The NewsHour with Jim Lehrer

JIM LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight: Our summary of the news; a look at today's report of a major jump in new jobs; some perspective on the judge's decision to call a mistrial in the Tyco trial; a report on Congress' struggle over spending big money on transportation; the analysis of Mark Shields and David Brooks; and a media unit report on a Vietnam War story that didn't go anywhere.

NEWS SUMMARY

JIM LEHRER: U.S. employers added 308,000 new jobs last month, the fastest rate in four years. The Labor Department unemployment report today said the jobs were in nearly all major categories. For the first time in 44 months jobs were not lost in manufacturing. The overall unemployment rate actually ticked up 0.1 percent to 5.7 percent. We'll have more on this story right after the News Summary. On Wall Street today, stocks rallied on the jobs report. The Dow Jones Industrial Average gained 97 points to close above 10470. The NASDAQ rose 42 points, or 2 percent, to close at 2057. For the week, the Dow gained 2.5 percent, the NASDAQ rose nearly 5 percent. President Bush welcomed today's economic news. He joined a job retraining discussion in West Virginia, where he noted the unemployment rate there had dropped a full percentage point since July. He said economic recovery was under way.

PRESIDENT GEORGE W. BUSH: We've added 759,000 jobs since august. This economy is strong. It is getting stronger. You can understand why I'm optimistic when I cite these statistics because I remember what we've been through and we're getting better.

JIM LEHRER: On the democratic side, John Kerry is off the campaign trail, recovering from shoulder surgery. But he issued a statement saying: "After three years of punishing job losses, the one-month job creation announced today is welcome news for American workers. I hope it continues." On the Senate floor today, Democrat Jon Corzine of New Jersey added this:

SEN. JON CORZINE: One of the things that has been happening in our job market is as people lose a job and then they take another job, we've seen a decline at 21 percent decline in the average wages of people who get reemployed.

JIM LEHRER: The Tyco trial ended today in a mistrial. A New York State judge declared it so after 11 days of jury deliberations. He said it was because of intense outside pressure on one juror. Dennis Kozlowski, Tyco's former chief executive, and former financial officer Mark Swartz were charged with looting the conglomerate of $600 million. They face a possible retrial. We'll have more on the story later in the program. The Bush administration today released thousands of classified Clinton era documents to the 9/11 Commission. Yesterday President Clinton's former legal adviser said the current administration had failed to turn over all requested counterterrorism material. Presidential papers are usually sealed for five years by law. But an exception was made in this case to allow the commission access to the material. In Iraq today, a leading Sunni cleric in Fallujah denounced the mutilation of four American contract workers killed Wednesday. But he did not condemn the slayings. Another senior cleric said the mutilations were a "distortion of Islamic principles" and that message would be delivered in mosques across the city at Friday prayer services. Also in Fallujah today, the U.S. Military announced the death of one marine in the Anbar Province. And a roadside bomb in Baghdad killed one U.S. soldier, wounding another. A bomb was found today on railroad tracks in Spain, between Madrid and Seville. The authorities defused it, and announced army troops will begin guarding key railway lines. We have a report from Philip Reay-Smith of Independent Television News.

PHILIP REAY-SMITH: More than 20 pounds of explosives were packed under the tracks. Attached to them, 136 meters of cable and a detonator. On a day when millions of Spaniards set off on their Easter week holidays, this was an act calculated to bring terror to a nation yet again. Ominously, though, Spanish radio reported the explosive used was Goma 2 Eco, exactly the same type as was used in last month's Madrid attacks. And wounded more than 2,000 was attributed to al-Qaida. Nerves have been on edge for another terrorist attack since three letter bombs were found at a sorting center in northern Spain on Thursday night. And another attack had been feared. This evening Spain's high speed trains are stopped in their sightings. Following discovery of the explosives, the government has vowed to protect its railways using helicopters and army vehicles.

JIM LEHRER: Seven new nations entered NATO today in a ceremony in Belgium. We have a report narrated by Vera Frankl of Associated Press Television News.

VERA FRANKL: After years of negotiations, seven former communist countries had finally joined NATO. The foreign ministers of Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovenia, and Slovakia joined their colleagues from the other 19 allies at a flag-raising ceremony in Brussels, putting an end to decades of divisions in Europe. The Romanian foreign minister summed up the general feeling. ( Applause )

MIRCEA GEONA: Today's event is a new, major victory for those who suffered from the tyrannies of Nazism and communism. It is a new triumph of peace and freedom on our continent.

VERA FRANKL: But beyond the exhilaration, there are questions about the way the organization will operate with 26 members, and there are doubts about whether the allies will reach consensus about deploying troops in Iraq.

COLIN POWELL: The U.S. believes the alliance should consider a new collective role after the return of sovereignty to an Iraqi government.

VERA FRANKL: NATO's expansion will be followed in a month by the European Union opening its doors to ten new members.

JIM LEHRER: Tourists and visitors to some of this country's closest allies will be photographed and fingerprinted when entering the United States. The Department of Homeland Security today said the new rule would be implemented in September. It will affect 13 million visitors a year from 27 countries such as Britain, France and Japan. They had previously been exempted from the increased security requirements imposed in January. The House of Representatives overwhelmingly passed a transportation bill. The vote was 357-65. It provides $275 billion for highways, mass transit and safety programs. The bill must now be reconciled with the Senate version. President Bush has said the bill is too costly and has threatened to veto it. We'll have more on the debate later in the program. Also ahead, the new jobs report; the Tyco mistrial; Shields and Brooks; and the tiger force media story.

