PBS NewsHour; February 17, 2011 6:00pm-7:00pm PST

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>> Brown: THE CAPITAL OF TINY BAHRAIN WAS UNDER MILITARY LOCKDOWN THIS EVENING, HOURS AFTER RIOT POLICE SMASHED THE PROTESTERS' MAIN CAMP. THE RAID FOLLOWED DAYS OF DEMONSTRATIONS IN THE PERSIAN GULF STATE-- HOME TO THE U.S. NAVY'S FIFTH FLEET. HOSPITAL OFFICIALS REPORTED AT LEAST FOUR KILLED AND SCORES MORE HURT. WE BEGIN WITH A REPORT FROM LINDSEY HILSUM OF "INDEPENDENT TELEVISION NEWS." PLEASED BE ADVISED SOME OF THE IMAGES ARE DISTURBING.

>> Reporter: THEIR PLAN WAS TO RECREATE CAIRO'S TAHRIR SQUARE AT THE PEARL ROUNDABOUT IN MANAMA, BUT THE SECURITY FORCES MOVED AGAINST THEM IN THE EARLY HOURS. AMATEUR FOOTAGE SHOWS THE CHAOS AS TEARGAS AND BIRD SHOT WERE UNLEASHED. THE SEVERAL HUNDRED PROTESTORS WERE MOSTLY SLEEPING AT THE TIME, IN THEIR TENTS.

>> ( translated ): WE DIDN'T ATTACK ANYONE. WE WERE SLEEPING AND HOPING FOR THE BEST. WE DIDN'T EXPECT THE POLICE TO ATTACK US SO LATE AT NIGHT. IT WAS SO SUDDEN.

>> Reporter: BAHRAIN TELEVISION SHOWED THE OFFICIAL VERSION OF EVENTS. THE VOICEOVER SAYS THE POLICE GAVE WARNINGS AND USED MINIMUM FORCE. HE TALKS OF CASUALTIES AMONGST THE POLICE NOT THE PROTESTORS. BUT THE SCENE AT THE HOSPITAL A SHORT WHILE LATER SHOWS THE ANGER AND DESPERATION OF THE DEMONSTRATORS. THEY SAY THAT DOCTORS WERE INITIALLY PREVENTED FROM TREATING THE INJURED, AND THAT SCORES OF PEOPLE ARE MISSING, FEARED DEAD.

>> ( translated ): WE HAVE CHILDREN AND WE CAME IN PEACE. THE POLICE ARE THIEVES. THEY DESTROYED OUR TENTS AND THREATENED US AND OUR CHILDREN WITH THEIR WEAPONS. THEY TOOK DOWN OUR TENT. WE SAW WITH OUR OWN EYES HOW THEY KILLED THE MARTYRS. WE WATCHED THEM KILL AND BEAT UP THE PROTESTORS.

>> Reporter: SOME OF THE INJURIES ARE HORRIFIC. A HUMAN RIGHTS WORKER TOLD CHANNEL FOUR NEWS THAT THE POLICE USED BIRD-SHOT AT CLOSE RANGE AND THIS WAS THE RESULT. THE GOVERNMENT COUNTERED WITH ITS OWN VERSION: THEY SAY THESE ARE POLICEMEN INJURED BY PROTESTORS. LATER, THEY DISPLAYED ON TV DAGGERS AND SWORDS WHICH THEY SAY THEY SEIZED ALTHOUGH THERE'S BEEN NO FOOTAGE WHICH SHOWS THE PROTESTORS CARRYING ANY WEAPONS. LATER IN THE DAY, A PRO GOVERNMENT DEMONSTRATION WAS ORGANIZED. UNDOUBTEDLY SOME BAHRAINI CITIZENS DO SUPPORT KING HAMAD BIN ISA AL-KHALIFA, BUT THE SHI'A MAJORITY SUFFER DISCRIMINATION, AND YOUNG PEOPLE ARE DISAPPOINTED THAT THERE'S BEEN SO LITTLE POLITICAL AND SOCIAL REFORM. TANKS ARE NOW ON THE STREETS OF MANAMA. THE ARMY READY TO CRUSH ANY FURTHER UNREST.

>> ( translated ): THE CENTRAL COMMAND OF THE BAHRAIN DEFENSE FORCES ANNOUNCES THAT MILITARY FORCES HAVE DEPLOYED IN THE CAPITAL, IN ORDER TO TAKE NECESSARY PROCEDURES TO PROTECT CITIZENS AND RESIDENTS, TO PROTECT THEIR RIGHTS AND THEIR PROPERTIES FROM ACTS OF VIOLENCE.

>> Reporter: THIS EVENING GULF FOREIGN MINISTERS GATHERED IN MANAMA FOR A SCHEDULED MEETING, EACH ONE ANXIOUS THAT THE UNREST WILL SPREAD, THAT PRINCES AND KINGS WILL PROVE AS VULNERABLE AS THE PRESIDENTS OF TUNISIA AND EGYPT. AND DOWN THE ROAD AT THE HOSPITAL, PROTESTORS KEPT THEIR NOISY VIGIL WAITING FOR NEWS OF THE WOUNDED AND DEMANDING THE OVERTHROW OF BAHRAIN'S RULING DYNASTY.

