PBS NewsHour; May 10, 2011 3:00pm-4:00pm PDT

Captioning sponsored by MacNEIL/LEHRER PRODUCTIONS

>> Woodruff: WORRIES OF MORE FLOODING MOVED DOWNSTREAM AFTER THE MISSISSIPPI RIVER CRESTED AT NEAR RECORD LEVELS IN MEMPHIS. GOOD EVENING. I'M JUDY WOODRUFF.

>> Brown: AND I'M JEFFREY BROWN. ON THE NEWSHOUR TONIGHT, WE HAVE THE LATEST ON THE DAMAGE AND THE LONG CLEANUP AHEAD.

>> Woodruff: THEN RAY SUAREZ UPDATES THE STATE OF IMMIGRATION REFORM, AS PRESIDENT OBAMA REVIVES HIS CASE FOR AN OVERHAUL OF THE NATION'S LAWS.

>> Brown: KWAME HOLMAN REPORTS ON THE POLITICS OF THE DEBATE OVER HOW MUCH THE FEDERAL GOVERNMENT CAN BORROW, AFTER SPEAKER BOEHNER OFFERED HIS OPENING BID.

>> WITHOUT SIGNIFICANT SPENDING CUTS AND CHANGES IN THE WAY WE SPEND THE AMERICAN PEOPLE'S MONEY, THERE WILL BE NO INCREASE IN THE DEBT LIMIT.

>> Woodruff: WE GET TWO VIEWS OF THE OBAMA ADMINISTRATION'S STEPPED-UP CRITICISM OF CHINA'S HUMAN RIGHTS RECORD.

>> Brown: FROM UKRAINE, SPECIAL CORRESPONDENT KIRA KAY EXPLORES LESSONS BEING LEARNED ABOUT FULFILLING THE PROMISES OF THE 2004 REVOLUTION.

>> FROM THE FAILINGS OF THE ORANGE GOVERNMENT AND THE SUBSEQUENT RETURN OF AUTHORITARIAN CONCERNS COMES A WARNING FOR CURRENT ACTIVISTS IN THE MIDDLE EAST. DEMOCRACY BUILDING IS HARDER THAN IT LOOKS.

>> Woodruff: AND WE GET THE DETAILS OF THE MICROSOFT DEAL TO BUY SKYPE FOR $8.5 BILLION. THAT'S ALL AHEAD ON TONIGHT'S NEWSHOUR. MAJOR FUNDING FOR THE PBS NEWSHOUR HAS BEEN PROVIDED BY:

>> OIL COMPANIES MAKE HUGE PROFITS.

>> LAST YEAR, CHEVRON MADE A LOT OF MONEY.

>> WHERE DOES IT GO?

>> EVERY PENNY AND MORE WENT INTO BRINGING ENERGY TO THE WORLD.

>> THE ECONOMY IS TOUGH RIGHT NOW, EVERYWHERE.

>> WE PUMPED $21 MILLION INTO LOCAL ECONOMIES, INTO SMALL BUSINESSES, COMMUNITIES, EQUIPMENT, MATERIALS.

>> THAT MONEY COULD MAKE A BIG DIFFERENCE TO A LOT OF PEOPLE.

>> MOVING OUR ECONOMY FOR 160 YEARS. BNSF, THE ENGINE THAT CONNECTS US. PACIFIC LIFE-- THE POWER TO HELP YOU SUCCEED. INTEL, SPONSORS OF TOMORROW. AND THE WILLIAM AND FLORA HEWLETT FOUNDATION, WORKING TO SOLVE SOCIAL AND ENVIRONMENTAL PROBLEMS AT HOME AND AROUND THE WORLD. AND WITH THE ONGOING SUPPORT OF THESE INSTITUTIONS AND FOUNDATIONS. AND... THIS PROGRAM WAS MADE POSSIBLE BY THE CORPORATION FOR PUBLIC BROADCASTING. AND BY CONTRIBUTIONS TO YOUR PBS STATION FROM VIEWERS LIKE YOU. THANK YOU.

>> Brown: THE FLOOD TIDE ON THE MISSISSIPPI RIVER TOPPED OUT EARLY TODAY IN MEMPHIS, TENNESSEE, AT NEARLY 48 FEET, JUST SHY OF AN ALL-TIME RECORD. BUT IT WAS HARDLY THE END OF THE STORY, BOTH FOR MEMPHIS AND OTHER TOWNS AND CITIES DOWN THE LONG REACH OF THE RIVER. WATER, WATER, EVERYWHERE. THE MIGHTY MISSISSIPPI MORE THAN LIVED UP TO ITS NICKNAME. SWELLING TWO-AND-A-HALF MILES BEYOND ITS BANKS AND INUNDATING AREAS AROUND MEMPHIS. BUT OFFICIALS SAID IT APPEARED THE LEVY SYSTEM WAS HOLDING AND CITY'S MAJOR LANDMARKS WOULD BE SPARED.

>> WE'LL WAIT UNTIL THE WATER GOES DOWN A WHOLE LOT MORE. THEN WE'LL CELEBRATE SUCCESS.

>> Brown: PART OF THE SUCCESS CAME AT ELVIS PRESLEY'S FORMER ESTATE GRACELAND, ONE OF THE MOST VISITED ATTRACTIONS IN MEMPHIS. IT SITS ON HIGH GROUND AND SO ESCAPES THE WORST.

>> GRACELAND IS SAFE. AND WE WOULD CHARGE HELL WITH A WATER PISTOL IN ORDER TO KEEP IT THAT WAY. I WOULD BE WILLING TO LEAD THE CHARGE SNEEF PRESIDENT OBAMA DECLARED FIVE COUNTIES DISASTER AREAS MAKING THEM ELIGIBLE FOR FEDERAL DISASTER AID. OFFICIALS WARNED THAT EVEN IF THE RIVER HAS CRESTED IN MEMPHIS AND ITS SURROUNDINGS IT WILL BE WEEKS BEFORE ALL THE WATER IS GONE. THE FLOOD TIDE HAS BUILT STEADILY IN RECENT WEEKS. SNOWY WINTER TO THE NORTH MEANT SUBSTANTIAL SPRING SNOW MELT. AND COMBINED WITH HEAVY RAIN, THE MISSISSIPPI AND ITS TRIBUTARIES HAD NOWHERE TO GO BUT OVER THEIR BANKS. ALONG WITH THE DANGER OF RISING WATER CAME DANGERS IN THE WATER. BACTERIA, CHEMICALS, EVEN WATER SNAKES. IN PARTICULAR THE POISONOUS WATER MOCK SIN. THOSE DANGERS AND MORE FACED A SERIES OF TOWNS SOUTH OF MEMPHIS. THE ENTIRE RIVERSIDE TOWN OF TUNICA MISSISSIPPI WAS ALREADY UNDERWATER. ONLY THE TOPS OF HOUSES COULD BE SEEN. FARTHER DOWN RIVER, WILLIAM JEFFERSON IN VICKSBURG, MISSISSIPPI, HAD A PLAN TO KEEP THE WATER IN FRONT OF HIM.

>> AS LONG AS I COULD GET OUT, GET MORE THAN MY FEET WET, I JUST MOVED OVER TO THE NEXT FIELD. WHEN IT GET THERE, I MOVED TO THE NEXT ONE.

>> Brown: DESPITE THE FLOODING AT VICKSBURG THE NATIONAL MILITARY PARK WHERE THOUSANDS OF CIVIL WAR SOLDIERS WERE BURIED WAS EXPECTED TO REMAIN DRY. THE NATIONAL WEATHER SERVICE PROJECTED THE RIVER WON'T CREST AT VICKSBURG UNTIL MAY 19. AT BATON ROUGE LOUISIANA ON MAY 23. RECORDS THAT GO BACK MORE THAN 80 YEARS ARE EXPECTED TO BE BROKEN. THE U.S. ARMY CORPS OF ENGINEERS HAD ALREADY OPENED A SPILL WAY TO EASE PRESSURE ON THE LEVEES OF NEW ORLEANS. THE WATER WAS BEING DIVERTED INTO LAKE PONCHARTRAIN.

>> WE'VE ALL LIVED THROUGH KATRINA. WE'VE SEEN SYSTEMS THAT WERE SUPPOSED TO WORK THAT DIDN'T WORK. IT'S GOOD TO GET READY FOR THAT AND IS RESPONSIBLE TO GET READY FOR THAT.

>> Brown: THE ARMY CORPS HAS SOUGHT PERMISSION TO OPEN A SECOND SPILL WAY, THIS ONE NORTH OF BATON ROUGE, FOR THE FIRST TIME SINCE 1973.

>> Woodruff: STILL TO COME ON THE NEWSHOUR, A RENEWED PUSH ON IMMIGRATION REFORM; THE POLITICS OF THE DEBT CEILING; CHINA'S HUMAN RIGHTS RECORD; UKRAINE'S ORANGE REVOLUTION NEARLY EIGHT YEARS LATER; AND THE MICROSOFT- SKYPE DEAL. BUT FIRST, THE OTHER NEWS OF THE DAY. HERE'S HARI SREENIVASAN.

>> Sreenivasan: THE HEAVIEST BOMBING IN WEEKS STRUCK THE CAPITAL OF LIBYA TODAY. NATO SAID ITS WARPLANES ATTACKED A COMMAND CENTER IN DOWNTOWN TRIPOLI IN A PREDAWN RAID. LATER, LIBYAN OFFICIALS ESCORTED JOURNALISTS TO ONE OF THE SITES. THE OFFICIALS SAID IT WAS HOME TO A COMMISSION FOR WOMEN AND CHILDREN, AND OFFICES OF PARLIAMENTARY STAFF. IN NAPLES, ITALY, A NATO SPOKESMAN DEFENDED THE ATTACKS, AND REJECTED THE LIBYAN CLAIMS. NATO TARGETS ARE MILITARY TARGETS WHICH MEANS THAT THE TARGETS WE'VE BEEN HITTING ARE COMMAND-AND-CONTROL BUNKERS. AND AGAIN JUST TO MAKE CLEAR NATO IS NOT TARGETING INDIVIDUALS. IT'S NOT IN OUR MANDATE. OUR MANDATE IS TO PROTECT CIVILIAN POPULATION FROM ATTACKS OR FROM THE THREAT OF ATTACKS BY KA... QADDAFI REGIME FORCES.