FOCUS - TYCO MISTRIAL

JIM LEHRER: Now, the Tyco mistrial and to Ray Suarez.

RAY SUAREZ: After two weeks of deliberations, the high-profile case against former Tyco executives Dennis Kozlowksi and Mark Swartz ended today in a surprise, a mistrial. Kozlowksi, the former CEO of the company, and Swartz, the former chief financial officer, had been accused of illegally taking more than $600 million from the company. The judge declared the mistrial after saying that a juror had received a letter considered coercive or threatening. Later, Manhattan District Attorney Robert Morgenthau said in a statement: "It is unfortunate that, after a six-month trial, the proceedings ended in a mistrial." Defense attorneys had asked for a mistrial. Charles Stillman defended Mark Swartz and had this reaction to the trial's strange end.

CHARLES STILLMAN: We made this motion at the end of last week and, frankly, made it expecting to win it. We didn't win it. Things have occurred. Again, I have some knowledge that you all don't have. This is how it came out. So therefore we have to deal with the reality of life. I've been doing this for 40 years. I will tell you, if I piled up all the experiences top to bottom, I ain't seen nothing like this yet.

RAY SUAREZ: More now on today's developments and the future of this case. It comes from "New York Times" reporter Andrew Ross Sorkin, who has been covering the case and was in the courtroom today, and Robert Mintz, a former assistant U.S. Attorney who specialized in white-collar crime. He's now in private practice in New York. Andrew Sorkin, you were in the courthouse earlier today when word came down. What was the reaction?

ANDREW ROSS SORKIN: Well, there was an audible gasp in the courtroom this morning. We all were waiting for a verdict today. It was supposed to be D-Day for a verdict, and as everyone filled into the courtroom, there were court officers everywhere, we thought the judge was coming back and the jury was commenting back with a verdict. Instead, he gave us obviously a very different response, which was that he was under the impression that this jury could no longer go on and that there had to be a mistrial. We understand in reporting in our papers tomorrow that juror number four, Ruth Jordan, this is the woman who flashed the supposed okay sign at the defense last week, came in this morning and told the judge in chambers that she had received a letter from an anonymous person who had put some form of pressure on her, and that she felt terrified in the words of one reporter briefed on it. The discussion chambers are sealed so we don't know exactly what went on there but that's pretty much what the day looked like.

RAY SUAREZ: Once that decision was made, there was no going back, apparently.

ANDREW ROSS SORKIN: Right.

RAY SUAREZ: But it seems from the stories the jurors are telling now, they claim pretty close before this mistrial was called.

ANDREW ROSS SORKIN: Exactly. We've spoke to many jurors this afternoon, the indication we had so far is that there would be some convictions. There are 32 different charges ranging from grand larceny to conspiracy to securities fraud, and it looked like they would have been convict at least on some of those charges and at least in some cases, on some of the grand larceny charges, which carry the longest sentencing. So in a way, this may be a victory for the defense this morning.

RAY SUAREZ: But apparently even at the close of business yesterday, they were tantalizingly close to handing down some of those verdicts -- the whole case not even getting to today's announcement, is that correct?

ANDREW ROSS SORKIN: Right. We thought that they were going to come back yesterday. I think no question. We had been sitting there all week. Obviously the case looked like it was almost in peril last week when she made the motion and there were motions for mistrials and all of the reporting over the weekend. But I think that this letter this morning, combined with what happened over the weekend last weekend, apparently the juror was also contacted and in that case by what we are describing by a crank phone call, that she also reported. So I think between that and this -- the snowball effect, the judge said we just really can't go on.

RAY SUAREZ: Judge hasn't said much for the record but has he told the two sides when to reappear in his courtroom?

ANDREW ROSS SORKIN: He has. The date is May 7. And we will see where it goes. It sounds like the problems would like to turn around and get this trial started all over again as soon as possible. That looks unlikely, simply because the judge has a lot on his calendar. He had expected this case to be over at Christmastime and has had to cancel close to -- to three months worth of other trials which I expect he'll have to get to before this one starts up again.

RAY SUAREZ: Robert Mintz, help us understand what a mistrial is. Is it like a draw, like the trial just ending has never happened?

ROBERT MINTZ: A mistrial really means that the case is played to a draw. As if the trial never happened and both sides have to go back to square one and start again. The only difference is that in the instance of a mistrial, both sides have the advantage of having transcripts and the testimony from the prior trial. They both have a preview of what the other side's case was. Generally, this is something favorable to the defense. The defense likes to have a preview of all the government's witnesses, they like to have testimony that they can use as fodder for cross-examination during the second trial, and is generally a huge advantage to the defense to have a mistrial. Here, I think we have a circumstance where the government will also benefit. The government's case here went on longer than it should have, it was unfocused at times. It rambled. Jurors seemed to be bored with some of the government's case. I think on the second time around we are going to see a much more focused case, one that is directly addressing the issue of criminal intent. It certainly is not going to take six months for the government to try this case a second time.

RAY SUAREZ: When you talk about the prosecution putting on a different case this time, when they come back after a mistrial, does it have to be with the same charges, the same bill of particulars, the same indictment?

ROBERT MINTZ: They are going to try essentially the same case. They have the ability to drop some charges. They have the ability to jettison some evidence. They have the ability to not put on some of the witnesses they put on before. It's really a retooling of the case -- essentially the same case. We are not going to see anything dramatic in terms of the different presentation but I think we will see a streamline case, one that hones much more closely to the main theme of the government's case, one that does not have some of the sideshows that we saw go on during the first trial.