>> Lehrer: LATER IN THE EVENING, BAHRAIN'S FOREIGN MINISTER DEFENDED THE CRACKDOWN. HE SAID THE VIOLENCE WAS REGRETTABLE, BUT THE DEMONSTRATORS LEFT THE GOVERNMENT NO CHOICE.

>> THE COUNTRY WAS WALKING ON THE BRINK OF A SECTARIAN ABYSS. SO IT WAS A VERY IMPORTANT STEP THAT HAD TO HAPPEN. POLICE TOOK EVERY CARE POSSIBLE. BUT THIS IS-- THERE'S NOTHING THAT GUARANTEES THAT-- MISHAPS COULD HAPPEN AND THAT UNFORTUNATELY LED TO DEATHS.

>> Brown: IN WASHINGTON TODAY, A WHITE HOUSE SPOKESMAN VOICED STRONG DISPLEASURE WITH THE ATTACKS ON PROTESTERS. DEFENSE SECRETARY GATES TELEPHONED BAHRAIN'S CROWN PRINCE. OFFICIALS WOULD NOT SAY WHAT THEY DISCUSSED. AND SECRETARY OF STATE CLINTON SPOKE TO THE KINGDOM'S FOREIGN MINISTER BEFORE BRIEFING U.S. SENATORS AT THE CAPITOL.

>> I CALLED MY COUNTERPART IN BAHRAIN THIS MORNING AND DIRECTLY CONVEYED OUR DEEP CONCERNS ABOUT THE ACTIONS OF THE SECURITY FORCES. AND I EMPHASIZED HOW IMPORTANT IT WAS GIVEN THAT THERE WILL BE BOTH FUNERALS AND PRAYERS TOMORROW, THAT THAT NOT BE MARRED BY VIOLENCE.

>> Lehrer: THE U.N. SECRETARY GENERAL ALSO WEIGHED IN ON THE SITUATION IN BAHRAIN. BAN KI-MOON SAID THE REPORTED VIOLENCE AGAINST PROTESTERS WAS DEEPLY TROUBLING. AND HE SAID, "IT MUST STOP." MEANWHILE, IN YEMEN, POLICE AND GOVERNMENT SUPPORTERS BATTLED AN ESTIMATED 6,000 PEOPLE IN SANAA. AND FOUR MORE DEMONSTRATORS WERE KILLED IN ADEN, MAKING SIX IN TWO DAYS. IN NORTHERN IRAQ, SECURITY GUARDS KILLED TWO KURDISH PROTESTERS. THE GUARDS OPENED FIRE WHEN CROWDS THREW STONES AT OFFICES OF THE KURDISH RULING PARTY. AND CROWDS MARCHED IN LIBYA FOR A SECOND DAY. THE OPPOSITION REPORTED TEN PROTESTERS IN TWO CITIES HAVE BEEN KILLED.

>> Brown: AND WE TAKE A BROAD LOOK NOW AT THE UPHEAVAL SWEEPING ACROSS THE REGION. HALEH ESFANDIARI IS DIRECTOR OF THE MIDDLE EAST PROGRAM AT THE WOODROW WILSON INTERNATIONAL CENTER FOR SCHOLARS. SHIBLEY TELHAMI IS THE ANWAR SADAT PROFESSOR OF PEACE AND DEVELOPMENT AT THE UNIVERSITY OF MARYLAND. HE'S CONDUCTED NUMEROUS PUBLIC OPINION SURVEYS IN THE MIDDLE EAST. BECAUSE IT IS INTERESTING TO THINK ABOUT PUBLIC OPINION NOW, ISN'T IT? WHAT'S HAPPENED? DID IT SUDDENLY SHIFT IN WHAT'S GOING ON?

>> IF YOU THINK ABOUT A MONTH AGO, GOVERNMENTS WERE SCARING THE PUBLIC. IF YOU HAD TO ASK ME WHAT IS THE STATE OF AFFAIRS, THAT WAS STATE OF AFFAIRS WHERE THE PUBLIC WAS AFRAID OF GOVERNMENT. A MONTH LATER, GOVERNMENTS ARE AFRAID OF THE PUBLIC.

>> Brown: GOVERNMENTS ARE AFRAID OF THE PUBLIC?

>> GOVERNMENTS ARE AFRAID OF THE PEOPLE. THAT'S A REMARKABLE CHANGE AND I THINK IT'S THE BEGINNING OF WHAT I CALL AN ARAB AWAKENING, THE LIKES OF WHICH WE HAVE NOT SEEN. IT'S AN EMPOWERMENT THAT IS MAYBE AKIN TO SOMETHING LIKE THE INDUSTRIAL REVOLUTION IN EUROPE.

>> Brown: REALLY. THAT LARGE.

