Healy was accepting praise from President Bush for the Red Cross's efforts, her organization was discovering just how difficult it was to distribute half a billion dollars. By the end of October, the initial praise had turned to criticism of Healy's management of the Liberty Fund, and contributed to her surprise resignation, effective December 31. Red Cross officials then closed the Liberty Fund, which had received pledges of $543 million and spent $147 million on September 11 relief efforts-- less than one third. They announced they had raised more than enough money for the needs of the victims of September 11 and planned to spend over half the money to build up blood supplies, improve their telecommunications, and prepare for possible future terrorist attacks. At a contentious Congressional hearing, Healy defended the use of the money.

DR. BERNADINE HEALY: The American Red Cross, to my knowledge, has never described its work as limited only to those people who were lost on 9/11 and their families in New York and Pennsylvania and the Pentagon. We worked with them vigorously. Everything that we thought we could do, everything that was within our mission we did.

RAY SUAREZ: Victims of September 11 and members of Congress responded heatedly to Healy, and New York Attorney General Eliot Spitzer threatened legal action.

ELIOT SPITZER, New York Attorney General: And we have two victims here at this table who haven't received the money they need. This is anathema to what the American public expects. When people were writing their checks for $100, $200, or $10,000 and sending them in in response to the PSA's that the Red Cross was running, they believed victims were going to get that money.

REP. BILLY TAUZIN: What's at issue here is that a special fund was established for these families.

SPOKESPERSON: No, it was established...

REP. BILLY TAUZIN: It was specially funded for this event, for September 11, and we're also being told parenthetically, "by the way, we're going to give two thirds of it away to other important Red Cross needs."

RAY SUAREZ: The Brookings Institution's Paul Light, who studies American charities, said the Red Cross had to face some difficult choices.

PAUL LIGHT, Brookings Institution: They were in the damned if you do, damned if you don't situation. I mean, the Red Cross did not have the administrative infrastructure to handle this money. They have been unable to raise the dollars over the years to update their administrative infrastructure. But Americans don't want to pay for the heat and light. They don't want to pay for telecommunications or the freezers to store the blood. They want the blood to go directly to the victims. They want their dollars to make it to the victims. They want somebody else to pay for the heat and light and the electricity and the infrastructure.

RAY SUAREZ: In early November, the Red Cross reversed itself and announced all Liberty Funds would go to September 11 victims and families. Red Cross interim President Harold Decker:

HAROLD DECKER, Interim President, American Red Cross: I want to say now that America has spoken loudly and clearly, and that America wants our Liberty relief efforts directed solely at the affected... People affected by the September 11 tragedies. We deeply regret that our activities over the past eight weeks have not been as sharply focused as America wants.

RAY SUAREZ: Meanwhile, blood donated after September 11 was reaching the end of its 42-day shelf life. According to news reports, directors at several Red Cross blood centers were discarding as many as one out of every five donations. Jim MacPherson said that has been his concern since September 11.

JIM MacPHERSON: We knew from day one that when there was this outpouring, how do we manage this precious resource? How do we make sure that it doesn't get wasted?

RAY SUAREZ: The Red Cross's top blood official, Jerry Squires, said the waste was minimal.

DR. JERRY SQUIRES: Very little blood was actually... Actually discarded.

RAY SUAREZ: When there's a spike in supply that's not met by a spike in demand, how do you not throw out a lot of blood, or at least an amount that exceeds the normal throw out level?

DR. JERRY SQUIRES: Sure. Think of it this way. It's sort of like filling a sink. You've got the drain open and you have the faucet open, and what happened was that normally what we have is the sink is filled this much, two to three days worth. What we have is not blood that we've thrown out, but a higher level in the sink. And now we can manage that inflow and outflow, but there's more residual in that sink.

RAY SUAREZ: Many regular donors have continued to trust the Red Cross, showing up every two months to give blood.

DONOR: You know they're not going to open the window and dump it out. Those people don't administer it unless somebody needs it, and if somebody needs it, I want to be there.

RAY SUAREZ: Shoring up the faith of people who gave blood or money has been the number one challenge for the Red Cross after Bernadine Healy's exit, according to Michael Farley, the Vice-President for Development.

MICHAEL FARLEY, Vice-President for Development, Red Cross: The premium for us is to maintain the trust and the stewardship... The deliverance of the stewardship of dollars that we have received. This is all about trust, and if it weren't for the trust, then the American Red Cross would not be able to be there every day for disasters that occur around the country.

RAY SUAREZ: But Paul Light at Brookings said that fundamental trust between the Red Cross and the public has been strained.