RAY SUAREZ: Is it fair game to go to the jurors for both sides to go to the jurors and say, what worked? What didn't work? What were you close on before you found you couldn't deliberate any longer?

ROBERT MINTZ: There have been jurors who have spoken to the media and you can be certain that both the defense and the government are going to listen very closely to what is said there. They are going to try to go to school on this first trial. They're going to try to learn what was successful. They're going to learn how jurors reacted to Mr. Swartz's testimony, for example, and both side sides are going to try to go at this a second time around with a better problems for the government and better defense for the defense team.

RAY SUAREZ: Is contacting juror number four in the way that apparently ended the trial a crime?

ROBERT MINTZ: That's an interesting question. If she was actually threatened, then it certainly is a crime. If someone was simply voicing a strong concern, objecting to perhaps the fact that she was unwilling to convict these defendants, it may or may not be. It's something that the DA's office is going to look at closely. It depends exactly what was in the note and at this point it is unclear what exactly was said to her. What we do know is that it terrified her, affected her ability to continue with these deliberations and that is really what ultimately resulted in the mistrial that we saw today.

RAY SUAREZ: Andrew Sorkin, did we know more about juror number four than is usual in a trial of this kind?

ANDREW ROSS SORKIN: Well, you know, I think we only knew more because she made this signal that we all took to be this okay sign in the direction of the defense. And as a result, the press went to town and it became a feeding frenzy. Her name came out in the public. That's something that typically does not happen. And I think that's by the way, how a letter could even get to her. So this is as extreme case, and I think it's probably different than most. I'm not sure we can take tremendous meaning away from this except to say I think it may have serious implications on the jury system going forward in America.

RAY SUAREZ: Her photo was shown in the newspaper, she was seen on local news as you mentioned. Her name became public. Are those things just journalistic custom, or are there rules against doing that?

ANDREW ROSS SORKIN: Really it's a journalistic invention not to name jurors. In this instance there were some newspapers and there were some TV reports that included her name. The "Wall Street Journal" was first newspaper to report her name and then "New York Post" rather, had a front page story cover on Saturday. That fed the frenzy. A lot of organizations chose not to simply because of the journalistic convention. I have to say the judge admonished the media many times throughout the past week about this very situation.

RAY SUAREZ: Has she spoken to reporters at all yet?

ANDREW ROSS SORKIN: Not yet, but we're hoping.

RAY SUAREZ: Andrew Sorkin, Robert Mintz, thank you both.

FOCUS - JOBS JUMP

JIM LEHRER: Now Margaret Warner has our jobs story.

MARGARET WARNER: Last month's big spurt in new jobs, some 300,000- plus, is a huge increase over what the country has seen in the past six months, when the average growth has been just 75,000 new jobs a month. For a closer look at what's happening, we turn to Lisa Lynch, former chief economist for the U.S. Department of Labor and now an economics professor and academic dean at the Fletcher School at Tufts University, and Mark Zandi, chief economist and cofounder of economy.Com, an economics research firm. Welcome to you both. Mark, you look at these numbers, what do they tell you? Is job creation on the rebound?

MARK ZANDI: It certainly is. It was a great report. It indicates that the job market broadly speaking has turned the corner after three very long lean years, I think we are going to see improvement. It's not only the march gain, it was gain in January and February. They were both revised higher. And moreover, the job gains were very broad based across many industries: Construction, wholesale, retailing, parts of financial services, even state and local governments added to payrolls. It was a very, very positive report.

MARGARET WARNER: Lisa Lynch, a positive report. What do you see in the numbers? Who's getting the new jobs?

LISA LYNCH: When we're looking as Mark just mentioned it, when we look at the numbers, we are seeing employment across the board in all sectors with one important exception and that's in manufacturing. While we do not have any job loss in the manufacturing sector for the first time in 44 months, we did not see a pick up in the manufacturing sector. But we saw restaurant and hotel workers being added on. We saw workers in supermarkets being added on -- part of that reflecting the settlement of the grocery store strike out in California. We saw workers in the health care sector and hospitals being added on. We saw business services adding employees, mortgage brokers being added on. So, in general, with the very important exception of manufacturing, we are seeing job growth across all of these different types of occupations.

MARGARET WARNER: Mr. Zandi, we heard someone in the News Summary, I think it was Democratic Senator Corzine, say well, these are new jobs, but when people take the new jobs, they're paying less than their old jobs. Can you look at these numbers and tell whether that's the case?

MARK ZANDI: Well, I think there is some evidence to suggest that that's true, yes. A big share of the job growth or increase since this last summer has been in temp jobs. And temp jobs are, in fact, lower paying. Manufacturing jobs, Lisa mentioned, we haven't created any of those and those are generally higher paying jobs. So I think that it is fair to say that the job growth, at least to date has been among occupations and in industries that are generally lower paying.

MARGARET WARNER: Do you take the fact that manufacturing didn't lose any jobs? It has, as Lisa Lynch said, for 44 months. How do you read that?

MARK ZANDI: Well, I do take some solace in that. Although I think it's fair to say that all those manufacturing jobs that we have lost over the last four years, they're not coming back. They're gone forever. And even in the best of times we are not going to create too many manufacturing jobs. So we shouldn't look to manufacturing for any significant job creation. All we can really hope is that manufacturers don't reduce their payrolls.

