The NewsHour with Jim Lehrer

GWEN IFILL: Good evening. I'm Gwen Ifill. Jim Lehrer is on vacation. On the NewsHour tonight, the airlines coming back from September 11, a report on tighter scrutiny along the US- Mexican border, a look at philanthropy during difficult times; transcribing the Bible by hand; a conversation with Catholic bishop Wilton Gregory, and we close with a Christmas poem. It all follows our summary of the news this Christmas Day.

NEWS SUMMARY

GWEN IFILL: US Marines in Afghanistan moved to a state of alert this Christmas day. They said there was a possible threat to their base at Kandahar, but they gave no details. Amid the security concerns, chaplains held religious services, and the troops even had a visit from Santa Claus delivering gifts. They said it helped bring a little Christmas spirit a place far from home.

SERGEANT JOSEPH CHENELLY: It's always very hard to be away from my family but at a time

when we usually all come together, I usually see everybody in my family on this day that makes it that much more difficult because I know what I'm missing. But I know it's for a very good cause. I'm proud to be here and happy to have the opportunity.

LANCE CORPORAL NATHAN EASON: I feel a little bit lonely. I miss my mom, my sister and my father quite a bit. But all in all I like being here.

GWEN IFILL: There were also Christmas observances at the Bagram Airport north of Kabul. US soldiers and British Marines exchanged cards, sang carols, and put up a makeshift Christmas tree, and the US Army flew in turkeys with all the trimmings. It was the soldiers' first break from Army rations since mid- November. In Mazar-e-Sharif, US soldiers played a game of football, as curious Afghans watched. For refugees in a nearby camp, it was another bleak day. But a US officer said his force is working to improve their lives.

US OFFICER: We are setting the conditions to bring in additional food supplies, additional stores of medicine and assisting in ensuring the area is secure and allowing the local people here who have truly been the victims of the Taliban and five long years of war to return to a sense of stability that I don't think they've enjoyed in some time.

GWEN IFILL: In eastern Afghanistan, tribal forces continued the search for Osama bin Laden and his remaining followers around Tora Bora. They've been digging into caves that collapsed during US bombing, and seizing ammunition that was left behind. The commander of the US Campaign, General Tommy Franks, said today US forces would go through the caves until, in his words, "we satisfy ourselves that he is there, and dead." The General spoke during a visit to two US Aircraft carriers in the Arabian Gulf. President Bush today thanked the troops overseas for their sacrifice in the war on terrorism. In his Christmas radio message, he said the nation prays for peace, even in time of war. And he said Americans today e grieving with the victims of September 11.

PRESIDENT GEORGE W. BUSH: Charles Dickens wrote that Christmas is a time when abundance rejoices and want is keenly felt. This Christmas finds many facing hurt and loss, especially the families of terror victims and of our young men killed in battle. America grieves with you. And we hope you'll especially find the comfort and hope Christmas.

GWEN IFILL: At the Vatican today, Pope John Paul devoted much of his Christmas message to the suffering of the world's children. He told thousands gathered in Peter's Square that too many children are victims of war and strife, and he said religion should never be used as an excuse for violence. He made no direct mention of the September 11 attacks. India and Pakistan traded heavy gunfire again today, along the border in disputed Kashmir. At least one Indian soldier was killed. In a public address, Indian Prime Minister Vajpayee said, "we do not want war, but war is being thrust on us, and we will have to face it." His government blames militants based in Pakistan for attacking the Indian parliament earlier this month. Today, Pakistan's president said his country is prepared to defend itself. Israeli forces raided a Palestinian town in the West Bank today, arresting seven accused militants. Elsewhere, gunmen inside Jordan fired on an Israeli patrol across the border. One soldier and two of the gunmen were killed. No one claimed responsibility for the attack.

FOCUS - STRUGGLE TO RECOVER

GWEN IFILL: The airline industry-- hit hard by the September 11 hijackings-- is facing new passenger anxiety with the arrest Saturday of a man carrying explosives on a Paris to Miami flight. Before that incident, Margaret Warner recorded this discussion about the condition of the nation's airlines.

MARGARET WARNER: By tradition is holiday on is one of the busiest el times of the year. But what does that mean in this post 9/11 world? Are travelers returning to the skies? What are they finding, and what does this mean for the airline and travel industry? To explore all of that, we turn to Rudy Maxa, a travel writer and regular commentator on public radio. Julius Maldutis, an aviation analyst and consultant for several investment banks. And Paul Steven Dempsey a law professor and director of the transportation law program at the University of Denver. Welcome to you all.

Paul Dempsey, are travelers returning to the skies?

PAUL STEPHEN DEMPSEY: Well, they are. Traffic is down year over year, 16% during this New Year's and Christmas holiday season. It was down 20% during the last Thanksgiving season year over year. So people are beginning to come back. People are becoming more comfortable with the idea of flying.

MARGARET WARNER: The low fares, Rudy Maxa, also have to be an incentive here.