PAUL LIGHT: This particular incident is going to affect and probably depress giving for some time to come. The next time there's a crisis, a national disaster in which the Red Cross asks for donations, or another nonprofit, for that matter, asks for donations, Americans are going to think a little bit about this crisis, and it's going to take some time for this to heal.

RAY SUAREZ: The Red Cross will announce their plans for spending the remaining $275 million in the Liberty Fund in January.

UPDATE - FIGHTING ANTHRAX

JIM LEHRER: Now, an anthrax update. The government today began making available the anthrax vaccine to those exposed to the inhaled form of the disease. Here now is Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, a part of the National Institutes of Health. He's the federal government's leading infectious disease expert. Dr. Fauci, welcome.

DR. ANTHONY FAUCI: Thank you.

JIM LEHRER: First, who is eligible now to get the vaccine?

DR. ANTHONY FAUCI: Any of the individuals who were exposed to anthrax during the anthrax incident when we had the bio-terrorism exposures who had been on antibiotics for protection for what we call prophylaxis against their developing anthrax, have coming now or have already arrived at the end of their antibiotic period of time. So they're being offered the vaccine together with a continuation for a period of time of the antibiotics, in order to, if they make their choice, because this is not something that we have a lot of information about, so that's why we use the word making it available for individuals in their free and open consent that that's what they would want to do, if they feel they want to go the extra mile to make sure they do not come down with anthrax.

JIM LEHRER: How many people are we talking about?

DR. ANTHONY FAUCI: The universe of potential people is about 9,000. If you talk about the people who were exposed clearly to a situation where they very well may have inhaled anthrax as opposed to somebody just maybe walking by the place, indirectly involved, that number is about 3,000 individuals. And within that group there clearly going to be people who are going to elect to feel that that's just not what they want to do, so it's about 3,000 at the highest I would imagine.

JIM LEHRER: Is there going to be government policy to get as many as these people vaccinated as possible or to hold down the number, or does it matter to you?

DR. ANTHONY FAUCI: Well, actually, that's a very good question, Jim. There's not going to be a policy one way or the other, and I think that's important to emphasize so that people really understand what's going on right now. Since the scientific data, particularly in animal models, do not indicate one way or the other whether or not that this is going to be helpful, in fact the data in monkeys indicate that there really was no difference between monkeys who received the antibiotics plus the vaccine versus the antibiotics alone, there is a theoretical possibility that there may be helpful in the context of the fact that we know from an animal model that even weeks and weeks after exposure of an animal there are some residual stores -- spores, excuse me, in the respiratory tree. And for that reason, given that hypothetical context, the vaccine is made available. So it isn't like saying we're recommending you do this and if you don't do it you're putting yourself at danger. It's a question of an open choice.

JIM LEHRER: But to use your numbers, if all 9,000 of these people want the vaccine, they can have it, right?

DR. ANTHONY FAUCI: Yes, that's true. It's extraordinarily unlikely that that's going to be the case.

JIM LEHRER: But if none of them want it that's okay too?

DR. ANTHONY FAUCI: That's okay too, that's exactly the point, Jim, that's exactly the point; that's okay too.

JIM LEHRER: That's a point but it's kind of a strange point, isn't it, Doctor, I mean to offer these things and not care if anybody gets it?

DR. ANTHONY FAUCI: I don't want to use the word uncare, because that seems insensitive to the feelings of people. What we do care about - and this is important -- that people are given the free and open choice to make a decision based on what they feel is the level of risk that they are willing to take -- one risk of the vaccine itself, as well as the perceived hypothetical and theoretical consideration that maybe the vaccine might help you out, and since there are toxicities associated with the vaccine, and importantly the vaccine has never been used in a context like this, that's the reason why you need informed consent and you need a decision on the part of the individual themselves.

JIM LEHRER: Now, what constitutes informed consent? What is it that these people should know about this vaccine in terms of its risks et cetera before they agree to do it?

DR. ANTHONY FAUCI: In essence it's a little more detailed than what I just told you over the past minute or so. What are the data that indicate or not that this would be helpful, what is the vaccine being used for, pointing out that it has never been used in this situation before, what are the toxicities of the vaccines, what are the pros and cons, you read it, you ask questions, I'm sure they're going to have questions. You try as best you can to answer the questions. And then you take it or not.

JIM LEHRER: So what's the number one potential risk of taking this vaccine?

DR. ANTHONY FAUCI: The number one potential risk is the risk associated with taking any vaccine -- namely toxic side effects.