MARGARET WARNER: So, Lisa Lynch, explain what would seem to the average person a conundrum here, which is that there are a lot new jobs and yet the number of unofficially employed people just as a gross number went up by one hundred plus thousand - I think a hundred and fifty thousand. And the unemployment rate also went up 1 percent --.1 percent . How does that happen?

LISA LYNCH: Well, what's happening in the economy right now is that employers are finally adding on new jobs into the economy. But we've had an unprecedented drop in the labor force participation rate of workers and a lot of people have gotten very discouraged about employment prospects and have stopped looking for work. So what one hopes to see then is those folks who would stop looking for work who were not counted as unemployed now as employers start advertising for new work coming back into the labor market, and when that happens, you will see up ticks in the unemployment rate. Now the unemployment rate just moved from 5.6 to 5.7 percent. That's a very small increase and the Bureau of Labor Statistics, in fact said that was not a significant increase in the unemployment rate. But we should not be surprised if we actually see the unemployment rate not dropping or even increasing a little bit more. It will be not such bad news, if that's reflecting people coming back into the labor market because they finally have an opportunity to apply for some jobs.

MARGARET WARNER: Mark Zandi, who is not benefiting or who didn't benefit from this big, big up tick this month?

MARK ZANDI: Clearly all those folks who worked in manufacturing are still struggling. When you look across the country from Boston to the Bay Area of California, the real trouble is in the Midwest, in big parts of the South. - the Mountain West; the Pacific Northwest. There are still large areas of the country where people are struggling. It is important to note that even though the job market is improving, it is still very soft. And if you lose your job and you are unemployed, it is very difficult to get employment. For example, a statistic, one-fourth of all the unemployed are unemployed more than 27 weeks. And that means they are running out of unemployment insurance benefits. So that's close to a record high. So it is a very soft job market. It is improving and should get better but it is still very soft.

MARGARET WARNER: And, Lisa Lynch, how unusual is it that we've had at least nine months of really robust economic growth -- and until now, the job growth just wasn't keeping pace at all and everyone was ringing their hands and saying why isn't it? Now we see this really big spike: One, is that unusual and two what does it tell you?

LISA LYNCH: Well, I mean it's about time we're seeing this job growth and economists have been predicting we see a big up tick in the employment numbers for many months.

MARGARET WARNER: Many months.

LISA LYNCH: So while this number was three times bigger than what people had been forecasting, I think it also, most people were saying it's about time. But I think it's important to look at that number and realize that, for the economy to keep pace with the growth of the population, we should be adding between a hundred and twenty and a hundred and fifty thousand jobs a month, just to keep pace with the growth of the population. So this number is over 300,000, but we have over two million people that net job loss since the beginning of this recession. And we're going to need to have many months going forward of healthy job increases of two hundred to three hundred thousand before we are going to make a dent into the unemployed and to have an impact on those long-term unemployed that Mark was just talking about.

MARGARET WARNER: Briefly to you both, starting with you, Mark Zandi, can you look at all these numbers and the information that was released today and tell whether this growth is sustainable?

MARK ZANDI: Well, I think we should be optimistic, yes, that it is going... we are going to create more jobs and the job market is going to improve. But it is going to be a bit of a slog. There are many waits on the job market that aren't going to go away quickly. And while things will get better, they'll get better relatively slowly.

MARGARET WARNER: Lisa Lynch, your view on that?

LISA LYNCH: Well, I would agree with Mark as well. And I think in particular for the fact that we have one in four people out of work for six months or more. They really need to have a job growth -- an economy that's creating a lot of jobs to pull them back in and let's hope that we have many months going forward with job numbers like we saw today.

MARGARET WARNER: Lisa Lynch, Mark Zandi, thank you both.

JIM LEHRER: Still to come on the NewsHour tonight: The transportation flap; Shields and Brooks; and the tiger force.

FOCUS - ROCKY ROAD

JIM LEHRER: Kwame Holman has our report on the highway spending debate.

KWAME HOLMAN: Every six years Congress takes up major transportation legislation to fund highway construction and mass transit programs nationwide. The bill brings new roads, bridges and jobs to every state, and members of Congress usually are eager to vote for it. But this election year, increased highway spending is threatened by the need to control rising budget deficits. Under pressure from fiscal conservatives, President Bush called for a trimmed-down transportation bill, no more than $256 billion. Nonetheless, the Republican- controlled Senate approved a $318 billion bill, and today the House passed its own $275 billion measure. Mr. Bush has promised he'll veto either of the higher figures. But House Transportation Committee Chairman Don Young said even the House bill is tens of billions of dollars less than what's needed for America's roadways.

REP. DON YOUNG: Before elections we hear a lot of people talking about Social Security, Medicare, education, border patrol, homeland security, prescription drugs; and they are all good and they are all needed. But there is only one way we can have the financial revenue to get those achievements done, and that is to have a good infrastructure system in place for the future.

KWAME HOLMAN: Oregon Democrat Earl Blumenauer:

REP. EARL BLUMENAUER: It was wrong for the President of the United States to draw a line here that he is going to veto his very first bill. I, frankly, don't think he will. It would be a tragedy for our communities. I do not think that this is the place to try to make the claim for fiscal responsibility.

KWAME HOLMAN: But a major area of disagreement in the House was over how to divide highway money among the states. Members from fast-growing, so- called "donor" states complained of paying more in federal gas taxes than they get back in federal highway dollars. Leaders promised to address that issue. There also was criticism that the bill included some 3,000 special projects, or earmarks, for members' home districts. Arizona Republican Jeff Flake proposed subtracting the cost of such special project earmarks from the overall sum each state receives from the federal government.