RUDY MAXA: No question. I think a lot of people ought everything was on sale and they're disappointed when they call and maybe want to go to a smaller town somewhere in the United States and find out the fares are still very high. But between major routes, the fares have been very, very low, both nationally and internationally.

MARGARET WARNER: So Paul Dempsey, talk a little bit more about what travelers are finding on the security side; you're saying they feel safer. Do they have reason to feel safer?

PAUL STEPHEN DEMPSEY: Well, they do. The tragic events of September the 11th are highly unlikely to be replicated for several reasons: One is, the cockpit doors on virtually all commercial aircraft have now been reinforced, and the pilots have been instructed not to leave the cockpit, unless they absolutely must. They're instructed now to take the plane down and land it at the closest airport. There are armed federal marshals aboard the long haul flights, most of them, and there is a greater level of vigilance now. There is all the screening positions. The screeners are now told they have an opportunity within year to be transformed into federal law enforcement personnel. And I think they're... They understand that their job now is very important.

MARGARET WARNER: Rudy Maxa, what you would add to the security picture?

RUDY MAXA: Well, I wish it were all that rosy. I agree with my colleague, that, indeed, it is safer to travel now, and no one is a bigger booster of travel than I am right now. But, by the same token, we didn't learn the lessons of Lockerbie, and there is precious little baggage screening going on. It's not going to come into effect, as Congress has asked for, simply because it's impossible to build that many screening machines.

MARGARET WARNER: And you're talking now about the new procedure that's supposed to go in January, which didn't apply to this holiday period any way?

RUDY MAXA: And most major airlines in the United States are still not... Except on international flights, matching passengers with their luggage. So, I mean, I wish I could say it was really safe to fly, and I wish everyone would fly, and I have been flying without worry. Having said that, though, we still have a ways to go. And I hope we don't, as we did with Lockerbie, forget the lessons and not tend to business.

MARGARET WARNER: You have been flying a lot, you say. What do you find in terms of the evenness of the security procedures are they pretty standard across airports, or does it really depend where you are?

RUDY MAXA: It really depends where you are. It's all over the map. I have flown both internationally and nationally since September 11, twice overseas. And, you know, I had an old corkscrew in the bottom of my carry-on bag that I forgot was even there. It was discovered in London's Heathrow. And I flew the first international flight, one of the first flights that left Dulles after 9-11, and it was missed at Dulles, even though everything was hand searched. In the United States, you remove your computers from your bags to be x-rayed. You don't overseas.

MARGARET WARNER: And, Paul Dempsey, what about the hassle factor? In other words, there were a lot of complaints from passengers that, in the weeks after 9-11, it almost wasn't worth flying, unless you absolutely had to, because you didn't want to wait in line for three or four hours?

PAUL STEPHEN DEMPSEY: Well, there have been some horrible experiences. At many airports... several airports, the delays have been three and four hours, and they've been telling people to check in that early before their flights. They now train more people. They're providing better supervision and the times now are significantly reduced at most major airports. Normally today, you're asked to get to the airport not more than two hours ahead, so that's an improvement.

MARGARET WARNER: You mean they don't actually want you to come longer than two hours ahead?

PAUL STEPHEN DEMPSEY: Well, some airports they don't, because it simply creates a lot of people to try and deal with who are sort of milling around concourse waiting for their flights, and it's... It creates a lot of congestion.

MARGARET WARNER: Mr. Maldutis, I want to bring you in here now. Despite this better picture, the airlines are still losing money.

JULIUS MALDUTIS: Absolutely. For the first nine months of this year, the nine major carriers reported a loss of $5 billion. For the fourth quarter, we're looking at another loss that perhaps, will exceed $4 billion. The US Airline industry is in a very serious unprecedented financial crisis, something that's even worse than what occurred in 1991. While I share some of the optimism that passengers are coming back, the problem lies is that business travel, which is the critical piece for the financial success of carriers, is still weak and is not coming back as expected. We've seen unprecedented low fares. Discretionary travel is coming back, but the key element is going to be the return of the business traveler.

MARGARET WARNER: Before we go on to the business traveler, though, let me ask you a little bit more about the low fares, about the fuller... slighter, fuller planes. Are you saying that right now, if a plane leaves, and I don't know, flies from Washington to LA at 80% capacity, which I gather is the average right now, it's still... Will the airline be losing money on that flight?

JULIUS MALDUTIS: Absolutely. They're going to lose money because the fares are so low, and the only passengers they're attracting are the discretionary vacation travelers. So while volume is coming back, just in the month of November the average fares were down; 23% revenues for the month of November are down 40%. So we are going to see some very ugly financial numbers when the carriers start reporting their results at the end of January, early February.

MARGARET WARNER: Rudy Maxa, are people who know... Who aren't flying, are they just not traveling, or are they going more by train or bus or car? What are the numbers there?

RUDY MAXA: Some are not traveling. There really wasn't a huge increase overall in Amtrak's numbers after September 11, which surprised a lot of... surprised me. I can't tell you about bus travel, but there are a smaller percentage more driving. So some people are staying at home. Some people are taking other modes of transportation. Hopefully, hopefully, slowly this holiday season we're going to do better numerically with airplanes than we did during Thanksgiving.