>> Sreenivasan: ALSO TODAY, REBEL FORCES REPORTED NEW GAINS NEAR THE WESTERN PORT CITY OF MISRATA. THEY CLAIMED THEY ADVANCED ABOUT 15 MILES OUTWARD FROM THE CITY CENTER. MISRATA HAS BEEN UNDER SIEGE BY MOAMMAR QADDAFI'S FORCES FOR WEEKS. SYRIAN TROOPS, BACKED BY TANKS, MOVED INTO MORE TOWNS TODAY, EXTENDING THE GOVERNMENT CRACKDOWN. WITNESSES REPORTED HEAVY GUNFIRE IN AT LEAST FIVE VILLAGES NEAR DARAA. THE EMBATTLED CITY HAS BEEN AT THE CENTER OF THE SYRIAN UPRISING. MEANWHILE, NEW AMATEUR VIDEO SHOWED PROTESTERS IN SEVERAL CITIES BEING FIRED ON THIS WEEK. AND ACTIVISTS SAID THE MILITARY IS METHODICALLY SEALING OFF ANY PLACE WHERE THERE HAS BEEN UNREST. IN PAKISTAN, INTELLIGENCE OFFICIALS SAID A U.S. DRONE AIRCRAFT STRIKE KILLED AT LEAST THREE ALLEGED MILITANTS. IT WAS THE SECOND SUCH ATTACK SINCE THE U.S. RAID THAT KILLED OSAMA BIN LADEN. IN TODAY'S INCIDENT, THE PAKISTANIS SAID TWO MISSILES HIT A VEHICLE IN SOUTH WAZIRISTAN, NEAR THE BORDER WITH AFGHANISTAN. JAPAN WILL SCALE BACK RELIANCE ON NUCLEAR POWER IN THE WAKE OF THE MARCH EARTHQUAKE AND TSUNAMI. COMMERCIAL NUCLEAR PLANTS NOW SUPPLY NEARLY A THIRD OF JAPAN'S ELECTRICITY, AND THAT FIGURE WAS ON TRACK TO RISE TO 50% BY 2030. BUT PRIME MINISTER NAOTO KAN SAID TODAY THE FOCUS WILL SHIFT INSTEAD TO ALTERNATIVE SOURCES AND CONSERVATION.

>> FOLLOWING THE MAJOR ACCIDENT, WE WILL SCRAP THE ENERGY POLICY AND START FROM SCRATCH. WE WILL THOROUGHLY ENSURE SAFETY FOR NUCLEAR POWER GENERATION AND MAKE EFFORTS TO FURTHER PROMOTE RENEWABLE ENERGY.

>> Sreenivasan: THE FUKUSHIMA DAI-ICHI NUCLEAR POWER PLANT WAS BADLY DAMAGED IN THE MARCH DISASTER. IT LEAKED RADIATION OVER A WIDE AREA, AND 80,000 PEOPLE HAD TO LEAVE A 12-MILE EXCLUSION ZONE. A FEDERAL APPEALS COURT IN SAN FRANCISCO ISSUED A SHARP REBUKE TO THE U.S. VETERANS AFFAIRS DEPARTMENT TODAY. THE COURT ACCUSED THE V.A. OF "UNCHECKED INCOMPETENCE" IN HANDLING POST-TRAUMATIC STRESS DISORDER AND OTHER CONDITIONS. IT ORDERED THE V.A. TO WORK OUT A NEW MENTAL HEALTH CARE PLAN WITH TWO VETERANS GROUPS THAT BROUGHT SUIT. THE RULING WAS UNANIMOUS. IN ECONOMIC NEWS, GENERAL MOTORS ANNOUNCED IT'S ADDING SOME 4,000 JOBS AT 17 U.S. PLANTS. THE COMPANY SAID IT WILL HIRE NEW EMPLOYEES AND CALL BACK HUNDREDS OF FURLOUGHED WORKERS OVER THE NEXT YEAR AND A HALF. AND WALL STREET MADE SOME ADDITIONS OF ITS OWN. THE DOW JONES INDUSTRIAL AVERAGE GAINED 75 POINTS TO CLOSE AT 12,760. THE NASDAQ ROSE 28 POINTS TO CLOSE NEAR 2872. THOSE ARE SOME OF THE DAY'S MAJOR STORIES. NOW, BACK TO JUDY.

>> Woodruff: PRESIDENT OBAMA HEADED FOR THE U.S.-MEXICAN BORDER TODAY TO LAUNCH A PUBLIC CAMPAIGN FOR IMMIGRATION REFORM. RAY SUAREZ HAS THE STORY.

>> Suarez: WE ARE JOINED NOW BY TWO SENIOR CORRESPONDENTS FOR "FRONTERAS: THE CHANGING AMERICA DESK," A NETWORK OF PUBLIC RADIO

>> IN EMBRACING AMERICA YOU CAN BECOME AMERICAN. THAT IS WHAT MAKES THIS COUNTRY GREAT AND ENRICHES ALL OF US.

>> Suarez: AN ESTIMATED 11 MILLION UNDOCUMENTED IMMIGRANTS NOW LIVE IN THE U.S. AND THE PRESIDENT SAID IT MADE SENSE TO OFFER THEM A PATH TO CITIZENSHIP. IN ADDITION TO SECURING THE BORDERS. AND HE CHALLENGED REPUBLICANS TO JOIN HIM.

>> WE HAVE GONE ABOVE AND BEYOND WHAT WAS REQUESTED BY THE VERY REPUBLICANS WHO SAID THEY SUPPORTED BROADER REFORM AS LONG AS WE GOT SERIOUS ABOUT ENFORCEMENT. ALL THE STUFF THEY ASKED FOR, WE'VE DONE. BUT EVEN THOUGH WE'VE ANSWERED THESE CONCERNS, I'VE GOT TO SAY I SUSPECT THERE'S STILL GOING TO BE SOME WHO ARE TRYING TO MOVE THE GOAL POST ON US ONE MORE TIME. MAYBE NEED A MOAT. MAYBE THEY'LL WANT ALLIGATORS IN THE MOAT.ab THEY'LL NEVER BE SATISFIED.

>> Suarez: REPUBLICANS CHARGED TODAY THE PRESIDENT IS ONLY NOW RESURRECTING IMMIGRATION TO WIN HISPANIC VOTERS IN THE 2012 ELECTIONS. TEXAS SENATOR JOHN CORNYN.

>> HERE WE GO AGAIN. ANOTHER SPEECH. ANOTHER MEETING AND NO LEADERSHIP FROM THE PRESIDENT ON IMMIGRATION REFORM. BUT TO ECHO GENERAL DAVID PETRAEUS, HE SAID, WHEN HE WAS TALKING ABOUT IRAQ, HE SAID IT'S HARD BUT NOT HOPELESS. IF THE PRESIDENT WOULD SHOW SOME LEADERSHIP ON THE ISSUE OF CREDIB,s1F IMMIGRATION REFORM STARTING WITH BORDER SECURITY HE WOULD FIND A WILLING PARTNER AMONG REPUBLICANS TO DO WHAT WE KNOW WE NEED TO DO BUT WE CANNOT DO WITHOUT OURSELVES AND WITHOUT PRESIDENTIAL LEADERSHIP.

>> Suarez: FOR NOW REPUBLICANS HAVE SHOWN LITTLE INTEREST IN CITIZENSHIP MEASURES. INSTEAD THE EXPLOSION OF VIOLENCE IN MEXICO'S DRUG WAR HAS SHIFTED THE EMPHASIS TO BORDER SECURITY. ARIZONA'S U.S. SENATORS JOHN McCAIN AND JON KYL HAVE INTRODUCED BORDER SECURITY LEGISLATION AND LAST WEEK McCAIN CHALLENGED JANET NAPOLITANO, THE HOMELAND SECURITY SECRETARY. SHE'S A FORMER DEMOCRATIC GOVERNOR OF ARIZONA.

>> WE HAVE NEVER HAD ON YOUR PART OR THE PART OF THE ADMINISTRATION A SERIOUS SIT- DOWN NEGOTIATIONS ON THIS ISSUE.

>> THERE'S NO ONE WHO HAS SPENT MORE TIME WORKING ON THIS ARIZONA ISSUE THAN I HAVE OVER THE PAST TWO YEARS. WE WILL CONTINUE....

>> THERE'S NO ONE THAT SPENT MORE TIME ON THE ISSUE THAN I HAVE, MADAM SECRETARY.

>> WE CONTINUE....

>> LONG BEFORE YOU WERE GOVERNOR AND LONG BEFORE YOU WERE SECRETARY.

>> Suarez: THE LAST ATTEMPT TO PASS MAJOR IMMIGRATION REFORM DIED IN 2007. AFTER CONCERTED EFFORTS BY PRESIDENT BUSH RAN INTO REPUBLICAN OBJECTIONS. A YEAR EARLIER NATIONWIDE PROTESTS BY LATINO GROUPS HAD PUSHED THE ISSUE TO THE FOREFRONT. THEN CANDIDATE OBAMA REPEATEDLY SPOKE TO THE ISSUE DURING THE 2008 CAMPAIGN.

>> I WILL MAKE IT A TOP PRIORITY IN MY FIRST YEAR AS PRESIDENT.

>> Suarez: THE GREAT RECESSION AND THE LONG BATTLE OVER HEALTH CARE REFORM SUPPLANTED THAT PLAN. IMMIGRATION WAS RELEGATED TO MENTIONS DURING STATE OF THE UNION ADDRESSES.

>> AND WE SHOULD CONTINUE THE WORK OF FIXING OUR BROKEN IMMIGRATION SYSTEM, TO SECURE OUR BORDERS AND ENFORCE OUR LAWS AND ADDRESS THE MILLIONS OF UNDOCUMENTED WORKERS WHO ARE NOW LIVING IN THE SHADOWS. ( APPLAUSE ) I KNOW THAT DEBATE WILL BE DIFFICULT. I KNOW IT WILL TAKE TIME.