REP. JEFF FLAKE: What it does essentially is says that if you want an earmark, that is fine, but that earmark should come out of your own state's formula, not everyone else's. I am not saying at all that nobody ought to get earmarks.

SPOKESMAN: I understand what the gentleman from Arizona is trying to do, and I want to compliment the gentleman. He is one of the few people in this body who did not ask me for any earmarks. So I do thank him for that. And I understand what he is trying to say. But I have to remind everybody about earmarks in this legislation. It is, in fact, a request from members, and it is the one time they might have an opportunity to represent their district.

KWAME HOLMAN: With passage of the bill still in doubt last night, chairman young added several more members' earmarked requests to the final bill. This morning, Arizona Republican Flake had this reaction:

REP. JEFF FLAKE: Mr. President please veto this bill. Please veto this bill. This Congress is out of control and it is in desperate need of some adult supervision.

KWAME HOLMAN: But most members felt differently. The transportation bill passed by a landslide.

SPOKESMAN: The bill is agreed to and without objection laid upon table.

KWAME HOLMAN: With most republicans and nearly every democrat, including New York's Tim Bishop, voting in favor.

REP. TIMTOHY BISHOP: If the administration follows through with the threat to veto this bill, they will be denying tens of thousands of workers in New York and nationwide good jobs.

KWAME HOLMAN: This afternoon, House members departed for their two- week spring break. The highway spending debate will resume when a House Senate Conference meets to come up with a final transportation bill.

FOCUS - SHIELDS & BROOKS

JIM LEHRER: And to the analysis of Shields and Brooks: Syndicated columnist Mark Shields and "New York Times" columnist David Brooks. David, today's jobs numbers. Any politics to be read into those?

DAVID BROOKS: Well, there will be tremendous political effects. You know, if you watch the presidential campaign, as I did, and we did, you would have thought first of all there was no service sector in this economy. It was all manufacturing and that all the jobs were going overseas. You would have the gotten the impression we are getting our clock cleaned by China and India and Mexico. But the fact is, since 1995, productivity in this country has been fantastic, has risen strongly. When that happens, you may still have some ups and downs but you get wage growth and job creation. So what we saw this month was finally the jobs appeared and you know, if we've had $500,000 jobs -- if we get 500,000 jobs this first quarter, if we get 500,000 the next quarter and 500,000 the quarter after that, that's a million and a half jobs. That begins to have a real effect on the mood of the country and obviously it's great for Bush.

JIM LEHRER: Great for Bush?

MARK SHIELDS: Sure, the end of bad news is always good news. And it had been nothing but bad news for the administration. Just to put it in perspective, Senator Hillary Clinton tried to half kiddingly, to encourage Republicans, said look, during Clinton years, we said we produced in eight years 23 million jobs. You can say in 11 years the country has produced 21 million jobs because there still are two million jobs short. The payroll is gone in private sector, and the important thing is to remember the 657,000 government jobs create that have kind of cushioned that, which seems an unlikely thing in a conservative administration. But it is good news for president. It takes essentially a quarter, three months, to change public perception and feelings about the economy in one direction or the other.

JIM LEHRER: So you mean the jobs are always going to lag behind?

MARK SHIELDS: If we get three good months of news and 500,000 a month as David describes, it certainly will be -- it will improve the president's standing on that issue considerably.

DAVID BROOKS: Not that he deserves the credit. I mean, the economy is not something that changes when the administration changes. If you had to trace the strength of this economy, go back to 1977, to the beginning of deregulation under Carter and a whole series of good economic policies, Federal Reserve policies and we've had a long run of incredible stability in our growth by historical standards and a long run of productivity increase which has created growth increases. The president happens to get the credit but, you know.

JIM LEHRER: David, you used the term historical, did do you, either of you recall a time when something nice like this happened in the economy and the president said I don't deserve any of the credit because it's all because of things that happened in 1977 or whatever?

MARK SHIELDS: You say that about bad news. You never say it about good news. It's our farsighted visionary policies which we had the courage to lay down.

JIM LEHRER: Okay. The Fallujah killings and the body mutilations; these images went all over the country. What do you think their impact is going to be, Mark?

MARK SHIELDS: I'm not sure what the impact will be, Jim. I think immediately it's very, very negative. First of all the argument the administration made about the progress, how safe and secure things were has been undermined. General Anthony Zinni, the former marine four-star general commanded in that area, said this means increasingly we are going to be going alone, there will be less chance of other nations participating.

JIM LEHRER: This will scare them off?

MARK SHIELDS: Scare them off. Add to that, Jim, sense that the only way to respond to this kind of barbaric massacre is through military, a show of military strength, a show of military strength is inevitably going to involve some civilian casualties and --

JIM LEHRER: And marine casualties.

MARK SHIELDS: Which will start a further cycle of violence and antipathy toward the United States. And there are questions, in spite of the significant material improvements, whether schools or utilities or whatever, whether in fact those are weighed by the fact that we were the invading and occupying army that we are.

JIM LEHRER: Tough time?