MARGARET WARNER: All right, Mr. Maldutis, back to you. Now, what about the government bailout back... After ember 11, there was the $15 billion Congress passed. Only $5 billion in cash, I guess, and the rest in loan guarantees. But what has that done for the airlines?

JULIUS MALDUTIS: The $5 billion was very critical to keep the carriers operating after September 11. I think it was a very good move on the part of the government. The concern on my part is that the $10 billion loan guarantee program is not going to be available to everyone. We've only had two small carriers applying for it. It has some very stringent conditions. Remember, the steel industry got a loan guarantee program, and out of 25 steel companies, I believe, only one was able to obtain and meet the government conditions. So the $10 billion loan program is a what if situation. The real critical piece is that business travel should return, and that will depend on the course of the US economy.

MARGARET WARNER: Professor Dempsey, back to you. So, can the airlines weather this?

PAUL STEPHEN DEMPSEY: Some airlines can; some airlines cannot. We had one major CEO of a major airline recently say that his company would perish unless the cost structure was significantly adjusted downward. There are going to be some chapter 11 filings probably after the new year, and there are going to be some carriers that likely will be liquidated. I'm not going to name names, but there are some carriers that are in serious trouble.

MARGARET WARNER: And, Mr. Maldutis, what would it take... You said the real key here is the business traveler. We'd, of course, like to see that particularly after the first of the year. When is that coming back?

JULIUS MALDUTIS: Well, obviously, if the economy starts recovering, as many economists expect early next year, I would expect that business travel will start coming back. The real critical issue, will we get back to the previous volumes? And I think there are some very serious questions whether this industry will come back in the form that it was prior to September 11. So it's going to be a very touchy situation.

MARGARET WARNER: But what tells you that? I gather there is an up-tick in buying timeshares on planes. Business travelers are doing that now, companies are.

JULIUS MALDUTIS: And not only time shares, but the sale of executive jets basically taking away a lot of business travel that normally would travel on the airlines. In fact, United Airlines has started up a subsidiary that caters just to the corporate jet market. So the question is, will you see business travelers that normally would fly on United Airlines opt out to fly on a business jet for its subsidiary? Again, the real critical piece, is business travel going to come back, and at this point in time it's really going to take a strong economic recovery?

MARGARET WARNER: Rudy Maxa.

RUDY MAXA: But the onus is not just on the business traveler coming back. The onus is also on the airlines to make sense of business fares. Prior to 9-11, business fares were astronomical compared to leisure fares, and it wasn't right. And business people were sick of it, and they were voting with their feet long before September 11. And until the airlines find out a way and the short-term of cutting by 85% some business fares through early January is not going to do it... Until they find a way to price this so business travelers don't feel they're getting ripped off, you know, it's a two-way street here. It's not just the onus to get the business traveler back on, it's also for the airlines to begin, figure out a new, more creative way of pricing so the business traveler doesn't feel he or she is being gouged.

MARGARET WARNER: Would you agree, though, with Mr. Maldutis in general, that the real comeback for the airline industry is going to be when the economy gets back out of recession?

RUDAY MAXA: If, again, if they convince business travelers it's worth it getting on the planes. So instead of sending one person to a meeting, if they really need to send three, they might send three, or they might not teleconference, or they might not phone it in. So it's going to require a change, I think, on the part of the airlines in pricing.

PAUL STEPHEN DEMPSEY: Well, there are two other factors that are essential recovery: One is a capacity in relationship with demand. Right now we have an excess amount of capacity relative to demand, and some of that has been grounded, and still we don't have the load factors we should have, even with these fares. And second, is the cost structure of the major airlines. The major airlines have signed labor agreements in recent years that are unsustainable in terms of the viability of the companies, given their ability to price at a level to cover those costs.

MARGARET WARNER: But Professor Dempsey, it sounds like you're all saying is, ultimately both the problems the solutions have less to do with September 11 than they do with the overall economic health and the health of the... Or rather the economics of the airline industry, period.

PAUL STEPHEN DEMPSEY: Well, my friend Julius is absolutely right. It was shaping up to be a miserable financial year for the industry, even before September 11. The catastrophe of September the 11th, it scared away an enormous amount of passengers who were terrified by watching planes crash into the World Trade Center again and again and again on the evening news.

MARGARET WARNER: Thank you, all three, very much.

FOCUS - BORDER SECURITY

GWEN IFILL: Next, tougher restrictions along the US- Mexico border. Ted Robbins of KUAT-Tucson has our report.

TED ROBBINS: Hector Rosas is hauling a truckload of shrimp from the seaport in Mexico through the US Port of entry at Nogales, Arizona. He has to move quickly so the shrimp is fresh when it reaches stores and restaurants across the US but first it needs to get into the US/

HECTOR ROSAS (Translated): It's essential for them in customs to keep things moving so the product stays fresh and reaches its destination and it would help us to keep things moving.