>> Suarez: STILL CONCRETE LEGISLATIVE ACTION HAS LANGUISHED. THE SO-CALLED DREAM ACT PASSED THE HOUSE LAST YEAR. BUT DIED AMID SENATE REPUBLICAN FILIBUSTERS. IT WOULD HAVE PAVED A PATH TO CITIZENSHIP FOR UNDOCUMENTED IMMIGRANTS BROUGHT TO THE U.S. AS CHILDREN. BUT WHITE HOUSE OFFICIALS SAY THE ADMINISTRATION HAS A RECORD OF ACCOMPLISHMENT AROUND THIS ISSUE IN ITS FIRST TWO YEARS IN OFFICE. THEY SAY FEWER UNDOCUMENTED WORKERS ARE CROSSING INTO THE U.S., ALTHOUGH THAT'S PARTLY DUE TO THE WEAK ECONOMY, AND DEPORTATIONS HAVE GREATLY INCREASED FOCUSING MOSTLY ON CRIMINALS FOUND TO BE LIVING IN THE U.S. IN THE MEANTIME, STATES ALONG THE BORDER AND ELSEWHERE HAVE BEGUN ACTING ON THEIR OWN. ARIZONA GOVERNOR JAN BREWER SIGNED A LAW LAST YEAR TO MANDATE IMMIGRATION CHECKS FOR PEOPLE QUESTIONED ON OTHER CHARGES. PARTS OF THE LAW ARE ON COURT- ORDERED HOLD. A FEDERAL JUDGE BLOCKED A SIMILAR LAW IN UTAH TODAY, AND TEXAS LEGISLATORS VOTED LAST NIGHT TO REQUIRE THAT POLICE GIVE IMMIGRATION OFFENSES THE SAME PRIORITY AS THEY DO OTHER CRIMES.

>> Suarez: WE ARE JOINED NOW BY TWO SENIOR CORRESPONDENTS FOR "FRONTERAS: THE CHANGING AMERICA DESK," A NETWORK OF PUBLIC RADIO STATIONS ACROSS THE SOUTHWEST FOCUSING ON IMMIGRATION AND BORDER ISSUES. HERNAN ROZEMBERG IS REPORTING FROM SAN ANTONIO, TEXAS. MICHEL MARIZCO IS IN TUCSON, ARIZONA. HERNAN, LET ME START WITH YOU. AS WE MENTIONED EARLIER THE PRESIDENT PROMISED THE REFORM PACKAGE EARLY IN HIS TERM. THE TERM'S NOW MORE THAN HALF OVER. IS THERE ANY PROPOSAL ON THE DESK? WHERE DOES THAT EFFORT STAND? IS THERE ENOUGH TIME IN WHAT REMAINS OF HIS TERM?

>> I DON'T THINK SO. UNDER THE CURRENT SITUATION, UNDER THE CURRENT REPUBLICAN LEADERSHIP, I THINK THAT IT'S ALL BECOME A POLITICAL FOOTBALL. BEING TOSSED FROM ONE PARTY TO THE OTHER TO SEE WHO IS GOING TO SCORE THE NEXT TOUCHDOWN. BUT IN THE END THIS GAME IS NOT GOING TO BE WON BY EITHER PARTY.

>> Suarez: LET'S GO TO YOU NEXT MICHELLE. TODAY THE PRESIDENT INSISTED DOWN ON THE BORDER IN EL PASO THAT, IN FACT, HE HAS DONE WHAT REPUBLICAN LEADERSHIP HAS ASKED HIM TO DO. WHEN YOU LOOK AT THE CLAIMS FOR BORDER SECURITY, FOR THE FENCE WHICH TODAY HE CLAIMED WAS COMPLETE, DOES THAT POINT STAND UP TO SOME SCRUTINY IN?

>> IT'S DEFINITELY WORTH CONSIDERING SOME DIFFERENT ISSUES. IN 2004 PRESIDENT BUSH HAD DECLARED THAT THE BORDER WAS BROKEN. PRESIDENT OBAMA HAS TAKEN A STEP BACK FROM THE BORDER. HE'S SAYING THAT THE IMMIGRATION SYSTEM IS BROKEN. WHEN YOU LOOK AT THESE SPECIFICS ALONG THE BORDER, THE GOVERNMENT ACCOUNTABILITY OFFICE THIS PAST WINTER SAID THAT LESS THAN 1120 MILES OF THE BORDER WERE UNDER SOME SORT OF DESIRED CONTROL. JANET NAPOLITANO AND COMMISSIONER ALAN BERSON HAVE BEEN TAKING THE SHOW ON THE ROAD SAYING THAT THE BORDER'S MORE SECURE THAN EVER. THERE ARE RESIDENTS ALONG THE BORDER AND WITHIN THE INTERIOR, NORTH TEXAS NEAR DALLAS, PHOENIX, WHO MIGHT HAVE AN ISSUE WITH THAT. HOME INVASIONS, DRUG ASSASSINATIONS, SOME DIFFERENT ISSUES HAVE STILL ARISEN MUCH THE SAME AS THEY HAVE IN THE PAST.

>> Suarez: BUT, HERNAN, THE PRESIDENT CITED F.B.I. STATISTICS THAT SHOW BIG BORDER METROPOLISS, SAN DIEGO, TUCSON, PHOENIX, EL PASO, ARE SAFER THAN THEY'VE BEEN IN A LONG TIME. HAS HE GOT SOMETHING THERE?

>> WELL, THAT BRINGS UP THE WHOLE ISSUE OF SPILLOVER EFFECT OR SPILLOVER VIOLENCE THAT AGAIN HAS BECOME A POLITICAL ISSUE. IT'S REALLY HARD TO DECIPHER HOW MUCH SPILLOVER VIOLENCE THERE HAS BEEN. THERE'S NO DOUBT THAT THE INCREASE IN VIOLENCE IN MEXICAN-BORDER CITIES HAS HAD SOME KIND OF IMPACT ON THE U.S. SIDE BUT IT'S STARKLY DIFFERENT WHEN YOU GO FROM THE U.S. CITY INTO THE MEXICAN CITY. I MEAN, AS YOU WERE SAYING, EL PASO HAS BEEN CITED OFTENTIMES AS BEING ONE OF THE SAFEST CITIES IN THE U.S., AND THERE IT IS RIGHT ACROSS FROM THE MOST DEADLY IN THE WORLD AT THE MOMENT.

>> Suarez: WHAT KINDS OF SPILLOVER EFFECTS? THE PRESIDENT WAS IN EL PASO TODAY. WHAT ARE THE KINDS OF THINGS YOU SEE THERE RIGHT NEXT TO ONE OF THE MOST DANGEROUS CITIES IN MEXICO?

>> WELL, IT'S PRETTY WELL DOCUMENTED THAT THE DRUG CARTELS HAVE A PRETTY STRONG PRECEDENT IN THE... PRESENCE IN THE U.S. NOW NOT JUST IN BORDER STATES BUT THROUGHOUT THE COUNTRY. ALONG U.S.-BORDER CITIES IN SOME YOU HAVE SEEN AN INCREASE IN VIOLENCE, HOMICIDES, FOR EXAMPLE, THAT ARE SUPPOSED TO BE RELATED TO DRUG VIOLENCE. AND YOU ALSO SEE THE INCREASED INFILTRATION OF GANGS, FOR EXAMPLE, SUCH AS ONE WHICH AS THE MEXICAN DRUG CARTELS HAVE SEEN A VERY MONEY-MAKING BUSINESS IN SMUGGLING IMMIGRANTS SO THEY'VE JUMPED ON THAT AS WELL. BUT ALONG WITH THAT IT BECOME A LOT OF COMPETITION BETWEEN THE CAR CARTELS AND GANGS. THEY'RE TAKING ANYBODY OUT WHO IS STANDING IN BETWEEN THESE DAYS.

>> Suarez: A LOT OF NUMBERS ARE THROWN BACK AND FORTH ABOUT THE SUCCESS OF FEDERAL EFFORTS DOWN ON THE BORDER. DO WE KNOW WHETHER YOU'RE MORE LIKELY TO BE FOUND OR CAUGHT IF YOU TRY TO CROSS AND MORE LIKELY TO BE SENT HOME IF YOU ARE CAUGHT?

>> IT'S REALLY TRICKY. DEPORTATIONS HAVE INCREASED PARTICULARLY THE FOCUS ON CRIMINAL IMMIGRANTS WHO HAVE COMMITTED... BREAKING THE LAW OTHER THAN CROSSING THE BORDER ILLEGALLY. AT THE SAME TIME APPREHENSIONS HAVE DROPPED DOWN TO LESS THAN THERE WERE IN, SAY, 2006, 2005. AND WHEN YOU LOOK AT SOME OF THE APPREHENSION NUMBERS, THERE HAS BEEN SOME QUESTION. THERE'S A LOCAL SHERIFF HERE IN ARIZONA WHO HAS BEEN STATING THAT THE BORDER PATROL HAS HAD A POLICY OF TRYING TO REDUCE APPREHENSIONS BY TURNING MIGRANTS BACK SOUTH INSTEAD OF TURNING THEM INTO THE FEDERAL COURT SYSTEM FOR DEPORTATION. OVERALL, APPREHENSIONS HAVE DROPPED AND THERE HAS BEEN A FAIR ASSUMPTION THAT ILLEGAL IMMIGRATION INTO THE COUNTRY HAS DROPPED. NOW WHETHER OR NOT THAT IS BECAUSE OF AN INCREASE IN BORDER SECURITY OR BECAUSE OF THE ECONOMY AND BECAUSE PERHAPS OF CERTAIN LAWS THAT HAVE BEEN PASSED IN ARIZONA'S 1070 AND SOME OF THE OTHER UNFAVORABLE LAWS AGAINST ILLEGAL IMMIGRANTS THAT ARE BEING TAKEN UP BY THE STATES, THAT REMAINS TO BE SEEN. RIGHT THERE THERE'S NO CLEAR ANSWER. IT DOES APPEAR THAT NAPOLITANO AND THE PRESIDENT HAVE BEEN TRYING TO TAKE THE CREDIT FOR IT AS A RESULT OF STEEPED-UP BORDER SECURITY.

>> Suarez: ON THE NUMBER THAT'S OFTEN USED TO CAPTURE THE NUMBER OF PEOPLE LIVING IN THE COUNTRY ILLEGALLY HAS DROPPED FROM 12 MILLION, SORT OF THE CONSENSUS FIGURE, TO 11 MILLION. ARE THOSE PEOPLE WHO WERE SENT HOME OR PEOPLE WHO SENT THEMSELVES HOME?