DAVID BROOKS: It's tough for all of us to see those images. First of all I wouldn't generalize from Fallujah across the country. I think the Sunni Triangle is one area. The rest of the country is doing a whole lot better. You are not seeing this kind of massacre; you wouldn't see that kind of mob violence. But I think you see in this what we fully expected to see, which is a regime that was really psychologically damaged, base on sadism and the sadists don't go away. The people who are victims are victimized by it and the people who perpetrated the atrocities of the regime, their mentality is still the same. You get violence like you saw in Fallujah by the people who really ran the regime and the mob reaction you get. Will the American people pull back? If you saw John Kerry's comments and George Bush's comments, no, I don't think there is any evidence that they will pull back, nor do I think there is evidence the American people will want to pull back because of this. There was a lot of talk after Mogadishu that the American people couldn't take a look at those pictures and still want to....

JIM LEHRER: Somalia.

DAVID BROOKS: And want to go on with that. But if you look at the polling and the actual evidence of polling at that time, there was people ascribe the American people's view that we want to get out because it is too horrifying. In reality, the polling never moved. I think that's going to be the case here. It will be harder to get international allies because of the sense that we are in a crisis, but once this sovereignty moves over to the Iraqis, the Iraqis will then have to police Fallujah and they'll do a better job of it than we are capable of doing.

MARK SHIELDS: Everybody I've talked to, Jim, Republicans and Democrats, members of Congress, have come back with the same sort of dispirited attitude and report to make, I mean about lack of security, about two senators, one Republican, one Democrat today tell me about being over there in a similar situation with these very folks -- the company that -- driving 95 miles per hour, simply to avoid, through a city, to avoid being shot at -- and that you are constantly aware of this and constantly surrounded by armament. I think that what it adds is fuel to the argument that the administration was unprepared for any post-war plans, that they really misread the situation there, that whatever you say Fallujah in 2004 is not to be confused with Paris in 1944.

JIM LEHRER: So when you said a moment ago, David, that this was expected, did you really mean that? That this kind of stuff....

DAVID BROOKS: I think something... unexpected and I said it on this program.

JIM LEHRER: You're right.

DAVID BROOKS: There were some things not expected. It was not expected that there were so many rejectionists, so many Sunnis would be rejecting 9 new Iraq. On the other hand, in the past several months, politically, there has been a lot of progress on that front. The Sunnis have been more involved in constitution making and the violence has come from foreign nationals apparently. And that, too, is not quite expected. Nonetheless, I guess none of us, neither Mark nor I have been there, but I guess we talked to different people because I've heard horrible things about the Sunni Triangle. I've heard reasonable progress in other parts of Iraq where the economy is beginning to pick up where the security situation has improved. The main problem that we face is getting out and handing over sovereignty to a real government because it will be only up to the Iraqis.

JIM LEHRER: New subject. Condoleezza Rice will testify in public under oath. The president changed his mind on that. How major a reversal is that for the president?

DAVID BROOKS: It's pretty major. You know, they hold the president and the president and the administration came in thinking all these other past administrations they buckle with pressure but we are going to protect the prerogative of the presidency. That's a good principle. Another good principle is don't be a schmuck. They got punished. And if they had just, you know, cooperated fully from the beginning, they wouldn't have all this mess and I hope they've learned a lesson. Just open it up from the beginning, time after time after time, they say we're going to stand on principle, we're not going to get walked over by our enemies. They get walked over, pay a huge price and then they cave in. So just open up from the beginning.

JIM LEHRER: What do you think? Is this a big deal for the president to bend on this one?

MARK SHIELDS: Jim, they stood on principle, constitutional principle, legal principle, separation of powers, executive privilege, that was shoved aside by a larger principle - the re-election of President George W. Bush -- because the opposition to this, to not testifying, when in fact, I mean as we commented last week, they put everybody available with a microphone. The only difference was she wasn't under oath. I mean, she was answering questions from anybody who would ask them, who had a 50 watt radio station. But she wasn't under oath. So that became, in the eyes of the public, the idea, why won't she go under oath? I mean that's what was lost. And I guess what I'd add to that is the pressure came, Jim, from the Republicans. In the Senate, Senate Democrats were preparing to offer an amendment that demanded that she testify before the commission to make this exception. They had enough Republican votes -- Republicans who didn't want to go and Bill Frist had to tell the White House, look, this is really going to be a political embarrassment.

JIM LEHRER: Now that she is going to testify on Thursday morning, and is fireworks? When you look ahead to Thursday morning, David, you see oh my goodness, this is going to be a major event in terms of what is going to be said and done by her and the commission?

DAVID BROOKS: I think if you look at the commission, you don't quite get Judiciary Committee fireworks when you get a Bork or Thomas. They seem to be a little more subdued in their partisanship while being partisan. They're clearly partisan but they're not quite as vitriolic as a Joe Biden or Ted Kennedy or an Orrin Hatch can possibly be. So I think it will be interesting. I don't expect fireworks. If there is anybody who can handle some degree of pressure, who will respond with sort of a calmness, it certainly is Condoleezza Rice.

JIM LEHRER: What do you think? What do you predict, sir?

MARK SHIELDS: I think, Jim, the greater irony of this week has been that George Bush's great weakness was the economy maybe and seen signs of the Republican partisan - that this could be neutralized and go away. His greatest strength, his resoluteness, straight shooter is under attack. I mean he now is equal to John Kerry in the eyes of the L.A. Times poll, a very respected national survey of who flip-flops more, and that this resolute, strong commander in chief levels, tells you what it is and is back and forth in too many places. Well, I think this is what she has to bring with some clarity to the administration's position which, has appeared unclear and her own contradictions on matters of whether the president did meet, had a meeting with Richard Clark the day after or not -- had to back off of that, whether the administration had a policy, didn't have. I can't understand why the administration doesn't say look, we didn't do much before Sept. 11. But my goodness since Sept. 11, George W. Bush has been in charge. Why that? Constitutionally incapable of saying we made a mistake. We were wrong. What is it, David?