TED ROBBINS: Since September 11, US Custom inspectors have been operating at level one security. Defined as sustained, intensive anti-terrorism operations. That means they're examining more vehicles for contraband, illegal drugs, explosives, toxins, firearms. They're also screening more individuals to identify suspected criminals and terrorists trying to slip into the US. Thorough inspections mean longer waiting times at the border, three to four hours in the weeks following September 11. Delays like that can affect business, especially this time of year. The Department of Agriculture, for instance, estimates that from November through April, half of the nation's vegetables come through this port at Nogales. Assistant port director Anthony Van Ravenswaay says customs officials can keep the flow of traffic moving when they recognize who is trying to cross.

ANTYONY VAN RAVENSWAAY, US Customs Service: We know the local community. We know our local crossers. We have excellent relationships with the trade, and it helps us with our screening process. If someone who has not been through here before, cargo that we've not seen before, if someone like that shows up, they're going to spend a little more time with us.

TED ROBBINS: Another way to speed things while maintaining high security, get more people. A new contingent from the Arizona National Guard recently arrived on the US-Mexico border. Nogales, Arizona Mayor Marco Lopez Jr. asked Arizona Governor Jane Hull for National Guard troops. He says he was worried about the economic impact delays might have on national produce distributors based in his city.

MAYOR MARCO LOPEZ, JR.: We've got 1500 trucks a day with fresh fruits and vegetables and for Nogales, it represents a $6 billion a year industry of fresh fruit and vegetables. Our worry and our fear was that this product was going to rot having to wait long periods of time to cross the border.

TED ROBBINS: The custom service says it's it takes about three years to fully train an inspector so the guard is only assisting with inspections. After this initial inspection, a check of the computer database and an examination of the paperwork, roughly 60% of the trucks are on their way down the road. The other 40% are in for a longer wait. Hector Rosas, for example, forgot to purchase an entry permit for his truck. "The inspector asked me if I had a number one permit," he says, a sticker. "I usually pay for that annually but I don't have it and that's why they're sending me here to check it out." Trucks suspected of carrying contraband goods or undocumented people are literally pulled through a huge x-ray machine. The x-ray images are so detailed customs officials asked us not to show pictures of the screen for security reasons. Inspectors recently found large, illegal drug shipments using this equipment, methamphetamines, marijuana and cocaine, no links to terrorists have been found here since September 11. This recent technology is much faster than the old way, which meant unloading the truck.

SPOKESMAN: Historically if we target a truck, a commercial truck for an examination, and we have to unload it manually, that can take eight hours for one truck. Now we can run it through these high-tech systems these x-ray systems, and get it done in minutes.

TED ROBBINS: And some loads must still be inspected manually not for terrorists or contraband but for insects and plant disease. This is a federal agriculture inspector looking at a shipment of corn. The Department of Agriculture does not check for food safety, poison or contamination. That's the Food and Drug Administration's responsibility. The FDA says it randomly inspects only about 1% of the nation's food supply. Moving traffic through the border while maintaining high security is time consuming, but the combination of more customs personnel and technology, along with the National Guard troops, seems to be working. The wait has now been shortened from three or four hours to what's considered normal for this time of year, less than one hour.

GWEN IFILL: Still to come on the NewsHour tonight: Seeking contributions, a new bible, a conversation with the president of the Catholic Conference of Bishops, and Christmas poem.

FOCUS - A TIME FOR GIVING

GWEN IFILL: The outpouring of charity since the September attacks has been overwhelming, but it has also made the job of philanthropic organizations harder. Terence Smith has that story.

TERENCE SMITH: In the aftermath of September 11, individuals, corporations and foundations across the country raised over $1.5 billion for the victims' families. That's generous, but it amounted to only a small percentage of annual giving in this nation, which exceeded $200 billion last year. The future, however, is uncertain. According to the Philanthropic Giving Index, which assesses the climate for charitable giving, nationally, confidence among fundraisers has declined by over 8% since the summer, the largest drop since the index was established. To assess the state of philanthropy and giving in the post-9/11 world, we're joined by Barttam Gregorian, president of the Carnegie Corporation, a grant-making institution founded by Andrew Carnegie in 1911, prior to his current position, he was president of Brown University; and by Mario Morino, chairman of the Marino Institute and venture philanthropy partners, which makes social investments to non-profit organizations serving children in the Washington area; and Stacy Palmer, editor of the "Chronicle of Philanthropy," an independent newspaper that covers the sector. Welcome to all of you. Mr. Gregorian, this is the season for giving, but there's an important distinction between philanthropy and charitable giving. Can you explain it to us?

VARTAN GREGORIAN: Yes, all giving is charitable, but there are two kinds of giving. One is out of pity-- out of sympathy, occasional-- and the other is long-term, strategic investment. And I believe that, therefore, giving covers it all, but we should know the differences.

TERENCE SMITH: Right. Stacy Palmer, give us a status report, if you will, on the two sectors.