>> WELL, IT'S KIND OF HARD TO TELL AS THE LEADING RESEARCHER THAT USUALLY COMES UP WITH THOSE NUMBERS, THE HISPANIC CENTER WILL TELL YOU I THINK THERE HAS BEEN AN ESTABLISHED PATTERN NOW THAT DUE TO SOME OF THE FACTORS THAT MY COLLEAGUE JUST CITED, THE CYCLICAL... THE CYCLE RATHER OF FOLKS GOING BACK AND FORTH THAT THEY USED TO DO YEARS AGO HAS PRETTY MUCH ENDED. YOU KNOW, FOLKS DON'T EVEN GO BACK HOME TO VISIT FAMILIES ANYMORE THE WAY THEY USED TO. THEY ASSUME IF THEY MAKE IT HERE SAFELY THEY MIGHT AS WELL STAY PUT AND RIDE IT OUT AS LONG AS THEY CAN BUT IT'S REALLY HARD TO DECIPHER, YOU KNOW, THE PRECISE NUMBER. ONE STUDY I THINK CITED AS MANYs 20 MILLION. NO ONE WILL KNOW FOR SURE BUT NO DOUBT IT'S A HUGE POPULATION. THEY'RE JUST SITTING THERE WITHOUT NEW LEGISLATION TO HAVE DONE SOMETHING TO CHANGE THEIR STATUS.

>> Suarez: QUICKLY BEFORE WE GO, SB-1070 HAS JUST PASSED ITS ONE-YEAR MARK. A LOT OF THE LAW HASN'T BEEN IMPLEMENTS BECAUSE OF A FEDERAL COURT INJUX,... INJUNCTION. BUT WHAT HAS OPINION IN ARIZONA CONCLUDED ABOUT SB-1070 NOW THAT IT'S BEEN ON THE BOOKS FOR A YEAR.

>> UNIVERSITY OF THE MAJOR POINTS THAT PEOPLE BRING UP IS THE AMOUNT OF BOYCOTTS THAT OBSTRUCT THE STATE AS A RESULT OF 1070. WHEN YOU LOOK AT SOME OF THE NUMBERS, FOR EXAMPLE, IN THE MEXICAN STATE OF SONORA WHICH BORDERS ARIZONA THERE'S ACTUALLY A PROGRAM FOR STUDENTS WHO... WHOSE FAMILY LEFT ARIZONA AND THE U.S. TO GO BACK TO MEXICO TO TRY TO REINTEGRATE THERE BECAUSE OF POLITICAL AND ECONOMIC CLIMATE THERE. WHEN YOU LOOK AT SOME OF THE DIFFERENT SATISFACTION LEVELS THAT PEOPLE HAVE HAD WITH 1070, MUCH OF IT IS PSYCHOLOGICAL. MUCH OF IT, AS YOU SAID, YOU KNOW, IT HAS NOT BEEN IN FORCE IN ACTUALITY BUT THE THREAT OF IT IS ALWAYS THERE. CLEARLY SINCE WE SAW YESTERDAY WITH THE GOVERNOR TRYING TO ASK THE SUPREME COURT TO TAKE UP THE ISSUE TO LIFT THE INJUNCTION AGAINST 1070 THIS IS NOT GOING AWAY.

>> Suarez: THANK YOU BOTH.

>> THANK YOU.

>> THANK YOU FOR HAVING US.

>> Brown: AND WE GO NEXT TO THE ONGOING POLITICAL BATTLE OVER THE NATION'S BUDGET DEFICIT. HOUSE SPEAKER JOHN BOEHNER HAS NOW UNVEILED WHAT HE HOPES FOR IN A FINAL DEAL ON SPENDING CUTS. NEWSHOUR CONGRESSIONAL CORRESPONDENT KWAME HOLMAN REPORTS.

>> Reporter: THE DEBT DEBATE IN WASHINGTON HEATED UP AGAIN WITH THE FEDERAL GOVERNMENT SET TO HIT ITS LEGAL LIMIT ON BORROWING IN LESS THAN A WEEK. HOUSE SPEAKER JOHN BOEHNER LAID OUT HIS CONDITIONS FOR RAISING THE DEBT KREELING IN A SPEECH LAST NIGHT IN NEW YORK.

>> LET ME BE AS CLEAR AS I CAN BE. WITHOUT SIGNIFICANT SPENDING CUTS AND CHANGES IN THE WAY WE SPEND THE AMERICAN PEOPLE'S MONEY, THERE WILL BE NO INCREASE IN THE DEBT LIMIT. AND THE CUTS SHOULD BE GREATER THAN THE ACCOMPANYING INCREASE IN THE DEBT LIMIT THAT THE PRESIDENT HAS GIVEN. WE'RE NOT TALKING ABOUT BILLIONS HERE. WE SHOULD BE TALKING ABOUT CUTS IN TRILLIONS IF WE'RE SERIOUS ABOUT ADDRESSING AMERICA'S FISCAL PROBLEMS.

>> Reporter: THE GOVERNMENT IS EXPECTED TO HIT THE $14.3 TRILLION DEBT CEILING NO LATER THAN MAY 16. TREASURY SECRETARY TIMOTHY GEITHNER HAS SAID HE CAN KEEP THE COUNTRY OUT OF DEFAULT UNTIL AUGUST 2 THROUGH A SERIES OF ACCOUNTING MANEUVERS. BUT THAT GIVES LAWMAKERS LESS THAN THREE MONTHS TO BROKER A DIFFICULT DEAL. JUST HOW DIFFICULT WAS ON FULL DISPLAY TODAY. PRESIDENT OBAMA AND MOST DEMOCRATS FAVOR TAX INCREASES AS PART OF ANY DEFICIT REDUCTION PACKAGE. BUT ON NBC THIS MORNING SPEAKER BOEHNER SAID REPUBLICANS ARE WILLING TO LOOK AT ANY IDEAS EXCEPT THAT ONE.

>> AS YOU SIT HERE TODAY, RAISING TAXES, THAT'S A NON-STARTER.

>> IT IS OFF THE TABLE. EVERYTHING ELSE IS ON THE TABLE.

>> Reporter: BUT AMONG DEMOCRATS SENATE MAJORITY HARRY REID SPORTING INJURIES FROM A RECENT FALL SAID IT'S REALLY UNFAIR TO RULE OUT TAX CHANGES.

>> WE SHOULDN'T BE DRAWING LINES IN THE SAND. WE SHOULD BE WILLING TO WORK TOGETHER. AND THE FAIR WAY TO DO THAT IS TO CUT SPENDING. WE KNOW WE HAVE TO DO THAT. BUT ALSO TO MAKE THE TAX CODE A LITTLE MORE FAIR. I THINK RATHER THAN DRAWING LINES IN THE SAND, THAT'S WHERE WE SHOULD BE.

>> Reporter: THERE ALSO WAS NEW TALK OF ENTITLEMENT REFORM. BOEHNER INSISTED REFORMING MEDICARE AND MEDICAID STILL ARE LIVE OPTIONS DESPITE RISING CRITICISM OF REPUBLICAN IDEAS.

>> WE KNOW THAT THESE PROGRAMS WILL NOT EXIST IN THE FUTURE IF WE DON'T MAKE CHANGES TO THEM BECAUSE THEY'RE UNAFFORDABLE FOR OUR KIDS AND OUR GRAND KIDS.

>> Reporter: THE SENATE REPUBLICAN LEADER MITCH McCONNELL JOINED IN THAT STANCE.

>> IF THE LAST FINANCIAL CRISIS TAUGHT US ANYTHING, IT'S THAT WE CAN'T AFFORD TO PLAY WITH FIRE WHEN IT COMES TO ECONOMIC FORCES THIS GREAT. WE NEED TO GET SERIOUS NOW. BEFORE THE CRISIS THAT WE KNOW IS COMING. THAT MEANS ENTITLEMENT REFORM NEEDS TO BE ON THE TABLE.

>> Reporter: DEMOCRATS SAID IF REPUBLICANS REALLY ARE SERIOUS ABOUT SAVING MONEY THERE'S A MUCH MORE IMMEDIATE TARGET. ELIMINATING TAX BREAKS FOR OIL COMPANIES. MAJORITY WHIP DICK DURBIN OF ILLINOIS.

>> FOR THOSE MEMBERS ON BOTH SIDES OF THE AISLE WHO HAVE GIVEN IMPASSIONED SPEECHES ABOUT REDUCING THE DEFICIT, HERE'S YOUR CHANCE. IT'S A PUT UP OR SHUT UP MOMENT. IF YOU REALLY BELIEVE IN REDUCING THE DEFICIT THERE'S $21 BILLION OF LOW-HANGING FRUIT. LET'S PICK IT. LET'S PICK IT FOR THE TAX PAYORS. LET'S TAKE THESE SAVINGS AND PUT IT RIGHT ON DEFICIT REDUCTION.

>> Reporter: THE DEBATE UNFOLDED AS THE VICE PRESIDENT AND A BIPARTISAN GROUP OF HOUSE AND SENATE LEADERS HELD A SECOND MEETING ON A FRAMEWORK FOR DEFICIT REDUCTION. PRESIDENT OBAMA IS SCHEDULED TO HOLD DEFICIT TALKS WITH SENATE DEMOCRATS AT THE WHITE HOUSE TOMORROW FOLLOWED BY SENATE REPUBLICANS ON THURSDAY.

>> Woodruff: NEXT, A NEW CHALLENGE TO CHINA ON HUMAN RIGHTS FROM THE OBAMA ADMINISTRATION. AT A MEETING OF TOP OFFICIALS FROM THE WORLD'S TWO LEADING ECONOMIC POWERS, SECRETARY OF STATE HILLARY CLINTON TO THE SURPRISE OF MANY RAISED THE HUMAN RIGHTS ISSUE.

>> WE HAVE MADE VERY CLEAR PUBLICLY AND PRIVATELY OUR CONCERN ABOUT HUMAN RIGHTS. WE WORRY ABOUT THE IMPACT ON OUR DOMESTIC POLITICS AND ON THE POLITICS AND THE STABILITY IN CHINA AND THE REGION. WE SEE REPORTS OF PEOPLE, INCLUDING PUBLIC INTEREST LAWYERS, WRITERS, ARTISTS AND OTHERS, WHO ARE DETAINED OR DISAPPEARED. AND WE KNOW OVER THE LONG ARC OF HISTORY THAT SOCIETIES THAT WORK TOWARD RESPECTING HUMAN RIGHTS ARE GOING TO BE MORE PROSPEROUS, STABLE AND SUCCESSFUL. THAT HAS CERTAINLY BEEN PROVEN TIME AND TIME AGAIN, BUT MOST PARTICULARLY IN THE LAST MONTHS.