JIM LEHRER: Like what?

DR. ANTHONY FAUCI: Systemic reactions, there's fevers and malaise and muscle aches. There's rather frequent local involvement of swelling and redness.

JIM LEHRER: It's given just like any vaccine, right, with a needle in the arm?

DR. ANTHONY FAUCI: Yes, correct. So that's the risk. Now as you know, there have been perceptions, the history of this vaccine, of people feeling that they got the vaccine and that there were side effects associated with that, when people examined them over a large number of people, there's some, quote, controversy about that, but there's the general feeling that it's a reasonably safe vaccine. But there are toxicities. And whenever you give anyone a drug or a vaccine, there is a finite risk there, which is the reason why since you're not sure that there is going to be any benefit from it, that's a very important ethical consideration that if there's a risk to what you're going to do, and there's not a definite potential benefit of it that has been proven as a benefit, you've got to be very careful that you don't strongly urge something as opposed to making it available with the informed consent of the individual.

JIM LEHRER: If it's not, there's no certainty that this is going to help, how did we get to this situation where it is being offered to people?

DR. ANTHONY FAUCI: The situation is that a feeling and an attempt on the part of Secretary Thompson, the Department, and even the Administration in general, about making sure of going the extra mile that every possible conceivable benefit, even though it has not been proven, is at least going to be made available to individuals, at least be made available to them. So that we can't say you know we could have done something, but we didn't make it available to them.

JIM LEHRER: Is a system in place to track the reaction of people who do take this vaccine?

DR. ANTHONY FAUCI: Yes. Absolutely. Because you're doing it again in an investigational new drug program, which means unlike going to the store and buying a medicine and taking it, and you don't get any follow, when you do it under a program that's under the umbrella of an investigational new drug, not only do you have informed consent, but you've got to come back and report, do you have any toxicities, you have to come back for the second and third installment of the vaccine. So it is a rather continuous following of the individuals.

JIM LEHRER: What's your level of confidence about the cleanliness, the quality of the vaccine that is available?

DR. ANTHONY FAUCI: Well, the FDA has been following this, obviously. I'm not the FDA, but I can tell you exactly what they say. The vaccine lot that will be given to these individuals, although it hasn't been approved yet for licensure, the FDA says it is of the quality that has the potential to be approved once the final inspection of the plant that made it. So it is almost certain that it's going to get approved, it's in the category that the FDA feels comfortable with it.

JIM LEHRER: Speaking of comfortable, unfair question. If you went confronted with this, with all that you know, would you take this if you had been exposed?

DR. ANTHONY FAUCI: You know why I'm not going to answer that, Jim, because it will be a, it will be a sound bite. But I can tell you, and I think this maybe will inform others who are thinking about it, it depends on what level of risk you're interested in taking, because there are some individuals, and I've spoken to a lot of people over the past several weeks and even throughout my medical career, who feel that even if there's a slight chance of helping, they want to about the extra mile and they're not worried about the toxicities of a vaccine. There are other people when you say the vaccine might have some toxicity, they say I don't want any part of that, I'll take my chances and if I feel like I'm going to get sick, I'll go straight to my doctor and have them give me antibiotics, which I know are going to be helpful for me. And there are a lot of people on either side of that fence.

JIM LEHRER: I know you're not an investigator, but how close are they to finding out where all this anthrax came from?

DR. ANTHONY FAUCI: Well, from what we read in the newspapers, and I read the same papers that you do, it looks like understanding the quality and the kind of spores that have been involved, that it looks like that if they're not getting very close they're certainly moving in towards getting a feel for where it might have come from. So I'm confident that sooner or later we're going to find out what's going on.

JIM LEHRER: As an expert, do you under why it's taken so long?

DR. ANTHONY FAUCI: Why it's taken so long?

JIM LEHRER: To find out where it came from.

DR. ANTHONY FAUCI: Well, I'm not a law enforcement expert.

JIM LEHRER: But I mean on infectious diseases and all this sort of thing.

DR. ANTHONY FAUCI: I'm not -

JIM LEHRER: I mean, you have sympathy for why it's so difficult to trace -

DR. ANTHONY FAUCI: Oh, of course. I am not at all critical of our law enforcement and our intelligence individuals. I think that they are doing a terrific job. To say okay, where is the person who did it, you have an undetectable type of an agent, this weapon that they're using, and an unknown assailant, that's a tough thing for them to be challenged with. So I'm very empathetic with our law enforcement officials.

JIM LEHRER: Doctor, thank you very much.

DR. ANTHONY FAUCI: You're quite welcome.