STACY PALMER: Well, in the charitable giving world people are pretty nervous. Fundraisers are waiting right now to see what's going to happen. This is the busiest time of year in philanthropy. That's when all the checks come in. So everybody is waiting to see how the year-end giving will go, and it doesn't look too good right now in some parts, because people gave very generously to the September 11 events, and the economy, which is what always affects charitable giving, it isn't very good, so some people can't afford to give as much as they once did. But on the brighter side, we're seeing some groups doing very well, and people really feeling a sense of giving back, and community that was rekindled after September 11. So it's a very mixed picture in the world of charitable giving. For foundations, it's pretty tough because a lot of them have lost a lot of money in the stock market, and so they are not going to have as much to give in their next giving cycle.

TERENCE SMITH: Okay.

VARTAN GREGORIAN: Can I jump in?

TERENCE SMITH: Yes, go ahead.

VARTAN GREGORIAN: Let me just add one other factor. According to independent sectors, we have 1.4 million charitable organizations in this country, and 80% of American households contribute on the average $1,650 a year. The nice news is that 75% or 76%have said that they'll be continuing to give on the same level as before.

TERENCE SMITH: Mario Marino, give us your perspective on it, particularly the impact on the social services that are provided by so many organizations.

MARIO MORINO: I think, you know as we have said there is optimism for overall giving. But the reality as we're is that there is a supply-demand issue in the social services area where the funding, the supply of money going to social services is going down -- and at the very time in this economy climate, where we're seeing a very tremendous rise in the need, the demand for these services. There is one of the issues we have to look at now and certainly moving forward.

TERENCE SMITH: Stacy, this decline, is it because people gave all their money to 9-11-relate things? Is it because they are worried about the economy? Is there only so much money to go around?

STACY PALMER: It's a little bit of all of those things. Some people who gave to September 11 efforts gave very generously and they can't afford to give anything else, especially if they are worried about losing their jobs or something like that. People who lost a lot of money in the stock market aren't inclined to give the kinds of gifts that they were giving in the past couple of yrs. So it's a combination of things. There's so some concern that in the dispute over the Red Cross and the handling of the donations, some people don't trust charities quite as much as they did a while back. So that's why they are looking very locally, supporting their own communities but they may not trust some of the big national organizations as much as they once did. So that's also affecting things not just their pocketbook.

TERENCE SMITH: Mr. Gregorian, give us the perspective from the foundations. Portfolios are down, but foundations invest in the society in the long term, is that going to be changed?

VARTAN GREGORIAN: It's not going to be changed because we're here for the long term. And Mr. Morino and others are also helping long-term strategy, the venture capitalists and venture philanthropy as well. One of the problems that we should stress, however, is the fact that veracity and transparency are going to be two issues as Stacy mentioned that are going to be crucial for us. After September 11, we brought many organizations at Carnegie to see how we can coordinate our efforts and we emphasize one thing: that out of the New York tragedy we have to come up strong, forthright, and at the same time, educate the public about the issues, what is equity, what is investment, what do we do because otherwise, Stacy, is correct, they may suffer, our reputation may suffer.

TERENCE SMITH: Given these controversies that you're talking about, should people feel confident these delays they give to a charitable organization that the money will actually go to where they intend it to go?

MARIO MORINO: Yes, I think they can. I think people just need to take more time to find out, as Vartan just said, where they should put their money. What are the organizations doing the best jobs? I think today people can make some simple calls, local, community foundations have very good tempos of what is going on in their cities. The other foundations have spent program officers who know the space quite well and they have more online data services like... Where you can find programs to give. So I think that the question is maybe a giver has to take maybe an extra step to figure out where they can put that money with some confidence.

TERENCE SMITH: Stacy, the giving goes on, who is giving and what? Do you still see the very large contributions by wealthy individuals, or are they declining?

STACY PALMER: The number of very big gifts has really slowed down a lot. We have seen a dramatic fall-off in the number of these hundred million kinds of gifts that in the past couple of years were becoming very common and charities were just thriving on those very, very large gifts. But we have still seen a couple of examples. Just the other day, for example, the trustees at Bard College got together and they decided they that wanted to give $120 million that doubled their endowment. And they said that they considered that a September 11 gift. They were think being their values and what was most important it them, and higher education was what mattered to them. And they wanted to make sure that the college was strong. And that's a very interesting kind of gift. I think that's the way a lot of donors, both small and large, are thinking this time. They really want to make a difference. They are thinking very hard about their gifts and I think that's actually the wonderful thing that we've seen after September 11, a rethinking of what matters most, what's important and charities always benefit when that happens.

TERENCE SMITH: And the trustees gave that from their own....

STACY PALMER: From their own pockets yes, absolutely.

VARTAN GREGORIAN: The nice thing is that small people, quote unquote, give the largest amount in America and that is part of our tradition as Mr. Morino mentioned, on a community level, a national level we see that individual Americans have given overall 80% of the giving comes from individual Americans.

MARIO MORINO: One thing I would add on the effectiveness of the giving itself is I think and certainly as Vartan Gregorian says, we can be a lot more effective in a sense of what we're doing because what we find (a) the new people have a lot to learn from the established foundations, number one, in terms of what is possibility, but two, we come across... at least our experience -- there are great leaders in our community. They have proven programs and models, and what they need, they need resources to help them grow their organizations, improve their management to in fact more deliver more value to people very much in need. I think that's a change in the al location of funding that is very important to recognize.