JIM LEHRER: Explain that, David.

DAVID BROOKS: I think there is a four-sentence answer to what they should say. It starts with that answer. It wasn't a high priority for us but it wasn't for anybody else in the country. We didn't know this sort of thing was going to happen. It happened. I'm not sure we could have prevented it even if we did know. But since then we've tried everything we could and we've turned the country on its ears so it doesn't happen again and, you know what, it still may happen again because there is no way of preventing this 100 percent, but the fact is we're doing everything we can and we learned our lesson. I think the American people would accept that as honest and true.

JIM LEHRER: Going back to her testimony specifically on Thursday, there is going to be kind of a ghost of Richard Clarke there the whole time that says, hey wait a minute now, he said this and what do you say about this and all that?

DAVID BROOKS: According to what people are saying, the main emphasis will be on Clarke's assertion, which was one of the assertions accepted by the commission that it just wasn't an urgent priority.

MARK SHIELDS: And I mean complicated by the fact that Bill Frist, respected Republican leader last Friday went into sort of bargain basement McCarthyism against Richard Clarke on the Senate floor, all but accused him of perjury and I thought Clarke had a good rebuttal. He said declassify everything I've ever written - declassify everything I ever said -- calling his bluff. I think that's so very much so

JIM LEHRER: What was that Frist thing all about, David?

DAVID BROOKS: I have friends who got into big trouble for apparently withholding information from Congress during Iran-Contra. If he said things under oath that directly contradict things that were said now under oath, then he should be challenged on that. You can't go up and lie to Congress. I don't know if you need a big perjury trial or anything but there have been many, many contradictions over what Richard Clarke has said over the past two years. I happen to think he has ruined this whole process by turning this into a partisan witch hunt when had you other people speaking in much more measured tones in non-partisan ways and much more credible ways. And so I think he bears a lot of the blame. The administration has a lot of the blame for what has happened in this town the past two weeks.

MARK SHIELDS: Like going to Salem and blaming the witch for the witch hunt. The witch-hunt began after he testified. That when is the full force of the administration came down, he's doing it because he is a partisan, going to get a job with John Kerry. Untrue, untrue. He did it because he didn't get a job.

DAVID BROOKS: -- 60 Minutes and turn this into a partisan witch-hunt.

MARK SHIELDS: He made his case. He didn't go into a motive. He didn't say George W. Bush doesn't like America. He's trying to sell us the book.

JIM LEHRER: I like both of you very much, but we have to say good-bye for tonight.

FOCUS - HIDDEN TRUTH

JIM LEHRER: Finally tonight, a newspaper's series on war crimes in the Vietnam War and why you may be learning about it right now for the first time. Media Correspondent Terence Smith reports.

SPOKESMAN: For a distinguished example of investigative reporting within A...

TERENCE SMITH: When the Pulitzer Prizes for journalism are announced next Monday at Columbia University, one of the finalists in the investigative reporting category will be a 36- year-old story, published just last fall. Over four days in October, the "Toledo Blade" in Ohio published a series entitled "Buried Secrets, Brutal Truths." It detailed atrocities allegedly committed in the central highlands of Vietnam in 1967 by tiger force, a reconnaissance unit of the 101st Airborne-- Americans soldiers all.

SPOKESMAN: So this is essentially...

TERENCE SMITH: Reporters Michael Sallah and Mitch Weiss investigated the allegations against this unit, which they say was created initially to "out guerrilla the guerrillas."

MICHAEL SALLAH: They started venting their frustrations on civilians: Men, women and children. They would throw grenades into underground bunkers, creating mass underground graves. They would open fire on elderly farmers, unarmed, of no threat to the soldiers at the time. They would go on so far as a baby was beheaded for its Buddha Band. They would cut off the ears of their dead prey and then they would wear them as necklaces.

SPOKESMAN: I thought I was doing my job when I did it.

TERENCE SMITH: The alleged crimes, never before reported, occurred over seven months in 1967. Sallah and Weiss spent roughly the same amount of time last year burrowing through a trove of documents, uncovering the hidden truths behind what appears to be the longest series of atrocities committed by an American unit in the Vietnam War.

SPOKESMAN: Most of these incidences could be classified as war crimes.

SPOKESMAN: Unlawful killing of Vietnamese nationals.

TERENCE SMITH: And these are classified documents?

SPOKESMAN: These are classified documents.

TERENCE SMITH: Much of the documentation came from a former military prosecutor, who turned over his files to a member of the "Blade's" Washington Bureau. Among his files were records from a four-year investigation conducted by the army from 1971 to 1975. The inquiry, the longest war crimes investigation of the Vietnam era, produced accusations against 18 soldiers, but no prosecutions. Sallah and Weiss uncovered more evidence through freedom of information requests and from the national archives. Then they traveled to Vietnam to interview witnesses in Quang Ngai Province, the tiger force's hunting ground. They also spoke to veterans of the force and reported their attitudes nearly four decades later.

MICHAEL SALLAH: Some surprisingly expressed remorse. They really had clearly bad feelings about what happened, what they did, and how they've lived with this ever since.

MITCH WEISS: If these were fog of war killings, you could give them the benefit of a doubt, but with this particular unit, especially towards the end of the seven months, it was, "there's a village, there are people. Let's line them up and kill them." And that's exactly what they were doing.