>> Woodruff: THE TWO-DAY MEETING ENDED THIS AFTERNOON WITH BOTH DELEGATIONS ACKNOWLEDGING WIDE GAPS REMAINING ON SEVERAL ECONOMIC AND POLITICAL ISSUES. SECRETARY CLINTON AGAIN SAID THE U.S. SIDE VERY CLEARLY TOLD THE CHINESE OF ITS CONCERNS ABOUT THAT COUNTRY'S HUMAN RIGHTS RECORD. FOR MORE ON WHERE HUMAN RIGHTS FITS INTO THE U.S.-CHINA RELATIONSHIP, WE GO TO PHELIM KINE, A RESEARCHER AT HUMAN RIGHTS WATCH WHO FOCUSES ON CHINA. AND ROBERT KAPP, THE FORMER PRESIDENT OF THE U.S.-CHINA BUSINESS COUNCIL. HE NOW ADVISES BUSINESSES AND NONPROFIT ORGANIZATIONS DEALING WITH CHINA. GENTLEMEN, THANK YOU BOTH FOR BEING WITH US. FLOOEN KINE, DO YOU FIRST. HOW WOULD YOU DESCRIBE THE HUMAN RIGHTS SITUATION OVER THE LAST FEW MONTHS IN CHINA.

>> WHAT WE DOCUMENTED PARTICULARLY SINCE MID FEBRUARY OF THIS YEAR IS A SERIOUS SPIKE IN REPRESSION IN CHINA. WE HAVE SEEN THE CHINESE GOVERNMENT SECURITY FORCES ARRESTING, DETAINING AND MORE ALARMINGLY ILLEGALLY, UNLAWFULLY DISAPPEARING DOZENS OF HUMAN RIGHTS LAWYERS, CIVIL SOCIETY ACTIVISTS, BLOGGERS, WRITERS, AND ARTISTS. AND THIS IS A SERIOUS CONCERN BECAUSE OBVIOUSLY THESE ARE THE TYPES OF PEOPLE WHO HAVE BEEN ADVOCATING FOR CHANGE IN CHINA, WHO HAVE BEEN ADVOCATING WITH THEIR GOVERNMENT FOR RULE OF LAW, FOR THE CHINESE GOVERNMENT TO OBEY THE LAWS IN ITS OWN CONSTITUTION AND EMBODIED IN ITS OWN REGULATORY INFRAINFRASTRUCTURE.

>> Woodruff: HOW DOES THIS COMPARE WITH WHAT WE'VE SEEN IN THE PAST IN CHINA?

>> OF COURSE, CHINA... THE CHINESE GOVERNMENT HAS A SORRY RECORD OF REPRESSION. BUT THE FACT IS THAT OVER THE PAST 30 YEARS, YOU KNOW, THE CHINESE GOVERNMENT HAS ACTUALLY MADE GREAT PROGRESS IN TERMS OF IMPROVING THE HUMAN RIGHTS SITUATION FOR ITS CITIZENS. BUT WHAT WE AND OTHER ORGANIZATIONS HAVE DOCUMENTED SINCE THE RUN-UP TO THE 2008 BEIJING OLYMPICS IS THAT THERE HAS BEEN A STEADY ROLLBACK IN KEY RIGHTS AND FREEDOMS. THAT HAS REALLY... WHAT'S REALLY EMBLEMATIC OF THAT IS, OF COURSE, AT THE END OF 2010 CHINA HAD THE WORLD'S ONLY IMPRISONED HUMAN RIGHTS LAUREATE. AND WHAT WE'VE SEEN SINCE THE MIDDLE OF FEBRUARY REALLY INDICATES A VERY, VERY SERIOUS UPTICK IN THE GOVERNMENT'S WILLINGNESS TO USE STATE SECURITY FORCES ILLEGALLY, UNLAWFULLY TO REPRESS ITS CITIZENS.

>> Woodruff: ROBERT KAPP, WHY IS THIS HAPPENING NOW?

>> WELL, I THINK THAT THE LAST COUPLE OF YEARS HAVE SHOWN THE CHINESE LEADERSHIP LOOKING OUT ON THE WORLD WITH INCREASING ALARM. NOT ONLY IN THE PERIOD OF THE OLYMPICS WHEN THEY WERE MASSIVE INTERNAL PROBLEMS WITHIN CHINA THAT MADE IT VERY UNEASY BUT EVEN MORE RECENTLY AS THE JASMINE REVOLUTION HAS WORKED ITS WAY ACROSS THE MIDDLE EAST AND NORTH AFRICA. THEY SEE THE UNITED STATES ACTUALLY AT LEAST AT THE HIGHEST LEVELS PUBLICLY STATED AS SOMEHOW COMPLICIT WITH SOME OF THESE EFFORTS IN OTHER COUNTRIES TO OVERTHROW EXISTING AUTHORITY. THEY FEEL INSECURE I THINK MORE THAN THEY NEED TO BUT THEY FEEL INSECURE ABOUT THE ROLE OF THE UNITED STATES IN RELATION TO FORCES WITHIN CHINA THAT THEY FEEL THREATENED THE STABILITY OF THE STATE. IT'S A VERY DIFFICULT PERIOD. I FRANKLY AM GLAD THAT SECRETARY CLINTON SAID WHAT SHE SAID BUT REALISTICALLY SPEAKING IT'S AN INCONCEIVEABLE SHE WOULDN'T SAY SOMETHING PUBLICLY LIKE THAT GIVEN THE ATTENTION THAT'S BEEN PAID TO THIS PUBLICLY IN THE LAST FEW MONTHS.

>> Woodruff: IN FACT WE KNOW THAT JUST IN THE NEW ISSUE OF THE ATLANTIC MAGAZINE SHE'S QUOTED USING EVEN SHARPER LANGUAGE. SHE CALLED CHINA'S HUMAN RIGHTS RECORD DEPLORABLE. SHE SAID CHINA IS TRYING TO STOP HISTORY. SHE SAID THAT'S A FOOL'S ERRAND. WHY DO YOU THINK THE ADMINISTRATION IS FEELING EMBOLDENED RIGHT NOW TO SPEAK OUT OR DO YOU?

>> I THINK SECRETARY CLINTON WHEN THEY CAME INTO OFFICE THE ADMINISTRATION CHOSE NOT TO PUT HUMAN RIGHTS SO FRONT AND CENTER THAT EVERYTHING ELSE WOULD BE SUBORDINATED TO IT. WE HAVE A HUGE ECONOMIC AND POLITICAL AND GLOBAL RELATIONSHIP WITH CHINA THAT NEEDS TO BE MAINTAINED AND SUSTAINED. MOST OF THE STRATEGIC AND ECONOMIC DIALOGUE WHICH WAS CON CONCLUDED OVER THE LAST TWO DAYS HAS BEEN ABOUT THOSE TWO ISSUES. DOMESTICALLY HERE AND BECAUSE OF THE DEVELOPMENTS IN CHINA IN RECENT MONTHS IT WAS JUST IMPOSSIBLE NOT TO TAKE COGNIZANCE OF THE FACT THAT THINGS ARE GOING BACKWARDS. THEY ARE GOING BACKWARDS BY OUR STANDARD AND SHE SPOKE UP. THE HEADLINE IN THE ATLANTIC ON THE FEW WORDS SHE USED WAS WAY OVER THE TOP TALKING ABOUT CLINTON SAYING THE CHINESE SYSTEM IS DOOMED. SHE DIDN'T SAY THAT. LIKE HER HUSBAND A FEW YEARS, SHE SAID THE CHINESE WERE ON THE WRONG SIDE OF HISTORY. MANY AMERICANS ON THIS ISSUE WOULD AGREE WITH HER.

>> Woodruff: AS YOU LOOK AT WHAT'S HAPPENING IN CHINA, WHAT THE ADMINISTRATION HAS BEEN SAYING, WHAT IS THIS LIKELY TO LEAD TO? DO YOU SEE ANY CHANGES COMING FROM THIS?

>> WELL, THE LANGUAGE THAT WE'VE HEARD FROM BOTH SECRETARY OF STATE CLINTON AND FROM VICE PRESIDENT BIDEN REALLY INDICATES THAT THE ADMINISTRATION FINALLY GETS THAT THE EROSION IN HUMAN RIGHTS IN CHINA IN RECENT YEARS ACTUALLY HAS DIRECT IMPACT ON KEY BILATERAL U.S.-CHINA RELATIONS. AND KEY PARTS OF THAT BILATERAL RELATIONSHIP. LET ME GIVE YOU AN EXAMPLE. OVER THE LAST COUPLE OF YEARS WE'VE DOCUMENTED NUMEROUS CASES OF, YOU KNOW, POISON AND TOXIC PRODUCTS FROM CHINA ENTERING THE EXPORT STREAM. WHETHER IT'S POISON DOG FOOD, TOXIC TOYS, POISON MILK. WHY DOES THAT HAPPEN? THE FACT IS IT HAPPENS BECAUSE THERE ARE SEVERE RESTRICTIONS ON FREEDOM OF EXPRESSION IN CHINA. THERE IS SEVERE REPRESSION OF WHISTLE BLOWERS, STATE CENSORSHIP. I THINK THE ADMINISTRATION'S REALIZING FOR KEY ISSUES THERE IS A IMPORTANT HUMAN RIGHTS COMPONENT. THEY CAN NO LONGER BE SEPARATED. THEY NEED TO SPEAK UP BECAUSE THESE HAVE VISCERAL IMPACT ON THE UNITED STATES AND U.S. CONSUMERS.

>> Woodruff: IN JUST THE FEW MINUTES WE HAVE LEFT, ROBERT KAPP, HOW WISE IS IT, HOW SMART IS IT FOR THE OBAMA ADMINISTRATION TO PUSH THIS SUBJECT NOW?

>> I THINK AMERICANS UNDERSTAND THAT IN GLOBAL AFFAIRS, THE UNITED STATES WITH ITS MANY PARTNERS AND ADVERSARIES AS WELL NEEDS TO WALK AND CHEW GUM AT THE SAME TIME. THERE IS NO WAY THAT YOU CAN SAY THIS ISSUE AND THIS ISSUE ALONE IS GOING TO DEFINE EVERYTHING ELSE IN THE RELATIONSHIP. THAT'S WHAT THE STRATEGIC AND ECONOMIC DIALOGUE IS ALL ABOUT. WE HAVEN'T TALKED ABOUT THE ECONOMIC DIMENSIONS OF IT. THEY ARE EXTREMELY IMPORTANT AND THE DISCUSSIONS I THINK SEEM TO HAVE BEEN VERY POSITIVE AND VERY PRODUCTIVE. THE UNITED STATES AND THIS ADMINISTRATION IN PARTICULAR I THINK UNDERSTANDS THAT WALKING AND CHEWING GUM GO WITH THE TERRITORY JUST AS THEY DO WITH MANY OTHER COUNTRIES WITH WHOM WE HAVE COMPLEX RELATIONSHIP. INDIA, EVEN PAKISTAN. YOU CAN'T HAVE IT ALL IN ONE BASKET. I THINK OUR FRIENDS IN THE HUMAN RIGHTS COMMUNITY AND IN THE BUSINESS COMMUNITY UNDERSTAND THAT AS WELL. >>.