VARTAN GREGORIAN: I think that's a great important factor. We at Carnegie have decided to help non-profit organizations to improve their management and because their health is important to us.

TERENCE SMITH: And didn't - Stacy let me ask you - didn't that come to a head a bit after 9-11 when so

much was given so quickly to so many?

STACY PALMER: It taught us all about how charitable founds are distributed and both the good and the bad. There's a lot of criticism that goes on and people learned a lot about that. It's important to realize that that's why donors have to ask good questions about where your money is going and charities have to answer and be very forthright, just as we've all been saying here; it's an extremely important lesson.

TERENCE SMITH: Is there... I was going to ask Mr. Gregorian, if there's any coordination of all of this, or should there be more of where the money goes and how it's spent?

VARTAN GREGORIAN: Yes, I think there has been some fair and some unfair criticism of New York efforts. We have never seen such catastrophe before in our nation. Oklahoma's was as close as it came. So we have learned a lot now, I hope from Oklahoma disaster and the New York disaster. God forbid, if another tragedy happens we'll know how to coordinate at the beginning.

TERENCE SMITH: What about the public sector here, the states, the federal government? At some time they can step into the breach?

MARIO MORINO: They step into the breach but I don't think there's a part of future going forward. I think one of the big gaps in the social services area today will be it will be very difficult for federal and state money to continue at the level it's been at. I don't how we basically deal with homeland security, deal with a war against terrorism on a global basis and think and expect that we're going to maintain levels of financial support to our social sector, especially in a climate will thing like capital gains taxes will be lower, revenues will be lower, I think all of this is a very serious thing we have to look at and coupled with the issues and the changes in giving in this period really make the issue of effectiveness for non- profit organizations a very important issue going forward.

TERENCE SMITH: Stacy Palmer, a forecast for the upcoming year given all these factors?

STACY PALMER: I think it's going to be a very tough year and that's why a lot of non-profits are making preparations for that. Some of them have actually laid off staff members, they're trimming their travel budgets, they are doing all those kinds of things. It depends on how far this recession goes. It could be very difficult and that combination of people being concerned about the economy and the state and federal budget cuts that charities depend on so much of that money, it could be a very, very tough year and that means the services we count on charities to provide will be cut back.

TERENCE SMITH: Thank you all, three very much. We'll have to obviously stay tuned.

FOCUS - HOLY WRITING

GWEN IFILL: It's called a modern work of art, but it uses an ancient art form. The first hand-written bible in at least four centuries since Gutenberg invented the printer. Our report is from Fred de Sam Lazaro.

FRED DE SAM LAZARO: In the rarefied world of calligraphy, it doesn't get much better than being Donald Jackson; a scribe to the queen of England, a man whose work graces royal proclamations. But from his scriptorium in Wales, a team led by Jackson has taken on what he calls their Sistine Chapel project-- a hand- written, illuminated bible. There's been nothing like it since Michelangelo's time. It will have 160 illuminations using handmade inks and gold and silver to illustrate significant events and passages -- 1,150 pages in all, on vellum -- Made from calf and sheepskin as in medieval times.

DONALD JACKSON, Calligrapher: What you're seeing is just the tip of the iceberg. I mean what goes on underneath is all these different ideas, thoughts, decorative images, so there's enormous variety. But I work to a brief. I work to a brief that's sent to me from St. Johns.

FRED DE SAM LAZARO: The monks at St. John's Abbey and University in Minnesota are custodians of a 1,500-year-old Benedictine tradition. Hand-written scripture is part of that tradition. But they switched to Gutenberg printers long ago and never looked back - not even when Donald Jackson first asked them to sponsor his $4 million idea.

BROTHER DIETRICH REINHARDT, St. John's University: I thought, I need this like a hole in the head. I'm trying to balance the budget, trying to hire new faculty. But then I started to laugh because I thought, wouldn't it be wondrous? It kindled all the romantic parts in my life that 30 years of monastic life still has not wiped out.

FRED DE SAM LAZARO: Many monks shared Brother Dietrich Reinhardt's misgivings. Was this elitist? An expensive anachronism? But in the end, the concerns helped make the case for the Bible -- also to shape it, says Abbott John Klassen.

ABBOT JOHN KLASSEN, St. John's Abbey: We wanted to have a work that would really reflect our awareness of this global civilization, an awareness of the peoples of the earth and an awareness of how those stories can be texts of liberation, texts of hope, texts of meaning for peoples across the face of the earth.

FRED DE SAM LAZARO: In other words, a departure from the euro-centric Christian tradition. This theme is also evident in illuminations, such as this "Genealogy of Christ," shaped like in a menorah.

DONALD JACKSON: It represents a tree of life. And within this tree of life, I've also used fragments of a Buddhist Mandala with cosmic symbols. I've also interwoven withthis fragments of the DNA design, because as I did this, what came out most forcefully to me was what could have been a boring family tree, I realized was everybody's family tree, yours and mine. We are all connected. And so at one point here, finally, I just added the name of Hagar, the handmaiden of Abraham, whose son Ishmael, was the ancestor of Mohammad. So, put her name in Arabic.