TERENCE SMITH: Any idea how many people were killed?

MICHAEL SALLAH: Terry, I don't know if we'll ever really know how many. We believe that there were several hundreds. We feel fairly strong that it's in the hundreds.

LT. GEN. BERNARD TRAINOR: If the allegations are true, they are war crimes. They should have been investigated.

TERENCE SMITH: Retired Marine Corps Lieutenant General Bernard Trainor served two tours in Vietnam. He was also a military correspondent for the "New York Times" and is now a senior fellow at the Council on Foreign Relations.

TERENCE SMITH: Any idea why such an investigation, which allegedly produced accusations against 18 members of this unit, would not have been pursued in 1975?

LT. GEN. BERNARD TRAINOR: I have no idea. I mean, there was a moral and a legal obligation to pursue this to its conclusion.

TERENCE SMITH: If that was the obligation then, what is the obligation now?

LT. GEN. BERNARD TRAINOR: It remains exactly the same. Time has nothing to do with it.

TERENCE SMITH: Ten days after the publication of the series, the Pentagon announced that it would conduct a review of the old investigation, but would not formally reopen it. The review is ongoing. But the decision when or even whether to publish the series and its explosive findings was not an easy one. Kurt Franck, the paper's managing editor, says another war, in Iraq, weighed on their minds.

KURT FRANCK: Here we are bringing up, dredging up a war that no one was in favor of, that took place in the '60s and '70s, at a time when the United States was at war with Iraq. Well, we knew we would be criticized but we could not sit on it. If we sat on this story, we'd be party of a cover-up as well.

TERENCE SMITH: When the tiger force series hit the street, it evoked powerful reactions from readers, especially from Vietnam veterans. But perhaps because it was published here, in the 150,000- daily-circulation "Toledo Blade," it got little immediate attention from many of the nation's large news organizations. An Associated Press story detailing the "Blade's" account ran the day after the first installment of the series in a handful of papers. Among them: The "Washington Post," "Philadelphia Inquirer," "Miami Herald" and the "Blade's" sister paper, the "Pittsburgh Post Gazette." No further reporting of the story was done in those accounts. One paper, arguably the most important in the country, did not run the AP story: The "New York Times."

DAN OKRENT: They didn't run it when they learned about it.

TERENCE SMITH: Dan Okrent is the "Times'" public editor. He criticized the paper in his twice-monthly column for its reluctance to cover the story when it broke. Okrent stresses that he speaks only for himself and that his opinions do not reflect those of the "Times" management.

DAN OKRENT: I think the predominant reason was this wasn't something the "Times" had developed on their own. And there's an instinctive "not invented here" feeling that I think exists throughout the news media. We want to put our name on it.

TERENCE SMITH: Who suffers from this?

DAN OKRENT: Readers. Readers. You have, you know, a certain sort of competitive feeling and sometimes combative feeling toward the competition. That's not a bad thing except, I believe, when it interferes with what your primary obligation is, which is to inform your readers no matter where the story comes from.

TERENCE SMITH: Both Okrent and the "Blade" staff credit Seymour Hersh of the "New Yorker" with putting the story on the map. Hersh, who won a Pulitzer Prize in 1970 for his reporting on the 1968 massacre at Mai Lai, blasted the "Times," among others, for ignoring the story. Mitch Weiss:

MITCH WEISS: If it wasn't for Seymour Hersh's article, it would have been completely ignored and would have faded off the radar. It would have been the "New York Times" or the "Washington Post." It would have been splashed across front pages all over the country. You would have had ABC, NBC, CBS...

SPOKESMAN: But the tiger force case was kept secret...

TERENCE SMITH: ABC news did pick up the story for an edition of "Nightline" and for two shorter stories on "World News Tonight." NBC and CBS News have not aired anything on the tiger force, nor has the NewsHour. Dan Okrent says the "Times" ordered up a story after the "New Yorker" piece ran. The "Times'" top editor, Bill Keller, who declined to speak to the NewsHour, told Okrent that if the "Times" had developed the story, he'd have put it on the front page.

DAN OKRENT: By the time you do something after the fact, there's something in the newsman's code that says, "well, we can't just say this is what they said; we have to add something to it."

TERENCE SMITH: "Times" reporter John Kifner was assigned to do the adding. In a December 28th story he confirmed the "Blade's" account but quoted experts who said that tiger force's atrocities, while horrific, were not unique. That didn't sit well at the "Blade."

MITCH WEISS: Well, the reality is that Vietnam was not one big atrocity. We're talking about specifics,

specific instances of atrocities. And then by the "New York Times," you know, saying, "well, Vietnam was one big atrocity," it diminished, I think, the work and diminished the importance of the work.

TERENCE SMITH: A judgment about that work will be made by the Pulitzer Prize committee next week.

RECAP

JIM LEHRER: Again, the major developments of this day: U.S. employers added 308,000 new jobs in March, with job gains in nearly all major categories. The judge declared a mistrial in the Tyco case after 11 days of jury deliberations. He cited intense outside pressure on one juror. And a leading Sunni cleric in Iraq denounced the mutilation of four dead American contract workers, but did not condemn the killing.

JIM LEHRER: And again, to our honor roll of American service personnel killed in Iraq. We add them as their deaths are made official and photographs become available. Here, in silence, are nine more. "Washington Week" can be seen on most PBS stations later this evening. We'll see you online and again here Monday evening. Have a nice weekend. I'm Jim Lehrer. Thank you and good night.