>> IS WALKING AND CHEWING GUM A GOOD WAY TO PUT WHAT'S GOING ON HERE?

>> IT'S DEFINITELY ONE WAY TO PUT IT. BUT I THINK THAT THE POINT THAT NEEDS TO BE MADE IS THAT FOR A LONG TIME THERE'S BEEN A SENSE THAT, YOU KNOW, THE U.S. AND OTHER KEY BILATERAL PARTNERS IN CHINA DON'T HAVE LEVERAGE ON HUMAN RIGHTS. BUT THE FACT IS YOU REALLY NEED TO PUT YOUR HANDS ON THE LEVERS IN ORDER TO HAVE LEVERAGE. TO A CERTAIN EXTENT HUMAN RIGHTS HAVE BEEN TAKEN OFF THE TABLE. THEY'VE BEEN MARGINALIZED IN THESE MEANINGLESS, TOOTHLESS HUMAN RIGHTS DIALOGUES. WHAT'S NECESSARY ARE FOR THESE ISSUES TO COME BACK TO THE MAIN BILATERAL DIALOGUE, THE MAIN BILATERAL CONVERSATION. WE'RE STARTING TO SEE THAT TODAY IN WASHINGTON. HOPEFULLY THIS IS THE BEGINNING OF AN IMPORTANT TREND. IT'S IMPORTANT, YOU KNOW, THE CHINESE GOVERNMENT BUYS A LOT OF U.S. TREASURYS. THEY PURCHASE TREASURYS BUT DON'T BUY U.S. GOVERNMENT SILENCE ON ISSUES WHICH ARE OF VISCERAL IMPORTANCE BOTH TO THE CHINESE PEOPLE BUT ALSO TO THE U.S. CONSUMERS AND TO THE MAINTENANCE OF A STABLE AND SUSTAINABLE LONG-TERM RELATIONSHIP BETWEEN OUR TWO COUNTRIES.

>> Woodruff: GIVEN THAT, ROBERT KAPP, WHAT DO YOU SEE COMING OUT OF THIS? DO YOU SEE THE RELATIONSHIP CHANGING IN ANY WAY? DO YOU SEE WHAT THE U.S. IS SAYING ON HUMAN RIGHTS, JUST QUICKLY, AFFECTING THE ECONOMIC RELATIONSHIP BETWEEN THE TWO COUNTRYS?

>> I SUPPOSE I HOPE IT DOES BUT I'M NOT SURE THAT IT WILL. I THINK THE INTERESTING THING IS THAT AS YOU LOOK AT WHO WENT WOULD THIS S.E.D., THE SECRETARIES OF ENERGY, AGRICULTURE, COMMERCE, LABOR WERE ALL THERE AND A SIMILAR ARRAY OF TOP PEOPLE ON THE CHINESE SIDE. THESE TWO GOVERNMENTS ARE EXTREMELY HEAVILY ENGAGED NOW. THESE PEOPLE KNOW EACH OTHER. THEY CAN SIT DOWN AND WORK TOGETHER ON PROBLEMS NOT ONLY IN THE HUMAN RIGHTS FIELD BUT VERY MUCH IN THE FIELDS OF ECONOMICS, FINANCE, TRADE AND SO FORTH. EACH COUNTRY IS ASKING THE OTHER TO MAKE FUNDAMENTAL CHANGES IN THE WAY IT CONDUCTS ITS ECONOMIC AFFAIRS. EACH COUNTRY IS STRUGGLING TO DO THAT FOR ITSELF. IT'S A LONG, SLOW PROCESS BUT THERE'S A PRETTY GOOD WORKING RELATIONSHIP NOW BETWEEN THE TWO SIDES. THAT SHOULD NOT BE SACRIFICED AND I DON'T THINK ANYONE IN THIS SHOW HAS SUGGESTED THAT IT SHOULD BE. ON THEALITYOR OF VERY, VERY BLACK-AND-WHITE OR I SHOULD SAY DO IT OR ELSE RHETORIC THAT SOMETIMES AFFECTS THE RELATIONSHIP BOTH IN CHINA NN THE UNITED STATES.

>> Woodruff: WE WILL CONTINUE TO WATCH THIS. WE WANT TO LEAVE IT THERE THOUGH FOR NOW. ROBERT KAPP, PHELIM KINE, THANK YOU BOTH GENTLEMEN.

>> MY PLEASURE.

>> Brown: NOW, THE FIRST OF TWO STORIES FROM THE EASTERN EUROPEAN NATION OF UKRAINE, WHERE A DRAMATIC REVOLUTION TOOK PLACE NEARLY EIGHT YEARS AGO, BUT HAS SINCE RUN INTO REVERSALS. SPECIAL CORRESPONDENT KIRA KAY HAS OUR REPORT.

>> Reporter: INDEPENDENCE SQUARE IN THE HEART OF THE UKRAINIAN CAPITAL KIEV DOES NOT TODAY LOOK LIKE THE SETTING OF SOME OF THE GREATEST POLITICAL TURMOIL OF THE NEW CENTURY GU IN BUT IN THE WINTER OF 2004 THIS WAS THE STAGE OF A POPULAR UPRISING THAT RIVALS WHAT WE HAVE SEEN IN THE MIDDLE EAST IN RECENT MONTHS. A CORRUPT GOVERNMENT DEFEATED. THE PEOPLE'S WILL TRIUMPHANT. BUT NOW ALMOST EIGHT YEARS LATER, UKRAINE OFFERS A CAUTIONARY TALE FOR THOSE PROTESTORS IN CAIRO AND TUNIS. THE COUNTRY IS ONCE AGAIN FACING FEARS OF RISING AUTHORITARIANISM WITH HUMAN RIGHTS ALERTS BEING SOUNDED BY THE U.S. STATE DEPARTMENT AND GLOBAL WATCHDOGS LIKE FREEDOM HOUSE. DEMOCRACY BUILDING IS HARDER THAN IT LOOKS. IT WAS CALLED THE ORANGE REVOLUTION. NAMED FOR THE CAMPAIGN COLOR OF OPPOSITION PRESIDENTIAL CANDIDATE VICTOR YUSHCHENKO AND HIS COALITION ALLY.

>> IT WAS A BIG VICTORY FOR THE PEOPLE WHO CAME OUT TO THE SQUARE. THEY CAME OUT BECAUSE THEY WANTED FREEDOM AND A BETTER FUTURE. THEY HAD FAITH AND THEY ACTUALLY CHANGED UKRAINE.

>> Reporter: IN 2004 UKRAINIAN VOTERS CHOSE OPPOSITION LEADER FOR PRESIDENT. WHEN THE RULING PARTY FRAUDULENTLY DECLARED THEIR CANDIDATE THE WINNER THE PEOPLE TOOK TO THE STREETS.

>> THERE WAS NO OTHER WAY TO DO THIS. ALL MY FRIENDS, ALL MY FAMILY WAS THERE.

>> Reporter: THIS WOMAN WAS ONLY 19 WHEN SHE JOINED AS MANY AS HALF A MILLION OTHER PEOPLE IN 17 DAYS OF PROTEST. UNTIL THE SUPREME COURT ORDERED A REVOTE. IN EARLY 2005, VICTOR YUSHCHENKO WAS SWORN IN AS PRESIDENT AND CHOSE HIS OPPONENT AS HIS PRIME MINISTER. DID THINGS TURN OUT THE WAY YOU HOPED IT WOULD?

>> WE'RE GETTING A NEW PRESIDENT WHICH IS QUITE AN ACCOMPLISHMENT IN A WAY. WHICH IS SOMETHING NOBODY WOULD BELIEVE WE WOULD DO. THE THING IS THAT ONE PERSON KIND OF CHANGED THE WHOLE COUNTRY.

>> IT WAS ENORMOUS OPPORTUNITY. SPECIFICALLY IN THE FIRST YEAR OF YUSHCHENKO'S PRESIDENCY. ENORMOUS OPPORTUNITY BECAUSE THERE WAS SUCH A BIG LEVEL OF TRUST ON PART OF PEOPLE.

>> Reporter: THIS MAN WAS PRESIDENT YUSHCHENKO'S FIRST CHIEF OF STAFF. I QUIT, FRUSTRATED, AFTER JUST SIX MONTHS AS THE ORANGE GOVERNMENT FELL INTO VERY PUBLIC SQUABBLING AND FAILED TO DELIVER ON ITS PROMISES.

>> THERE WERE MORE FREEDOMS, LESS. THERE WERE LESS CONTROLS, YES. BUT THERE WAS NO DEMOCRACY IN INSTITUTIONAL FORM. COURTS HAVE BEEN NEGLECTED. WE DIDN'T PASS TO THE PARLIAMENT THE MAJOR DEMOCRATIC LAWS.

>> Reporter: BY THE 2010 PRESIDENTIAL ELECTION UKRAINIANS HAD BECOME SO DISAPPOINTED IN THEIR ORANGE REVOLUTION LEADERSHIP THAT THE INCUMBENT PRESIDENT RECEIVED JUST 5% OF THE VOTE IN HIS BID FOR RE-ELECTION. THE WINNER OF THAT ELECTION? VICTOR YANG COVE ITCH, THE VERY CANDIDATE ACCUSED OF TRYING TO STEAL THE 2004 VOTE THAT HAD SET OFF THE ORANGE REVOLUTION PROTEST. HE HAS WASTED LITTLE TIME.

>> LAST YEAR WE STARTED REFORMS IN VARIOUS AREAS: JUDICIAL, REGULATORY, GOVERNANCE, EDUCATION AND HEALTH CARE.

>> Reporter: HE HAS HEALED TIES WITH NEIGHBORING RUSSIA. HE HAS DECLARED HIS MAJOR GOAL TO BE CREATING ORDER OUT OF THE CHAOS LEFT BY HIS PREDECESSORS. BUT THIS STRONGER CONTROL COMES AT A PRICE.