FRED DE SAM LAZARO: Like the overall theme, the editorial process is international and inclusive. It is also painstaking.

DONALD JACKSON: I will take a picture of this, digitally, send that by computer to Minnesota from Wales, and invite comments, you know? Is this doing what you feel it ought to be doing?

SPOKESPERSON: I'm satisfied with the image itself, but not with the position or scale.

FRED DE SAM LAZARO: Back at the abbey, the Committee on Illumination and Texts-- monks, nuns and theologians-- pores exhaustively over every detail.

SPOKESMAN: There's a lot of illustration at that point, so this could probably be a t subtler pattern at this point.

SPOKESPERSON: But it needs to come to the surface so that you don't have show-through on it.

DONALD JACKSON: I'll take some of that onboard-- some of it I don't-- and then I move on to doing the finished thing.

FRED DE SAM LAZARO: So, over days, even weeks, the illumination of how the disciples meet Christ on the road to Emmaus takes shape.

DONALD JACKSON: I took that and I developed it a little further, and I changed that costume. I made Christ a little bit more powerful, and I brought in decorative elements to try to suggest a movement from meeting, to going into the house, to him breaking the bread for him, and he vanished from their sight. And, so, I was using words to try to emphasize that. But in fact, what happens in the finished piece is I moved on from that and changed it quite a lot. I had the lettering on the side here in blue and the writing across here, and as I did it, I realized the writing had to be in the bottom and it had to be in gold, because the gold picks up what's going on above here.

FRED DE SAM LAZARO: The text accompanying the illuminations is from the new revised standard version, which removes a lot of male-oriented language. But Abbot Klassen says the text-- which is approved by most mainline churches-- and especially Jackson's illuminations -- cannot be called politically correct.

ABBOT JOHN KLASSEN: They're deliberately abstract and they're abstract enough so that you as a person being invited into the illumination have to engage with it, and bring your own life and your own visual imagination, as well as your spiritual imagination into the illumination in order to create your own meaning and interpretation.

BROTHER DIETRICH REINHARDT: When you think of how you illustrate the exodus, the Israelites being freed from slavery, in a country here where 20% of our people here have ancestors who were slaves five or six generations ago, that has a whole different relevance. This is not a story just of sacred history in the biblical saga, but it's something that continues to shape not only some of the deepest problems in our culture, in terms of race and ethnicity and justice, but also shaped some of the remarkable stamina and creativity of a whole people within America.

FRED DE SAM LAZARO: After its completion-- sometime in 2006-- the St. John's Bible is expected to go on display in a new building at the abbey. St. John's has already raised three of the four million dollars, through corporate, foundation and individual donations. Later in the decade, reproductions will be published for consumer editions.

CONVERSATION

GWEN IFILL: Now, a conversation with a new church leader, and to Ray Suarez.

RAY SUAREZ: Last month Bishop Wilton Gregory of the diocese of Bellville in Southern Illinois was elected president of the United States Conference of Catholic Bishops, the first African-American named to the office. Bishop Gregory was ordained a priest in the archdiocese of Chicago in 1973 at 25. A decade later he was appointed auxiliary bishop of Chicago. And after spending the last three years as vice president of the US Conference of Catholic Bishops, he was elected by his fellow bishops to his current post as president. Bishop Wilton Gregory joins us now. Welcome.

BISHOP WILTON GREGORY: Thank you very much, Ray.

RAY SUAREZ: Let's talk a little bit about the spiritual health of the nation since September 11. What have you seen as you traveled around the country?

BISHOP WILTON GREGORY: Well, Ray, this is obviously become a very fragile time for us as Americans. I happen to have been in transit on September 10, leaving from Newark to go to Washington, and I can remember the trauma that people felt and continue to feel as violence has touched us deeply and personally and left us with a lot of unanswered questions.

RAY SUAREZ: A lot of people have headed to church and to other places of worship -- maybe people who didn't go there regularly before. What do you make of that?

BISHOP WILTON GREGORY: Well, it is not surprising that when we are faced with danger, with tragedy, with sadness that most of us have a tendency to reach back and touch those dimensions of our lives that are our faith heritage. I'm not surprised that many people found comfort and solace in being with other believers in houses of worship, in churches and synagogues and mosques because I think that's what faith does best. It is a source of reassurance and comfort, and it draws people together. I believe Americans wanted to be together in the light of the events of September 11.

RAY SUAREZ: Since withstanding this blow, the nation has embarked on a war. What does Catholic teaching tell us about the justification for war and how it should be prosecuted?

BISHOP WILTON GREGORY: Well, first of all, as Catholics, our moral teaching and our ethical positions go all the way back to Saint Augustine, who said that the state certainly has a right and an obligation to protect its people; and if that obligation and right need to be exercised, it can resort to military action but it must be an action that is proportionate to the harm that has been done. It must be an action that protects to the extent possible innocent life. It must be an action that somehow uses the least amount of violence necessary and certainly must not extend any damage to civilians if that is all possible. And it must be an action that is grounded in justice and in security and not in revenge.