UPDATE - STIMULATING POLITICS

JIM LEHRER: Finally tonight, where now is the economic stimulus package. Kwame Holman reports.

KWAME HOLMAN: President Bush went to the Capitol himself this morning to try to jumpstart negotiations on economic stimulus legislation. House Republicans had been working on a revamped package to replace the stimulus bill they passed more than a month ago. At 9:00, the President introduced the new proposal and embraced it.

PRESIDENT GEORGE W. BUSH: I am proud to report that members of both political parties and both bodies of Congress have come to an agreement as to how to stimulate our economy and how to take care of people in need, people who have lost their job. I'm proud of the members around this table for making the conscious decision to work together to answer some serious needs that face our country.

KWAME HOLMAN: With three Senate democratic moderates at his side, the President suggested the plan could be the breakthrough in partisan maneuvering over stimulus that's lasted for eight weeks.

PRESIDENT GEORGE W. BUSH: This bill can pass both...both bodies. This bill will pass the House. It's got enough votes to pass the Senate, and therefore I look forward to working with both bodies in any way I can to convince those who are reluctant to get a bill done that this makes sense for America. So we can leave for Christmas knowing full well that we've done the people's business.

KWAME HOLMAN: However, moments later in another Capitol room, Senate Majority Leader Tom Daschle again warned passing a stimulus plan will require a super majority in the nearly 50- 50 Senate.

SEN. TOM DASCHLE: Any deal is going to require 60 votes, and I don't know of a deal yet that has 60 votes. Regrettably, that is why a few weeks ago, if you'll recall, I said that any kind of a deal would have to have about two- thirds of support in either caucus in order to overcome the parliamentary or procedural hurdles that exist on the Senate floor, and that's just as true today as it was back then. I don't know what the bill entails, so I can't comment on the specifics until I've seen it. If we can't help workers, if we can't help their families, if we are going to be providing more and more help to the largest corporations at the expense of those families, that's a bad deal.

KWAME HOLMAN: And outside the Capitol, even Republican leaders themselves seemed less than certain their new proposal would be the final word on economic stimulus.

REP. J.C. WATTS: I don't know what more we can do. We -- in the House we passed an economic security bill back in the middle of October. The Senate leadership has yet to respond to that. You'll probably see us pass another economic security package this afternoon and I have no optimism that... I'm totally discouraged that Mr. Daschle's going to move that one.

KWAME HOLMAN: The Republican- controlled House passed its original stimulus bill in late October, with only three Democratic votes. Among other provisions, the $110 billion plan called for tax rebates for low-income workers who didn't qualify for them last spring; extended unemployment benefits; subsidies for health insurance premiums for the unemployed. But the bulk of the bill went to business tax breaks, including repealing the corporate alternative minimum tax, which limits corporate tax deductions. Last month, Senate Democrats tried to move their own version of economic stimulus that favored more help for the unemployed and far fewer business tax breaks. Senate Republicans blocked it from being considered.

SEN. MAX BAUCUS: At this point, while we're on the bill, I might say, Mr. President, that neither side has enough votes to pass the bill. The Senator from Texas correctly said that you might as well get negotiations and get to the heart of the matter, because the current bill probably does not have the sufficient 60 votes to get it passed here on the Senate floor.

KWAME HOLMAN: Meanwhile on the House floor today, hours passed and the Republicans' revamped economic stimulus never appeared.

SPOKESPERSON: HR-2199 ...An act to amend the national capital revitalization.

KWAME HOLMAN: Reportedly, Republican leaders were trying to round up Democratic votes for their new plan before bringing it to a vote, perhaps later tonight. The main problem seems to be Democrats want to enhance a program that helps laid-off workers keep their health insurance; Republicans want to them a tax credit instead. Late this afternoon Senator Daschle appeared again, this time to announce another piece of legislation, the farm bill, will be put off until next year because of partisan differences. He came close to predicting the same fate for an economic stimulus package.

SEN. TOM DASCHLE: I think what they would like is for you to write that they passed something and the Senate hasn't, and that they will attempt to portray that as an effort to defeat economic stimulus.

KWAME HOLMAN: Congress is scheduled to adjourn at the end of the week and return in late January.

RECAP

JIM LEHRER: Again, the other major developments of the day. There was a rebellion by al-Qaida prisoners in Pakistan. Seven prisoners and six police were killed in the fight. And federal health officials began offering an anthrax vaccine to about 70 workers at the Capitol. We'll see you online, and again here tomorrow evening. I'm Jim Lehrer. Thank you and good night.