>> THE NEW GOVERNMENT CAME TO POWER. THEY CONSOLIDATED ALL POWER IGNORING CONSTITUTION, NOT CARRYING CHECKS AND BALANCES. THEY HAVE CENTRAL GOVERNMENT. THEY HAVE ALL CABINET OF MINISTERS UNDER THEIR CONTROL. THEY CONTROL PARLIAMENT. NOW THEY MADE SO-CALLED LEGAL REFORM AS A RESULT OF WHICH THEY TOTALLY CONTROL COURT, CONSTITUTIONAL COURT, SUPREME COURT. MOST UKRAINIANS, ABSOLUTE MAJORITY OF PEOPLE WOULD SAY THAT THERE IS THE BACK SLIDE OF DEMOCRACY. THIS IS FELT IN THE AREA.

>> OVER THE LAST YEAR IT'S A COUPLE OF THE THINGS THAT THEY HAVE DONE HERE, WE HAVE FELT HAVE BEEN STEPS BACKWARD.

>> Reporter: U.S. AMBASSADOR TO UKRAINE SAYS THERE'S BEEN COOPERATION WITH THE GOVERNMENT ON BUSINESS INVESTMENT, AGRICULTURAL DEVELOPMENT, AND SECURING UKRAINE'S WEAPONS OF MASS DESTRUCTION. BUT THE U.S. WORRIES.

>> WE'VE BEEN CONCERNED ABOUT THE LOCAL ELECTIONS LAST YEAR WHICH I THINK MOST OBSERVERS FELT DID NOT MEET THE KIND OF STANDARDS THAT FRANKLY THE GOVERNMENT, THE PRESIDENT HIMSELF HAD SET FOR THEM. WE'VE BEEN CONCERNED ABOUT FREEDOM OF THE MEDIA AND EFFORTS THAT HAVE BEEN MADE TO INTIMIDATE OR OTHERWISE PRESSURE MEMBERS OF THE MEDIA.

>> Reporter: MOST WORRYING OUR GOVERNMENT PROSECUTIONS OF PROMINENT MEMBERS OF THE OPPOSITION. FORMER PRIME MINISTER TIM SCHENCK OWE FACES VARIOUS CHARGES OF MISUSE OF GOVERNMENT FUNDS AND RESOURCES. WE SAT DOWN WITH HER MINUTES AFTER SHE LEFT THE PROSECUTOR'S OFFICE AFTER HER 30th VISIT.

>> THE CURRENT PRESIDENT IS DOING HIS BEST TO ELIMINATE REAL POLITICAL COMPETITION AND DOMINATE UKRAINE. NOT THROUGH SOUND POLICY, REFORMS, DEMOCRACY AND REAL LEADERSHIP BUT LIKE IN STINIST TIMES BY SENDING THE OPPOSITION INTO PRISON AND EXILE.

>> Reporter: THE FORMER ECONOMY MINISTER WAS RECENTLY GRANTED POLITICAL ASYLUM IN THE CZECH REPUBLIC. HER INTERIOR MINISTER SITS IN JAIL AWAITING HIS TRIAL.

>> THE VAST MAJORITY OF THESE OFFICIALS WERE BEING INVESTIGATED. WE'RE MEMBERS OF THE PARTY OF TIM. IT WAS SOMETHING LIKE 18 OUT OF 20. SO OUR CONCERN WAS NOT TO INTERVENE IN THE SPECIFIC CASES BUT TO SAY, COME ON, THIS IS NOT RIGHT THAT YOU UNDER THE GUISE OF FIGHTING CORRUPTION THAT YOU GO AFTER AND CRITICIZE OR TRY TO PUNISH JUST ONE POLITICAL PARTY.

>> Reporter: BUT FOREIGN MINISTER INSISTS THESE PROSECUTIONS ARE A TOP PRIORITY.

>> WHERE DO YOU START? DO YOU START WITH THE TAXI DRIVER OR DO YOU START WITH THE HIGHEST LEVEL OF GOLF GOVERNMENT. DO YOU DO IT TO THOSE WHO HAVE JUST STARTED OR THOSE WHO HAVE FIVE YEARS IN OFFICE AND WHOSE ACTIVITIES HAVE LED TO A MAJOR, MAJOR... ALSO THROUGH THESE ETHICAL STANDARDS THAT THE COUNTRY NEEDS TO LIVE BY.

>> Reporter: HE DISPUTES ANY DEMOCRATIC BACK SLIDING.

>> I DON'T BELIEVE THAT WE HAVE ANY AUTHORITARIAN MEASURES INTRODUCED IN THIS COUNTRY. WE HAVE SIMPLY INTRODUCED THE POLICY THAT WAS EXPECTED BY SOCIETY FOR A LONG TIME. BASED ON THE MANDATE THAT BOTH THE PRESIDENT AND HIS POLITICAL FORCE RECEIVED THROUGH ELECTIONS, WE ARE DOING WHAT THE PEOPLE OF UKRAINE WANTS US TO DO.

>> Reporter: THAT ARGUMENT RESONATES AT A RECENT COMMEMORATION MARKING THE SOUTHERN CITY OF VICTORY IN WORLD WAR II. THIS REGION DELIVERED HIM THE VOTES IN THE 2010 PRESIDENTIAL ELECTION. THESE WOMEN TOLD ME THE COUNTRY NEEDS A STRONG HAND. THIS MAN SAID YANG COVE ITCH WILL REFORM UKRAINE IF GIVEN THE CHANCE. AND EVEN THIS YOUNG SUPPORTER IS OPEN MINDED.

>> IN OUR COUNTRY, WE HOPE THAT A NEW PRESIDENT, A NEW GOVERNMENT WILL GIVE US THAT FREEDOM.

>> Reporter: BUT BACK IN KIEV CENTRAL MARKET, CONCERNS REMAIN.

>> A YEAR BEFORE IT WAS LIKE KIND OF A FREEDOM. NOW IT'S JUST SOMETHING HERE, SOMETHING THERE. INFORMATION OR SOMETHING.

>> Reporter: FROM THE FAILINGS OF THE ORANGE GOVERNMENT AND THE SUBSEQUENT RETURN OF AUTHORITARIAN CONCERNS COMES A WARNING FOR CURRENT ACTIVISTS IN THE MIDDLE EAST.

>> IT'S NOT ENOUGH TO GO INTO THE STREETS AND TO DEMAND THAT SOMEBODY BE REMOVED. IT'S MUCH EASIER TO GET SOMEBODY REMOVED THAN TO GET SOMEBODY WHO WILL CONSTRUCT SOMETHING. THIS IS THE LESSON NOW ADAYS.

>> Reporter: BACK IN INDEPENDENCE SQUARE, THIS PERSON AGREES AND SAYS SHE AND HER FRIENDS ARE RETURNING TO ACTIVISM.

>> IN ORDER TO REALLY CHANGE SOMETHING IT DOES TAKE EFFORT OF A LOT OF PEOPLE. IT'S NOT LIKE YOU HAVE TO JUST GO TO THE STREETS FOR A FEW WEEKS AND SPEND TIME IN THE STREETS FOR A FEW WEEKS. YOU HAVE TO KEEP ON FIGHTING.

>> Reporter: THE SPIRIT OF 2004 CAN STILL BE SEEN IN SMALLER, MORE TARGETED RALLIES LIKE THIS ONE AGAINST URBAN DEVELOPMENT AND CORRUPTION. YOUNG ACTIVISTS HOPING THEY WILL BRING LONGER LASTING CHANGE TO THEIR COUNTRY.

>> Woodruff: TONIGHT'S REPORT IS PART OF OUR PARTNERSHIP WITH THE BUREAU FOR INTERNATIONAL REPORTING. KIRA KAY'S NEXT STORY LOOKS AT THE H.I.V. EPIDEMIC IN UKRAINE, WHICH HAS THE HIGHEST RATE OF THE DISEASE IN EUROPE.

>> Brown: FINALLY TONIGHT, WHAT'S BEHIND MICROSOFT'S DECISION TO BUY SKYPE? THE GIANT TECH COMPANY ANNOUNCED TODAY IT WAS PURCHASING THE INTERNET TELEPHONE SERVICE FOR $8.5 BILLION, THE LARGEST DEAL IN MICROSOFT'S 36-YEAR HISTORY. IN DOING SO, IT WILL GET ACCESS TO SKYPE'S MILLIONS OF USERS WORLDWIDE, WHO LOG ON TO COMMUNICATE BY VIDEO OR PHONE OVER THE WEB. TO WALK US THROUGH THE DEAL, WE TURN TO CECILIA KANG, TECHNOLOGY REPORTER FOR THE "WASHINGTON POST." WELCOME BACK.

>> THANK YOU.

>> Brown: $8.5 BILLION SOUNDS LIKE A A LOT OF MONEY.

>> IT IS.

>> Brown: WHAT IS BEHIND MICROSOFT'S MOVE HERE?

>> MICROSOFT HAS DOMINATED IN THE 1990s THE P.C.. IT'S THE SOFTWARE GIANT FOR THE P.C., THE PERSONAL-COMPUTER GENERATION, BUT IT WANTS TO BE MORE RELEVANT FOR THE INTERNET. IT PARTICULARLY WANTS TO BE MORE RELEVANT FOR SMART PHONES AND TABLETS AND THE SERVICES OFFERED UP FROM THESE NEW DEVICES THAT GOOGLE AND APPLE ARE DOMINATING. THIS IS REALLY A PLAY INTO THE NEXT PLATFORM, THE NEXT GENERATION OF DEVICES FOR COMMUNICATIONS IN THE FUTURE.

>> Brown: TO HELP US UNDERSTAND THIS PLAY, FIRST WE HAVE TO UNDERSTAND WHAT SKYPE IS. FOR THOSE NOT FAMILIAR, WHAT EXACTLY IS SKYPE?

>> SKYPE IS BASICALLY A PHONE OR A VIDEOCONFERENCING SERVICE FOR THE INTERNET. INSTEAD OF PLACING A PHONE CALL THROUGH COPPER WIRES, WHAT THIS ALLOWS YOU TO DO, SKYPE ALLOWS YOU TO DO AND IT PROVIDES IT FOR 170 MILLION USERS ACROSS THE WORLD IS IT ALLOWS YOU TO PLACE A PHONE CALL OVER THE INTERNET TO ANYONE ELSE WHO IS ALSO A SKYPE USER FOR FREE OR VERY CHEAP. MUCH LESS THAN YOUR LONG- DISTANCE OR YOUR WIRELESS PROVIDER IS OFFERING YOU.