RAY SUAREZ: And from what you've seen so far as we head toward the new year, does America's effort pas on all those counts?

BISHOP WILTON GREGORY: I believe that we as a nation are struggling mightily to follow as close a just approach as possible. There will obviously always be those who disagree with one or another action, but I am pleased and I think that we as Americans are trying to be a just people, ting to protect our nation and to respect the dignity of all human life including those of people in Afghanistan and neighboring countries.

RAY SUAREZ: Now, the Catholic Church is in an interesting position in the United States in the year 2001. It is the largest single faith community by far yet at the same time a distinct minority in American life. So you speak with a tremendously loud voice but still only to some Americans. As a pastor speaking on big issues like war an peace, justice and revenge, who are you trying to reach with what you have to say?

BISHOP WILTON GREGORY: Well, as a pastor, as the bishop of the diocese in southern Illinois, I have to speak clearly to my own Catholic flock, but I must also urge them to be in dialogue with members of other religious faiths and traditions which we have done. If the events of September 11 have had any positive results, it's that Catholics and Christians, Jews and Muslims, people of faith of a wide spectrum of churches and religious traditions, have begun to speak with each other in all kinds of circumstances. For example, since September 11, I've personally been involved with inter-faith activities that involved Christians and Jews and Muslims. Those are graced moments, when we as Catholics along with Christians and Jews and Muslims can come together and to rediscover the richness of our own faith traditions but also attempt to dialogue in a real and sincere way with one another. I think that such opportunities and such moments will bode well for us as a nation and as a people with a wide variety of religious traditions.

RAY SUAREZ: Well, the Conference of Bishops pastoral letter after September 11 called on American Catholics to indulge in prayer, fasting, teaching, dialogue, witness and service. It's kind of an interesting list, both personal and outward looking at the same time.

BISHOP WILTON GREGORY: I think that is part of the tradition of our Catholic faith, that we have always attempted to combine our religious traditions with our social outreach. One without the other is incomplete. But when they are joined together, they present, I think, a complete picture of that which we as Catholics profess.

RAY SUAREZ: And there is a... What kind of spirit when it comes to inter-faith prayer? Some American denominations have gotten into arguments inside the family about, well, just what are we saying when we pray with others not of our own faith, that we're equal, that we're the same, that we're on different roads to a commonplace? It's an interesting argument to listen to.

BISHOP WILTON GREGORY: Well, certainly the occasions that bring people of various religious traditions together in prayer is not an attempt to reduce all religions to the same. It is not an attempt to deny that there are serious, deep and still unresolved differences that separate us. But when we do come together in prayer over a particular issue, it seems at that time we are coming together to emphasize those values that we do share in common. Such inter-faith services are always delicate. They have to be carefully planned, but they should take place in order to strengthen the faith, the tradition and the cooperation that really is a source of our unity in spite of the differences that still exist.

RAY SUAREZ: Your Excellency, thanks for joining us.

BISHOP WILTON GREGORY: Thank you very much, Ray.

RECAP

GWEN IFILL: Again, the major stories of this Christmas day: US Marines in Afghanistan moved to a state of alert, they said there was a possible threat to their base at Kandahar. Marines and soldiers in Afghanistan celebrated Christmas with makeshift decorations and trees. At the Vatican, Pope John Paul said in his Christmas message, at too many children are suffering because of war and strife. And India and Pakistan traded heavy gunfire again, along the border in disputed Kashmir. The Indian prime minister said war is being thrust upon his country. Pakistan's president said his nation is ready to defend itself. Finally, tonight, a Christmas poem from NewsHour regular and former poet laureate of the United States, Robert Pinsky.

ROBERT PINSKY: The jovial playful 17th century poet Robert Harrick, who wrote many poems about the pleases of drink, sex and the playful sensuous life, was also a clergyman. Harrick wrote a Christmas carol to sung to the king in White Hall. His poem present the holy baby born in December as a darling prince of flowers, a far from somber figure. Harrick lets religious feeling emerge from his joy in the world, the world of song, sunshine and flowers.

"Dark and dull night fly hence away and give the honor to this day that sees December turned to May. If we may ask the reason, say, the why and wherefore all things here seem like the springtime of the year. Why does chilling winter's more than smile like a field beset with corn or smell like to a Meade new shorn thus on the sudden. Come and seize the cause why things thus favor thee. Does he who is born quickening birth give life and luster to quickening earth? We see him come and know him hours who with his sunshine and his showers turns all the patient ground to flows. The darling of the world has come and fit it is we find a room to welcome him. The nobler part of all the house here is the heart which we will give him and bequeath the holy and this ivy wreath to do him honor who is our king and lord of all this reveling."

ROBERT PINSKY: I wish you a happy, blooming holiday season.

GWEN IFILL: We'll see you online, and again here tomorrow evening. I'm Gwen Ifill, Merry Christmas, and good night.