>> Brown: I'M FAMILIAR WITH THAT. I ALSO KNOW THE FREE PART. IT DOESN'T MAKE MONEY, RIGHT? OR IT MAKES MONEY BUT IT DOESN'T MAKE ENOUGH MONEY?

>> THAT'S RIGHT. THAT'S WHY A LOT OF PEOPLE ARE QUESTIONING THE PRICE TAG. THIS IS A REALLY BIG PRICE TAG. THE BIGGEST AS YOU MENTIONED. THAT MICROSOFT HAS EVER MADE. BUT WHAT MICROSOFT IS BUYING FOR THIS SERVICE IS REALLY THE BRAND SKYPE. SKYPE IS REALLY ONE OF THE ONLY OR THE FEW WEB COMPANYS THAT PERSONIFIES THE SERVICE THAT IT PROVIDES. GOOGLE IS A VERB. PEOPLE SAY WE'RE GOING TO GOOGLE OR SEARCH FOR SOMETHING. PEOPLE SAY I'M TO SKYPE SOMEBODY. IT'S BECOME THAT RECOGNIZABLE TO CONSUMERS AROUND THE WORLD.

>> Brown: HOW DOES MICROSOFT INCORPORATE SKYPE INTO WHAT IT DOES AND ESPECIALLY WHAT IT WANTS TO DO TO COMPETE WITH THESE OTHER COMPANIES?

>> WHAT MICROSOFT HOPES TO DO IS WEAVE SKYPE THROUGH ITS VERY DIVERSE PRODUCT LINES FROM THE OFFICE SUITE OF BUSINESS APPLICATIONS TO ITS X- BOX CONSOLE TO ITS SMART PHONES SO IMAGINE YOU'RE PLAYING HALO ON THE X-BOX. HOPEFULLY YOU'LL CHOOSE TO ALSO PRESS A BUTTON THAT SAYS SKYPE AND DO A VIDEOCONFERENCE CALL WITH, SAY, A COUSIN IN ROME AND WHO WILL PLAY WITH YOU ALONGSIDE. YOU CAN WATCH THAT PERSON REALTIME ON THE VIDEOCONFERENCING. SO THAT'S SOME OF THE THINGS THAT YOU CAN IMAGINE THIS ACQUISITION CAN BRING ABOUT.

>> Brown: SO A BETTER EXPERIENCE WHICH ATTRACTS MORE USERS.

>> YES.

>> Brown: WHICH SOMEHOW BRINGS IN MONEY BECAUSE WE STILL DON'T SEE QUITE HOW IF SKYPE DOESN'T MAKE A PROFIT OR MUCH OF A PROFIT, HOW DOES MICROSOFT SEE GETTING TO THAT?

>> ASIDE FROM EXACTLY ATTRACTING PEOPLE TO MORE OF THEIR PRODUCTS, MICROSOFT ACTUALLY HOPES TO CHARGE FOR SKYPE WITHIN SOME OF ITS PRODUCTS. WITHIN THE NEXT, THE FIRST YEAR. MICROSOFT WANTS TO ACTUALLY CLOSE A DEAL WITHIN THIS YEAR AND EXPECTS THAT IT WILL PRODUCE PRODUCTS, EXCUSE ME, PROFITS FOR THE OVERALL COMPANY WITHIN A YEAR AFTER ITS ACQUISITION. IMAGINE IF YOU ARE USING EMAIL, OFFICE EMAIL AND YOU HAVE THE SKYPE FUNCTION, MAYBE MICROSOFT WILL ASK YOU, WILL YOU PAY ME 2 OR 3 DOLLARS MORE FOR THE SKYPE FUNCTION INCORPORATED IN OUR OFFICE EMAIL? THOSE ARE THE SORT OF THINGS THAT MICROSOFT IN REDMOND WASHINGTON WILL COME OUT OF THIS DEAL.

>> Brown: YOUR EXAMPLE, IT'S THIS LARGER CONTEXT YOU'RE TALKING ABOUT, THIS CONVERGENCE OF COMMUNICATION, INFORMATION AND ENTERTAINMENT. THAT IS THE LARGER BATTLE HERE.

>> THAT IS ABSOLUTELY RIGHT. YOU SEE BIG, MULTI-BILLION DOLLAR COMPANIES SCRAMBLE ING WHO ARE MAKING THESE BIG BUSINESS PLAN ADJUSTMENTS LIKE LIKE MICROSOFT. COME CAST WITH CONVERSIONS BUYING NBC UNIVERSAL TO BE MORE OF A MEDIA PLAYER. AT&T WANTS TO FORTIFY AND BE THE BIGGEST WIRELESS PROVIDER IN THE COUNTRY. SO THEY'RE GOING TO BUY T- MOBILE. WHAT'S HAPPENING IS THE INTERNET HAS REALLY DISRUPTED SO MANY BUSINESS PLANS WHEN IT COMES TO THE ENTERTAINMENT INDUSTRY, THE COMMUNICATIONS INDUSTRY AND THE HIGH-TECH INDUSTRY. ALL THESE COMPANIES-- APPLE, GOOGLE AND NOW MICROSOFT-- ARE REALLY MAKING VERY BIG DISRUPTIVE FUNDAMENTAL CHANGES TO THEIR BUSINESSES AND BIG PURCHASES BIG RISKS TO MAKE SURE THAT THEY ARE AHEAD OF EVERYONE ELSE WHEN TO GET THOSE CONSUMERS TO BUY THEIR PRODUCTS AND SERVICES.

>> Brown: YOU SEE PART OF IT PLAYING OUT, OF COURSE, IN THE MOBILE PHONES, RIGHT? THAT'S AN AREA WHERE MICROSOFT HAS LAGGED.

>> MICROSOFT HAS CERTAINLY LAGGED. IT'S BEEN VERY LATE TO THE TABLE ON THIS ONE. APPLE WITH ITS I-PHONE, GOOGLE WITH ITS SUITE OF... ITS LINE OF ANDROID BASE PHONES HAS DOMINATED WHAT'S KNOWN AS THE SMART PHONE MARKET. THE MINI-MOBILE COMPUTERS AND THE TABLET MARKET. MICROSOFT HAS FOR YEARS ACTUALLY TRIED TO BRING OUT A SMART PHONE THAT WOULD HAVE THE SAME SORT OF RESONANCE WITH CONSUMERS THAT THE I-PHONE HAS BUT CAN YOU ACTUALLY NAME A SINGLE WINDOWS 7 THAT HAS THAT KIND OF RESONANCE WITH CONSUMERS? PROBABLY NOT. MOST PEOPLE CAN'T. MICROSOFT HAS BEEN LATE. THEY'RE HOPING WITH SKYPE, A USER WILL WALK INTO A RETAIL STORE OR GO ONLINE AND SAY YOU KNOW WHAT? THAT WINDOWS MICROSOFT PHONE HAS A GREAT SKYPE SERVICE THAT IS ONLY AVAILABLE ON THIS PARTICULAR PHONE. I HAVE A PARTICULAR SORT OF WAY OF USING SKYPE. THAT MIGHT BRING ME IN AS A CUSTOMER FOR A MICROSOFT PHONE. THAT'S ONE OF THE HOPES.

>> Brown: THIS HAS TO GO THROUGH REGULATORY AND ANTITRUST.

>> IT CERTAINLY DOES. IT HAS TO GO THROUGH EITHER THE JUSTICE DEPARTMENT OR THE FEDERAL TRADE COMMISSION TO MAKE SURE THAT ALL THE COMPETITIVE ASPECTS OF THIS DEAL ARE IN CHECK AND THERE ISN'T TOO MANY ANTI-COMPETITIVE RAMIFICATIONS BUT MOST ANALYSTS I'VE TALKED TO SAY THEY EXPECT THE DEAL WILL PASS AS MICROSOFT HOPES BY THE END OF THIS YEAR BECAUSE THERE'S NOT A LOT OF OVERLAPPING BUSINESS BETWEEN MICROSOFT AND SKYPE.

>> Brown: THANK YOU VERY MUCH.

>> THANK YOU.

>> Woodruff: AGAIN, THE OTHER MAJOR DEVELOPMENTS OF THE DAY. WORRIES OF MORE FLOODING MOVED DOWNSTREAM AFTER THE MISSISSIPPI RIVER CRESTED AT NEAR RECORD LEVELS IN MEMPHIS, TENNESSEE. PRESIDENT OBAMA LAUNCHED A NEW CAMPAIGN FOR IMMIGRATION REFORM. AND IN LIBYA, THE HEAVIEST BOMBING IN WEEKS STRUCK TRIPOLI, WHILE REBELS LAUNCHED A NEW BID TO BREAK THE SIEGE OF MISRATA. AND TO HARI SREENIVASAN, FOR WHAT'S ON THE NEWSHOUR ONLINE. HARI?

>> Sreenivasan: FIND A PHOTO ESSAY OF THE MISSISSIPPI RIVER FLOODING AND MORE VIDEO FROM THE SCENE. WE LOOK AT THE MAKING OF A MEMORY MASTER IN A CONVERSATION WITH AUTHOR JOSHUA FOER. WATCH OUR MEMORY BRAIN BATTLE AND TEST YOUR SKILLS AT WORD RECALL. AND FINALLY, TONIGHT'S EDITION OF "FRONTLINE" TAKES US INSIDE THE COUNTERTERRORISM OUTFIT CHARGED WITH KILLING OR CAPTURING TALIBAN AND AL QAEDA FIGHTERS. "FRONTLINE" AIRS ON MOST PBS STATIONS LATER THIS EVENING. ALL THAT AND MORE IS ON OUR WEB SITE, newshour.pbs.org. JUDY?

>> Woodruff: AND THAT'S THE NEWSHOUR FOR TONIGHT. ON WEDNESDAY, WE'LL UPDATE THE FIGHTING BETWEEN GOVERNMENT FORCES AND REBELS IN LIBYA. I'M JUDY WOODRUFF.

>> Brown: AND I'M JEFFREY BROWN. WE'LL SEE YOU ONLINE, AND AGAIN HERE TOMORROW EVENING. THANK YOU. GOOD NIGHT. MAJOR FUNDING FOR THE PBS NEWSHOUR HAS BEEN PROVIDED BY:

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