>> LET ME JUST TELL YOU WHY. AND I DON'T SAY THAT LIGHTLY AND I KNOW THAT THIS IS ONLY A BEGINNING OF IT, IT'S GOING TO BE SET BACK, THINGS ARE NOT GOING TO FULL IN A CERTAIN WAY. BUT THERE'S AN INDIVIDUAL EMPOWERMENT THE LIKES OF WHICH WE HAVE NEVER WITNESSED IN THE MIDDLE EAST AND IT'S REALLY ALMOST ENTIRELY A FUNCTION OF THE INFORMATION OF THIS. I'M NOT SAYING THAT THE CAUSE OF THESE EVENTS. YOU KNOW EVERY SINGLE YEAR WHEN I GO TO THE MIDDLE EAST SKI THE QUESTION "SO WHAT'S NEW?" I NEVER ASK THE QUESTION "IS THERE REASON FOR PEOPLE TO REVOLT?" I ALWAYS ASK THE QUESTION "WHY HAVEN'T PEOPLE REVOLTED ALREADY?" THAT'S BEEN THE STATE OF AFFAIRS. SO THIS IS THE NEW VEHICLE, NEW EMPOWERMENT AND IT'S INTERESTING ACTUALLY, TO LOOK AT IT BECAUSE IT GIVES US ALSO A GUIDE INTO SEPARATING SOME OF THE COUNTRIES IN TERMS OF WHERE IT'S LIKELY TO SPIN.

>> Brown: LET'S GET TO THAT BUT FIRST, HALEH, THERE'S THIS HUGE UPROAR BUT ALSO WE'RE NOW SEEING WE JUST SAW IN THESE CLIPS REAL SERIOUS PUSHBACK IN BAHRAIN, YEMEN, WE SAW LIBYA YESTERDAY, WE SAW IRAN THE OTHER DAY. GOVERNMENTS ARE FIGHTING BACK. ARE THEY ABLE TO?

>> I THINK IN SOME COUNTRIES LIKE IRAN THEY HAVE SUCCEEDED. IN OTHER COUNTRIES THEY MAY NOT. WE SEE TWO THREATS TAKING PLACE IN THE MIDDLE EAST. ONE IS THE CLAMPDOWN WE SAW IN IRAN, YEMEN, BAHRAIN AND WE MIGHT SEE IN ALGERIA IF IT HAPPENS, YOU KNOW? BUT THEN THERE'S THE OTHER TREND WHICH IS THE TREND WE SAW IN TUNISIA AND EGYPT. BUT WHAT'S INTERESTING IS THAT FOR THE FIRST TIME I THINK I AGREE WITH YOU THAT YOU HAVE THE YOUNGER GENERATION TAKING THE MATTERS IN THEIR HANDS.

>> Brown: THAT'S THE SIMILARITY YOU SEE THROUGHOUT?

>> THROUGH THE REGION UNTIL A FEW MONTHS AGO WE ALWAYS EXPECTED THAT IF THERE WAS A CHANGE, A REVOLUTION, IT WOULD HAVE BEEN THE PEOPLE IN THE CITIES, THE MIDDLE-CLASS. BUT, NO, THESE ARE THE CHILDREN WHO GREW UP UNDER THIS REGIME IN EGYPT. THE CHILDREN THAT GREW UP UNDER MUBARAK, IN IRAN THE CHILDREN WHO GREW UP IN THE REVOLUTION. SO YOU HAVE A WHOLE DIFFERENT, I THINK, PHENOMENON POPPING UP IN THE REGION.

>> Brown: SHIBLEY, FOCUS A LITTLE MORE ON THE DIFFERENCES, THEN. IN BAHRAIN, FOR EXAMPLE, YOU HAVE THIS SECULAR... I MEAN YOU HAVE SECTARIANISM.

>> WELL, IN MY OPINION WHEN I LOOK AT IT IN TERMS OF WHERE IT'S LIKELY TO HAVE SUCCESS AND THIS TREND OF EMPOWERMENT THAT'S SPREADING THERE ARE THREE FACTORS. ONE IS HOW OPEN THIS SOCIETY IS TO THE INFORMATION REVOLUTION. I MEAN, ODDLY ENOUGH IN MINUTE, THE MORE REISOLATE REGIMES, THE MORE WE PROLONG THEIR LIVES IN A WAY, IN PART BECAUSE THEY CAN POINT OUT TO SOME FOREIGN POWER AND PEOPLE ARE FEARFUL. EVERYBODY WANTS TO GET RID OF REPRESSIVE REGIMES BUT THEY WANT TO GET RID OF FOREIGN INTERVENTION EVEN MORE AND GOVERNMENTS CAN USE IT. BUT SECOND, IF YOU LOOK AT THE EMPOWERMENT, WHAT EXPLAINS IT, IT IS NUMBER ONE PEOPLE OBVIOUSLY GET MORE INFORMATION OUTSIDE OF WHAT THEIR GOVERNMENT PROVIDES. NUMBER TWO, THEY KNOW WHAT THE REST OF THE WORLD HAS AND THEY HAVE LINKS TO IT. AND NUMBER THREE THEY HAVE AN INSTRUMENT FOR MOBILIZING POLITICALLY WITHOUT THE NEED OF POLITICAL INTERMEDIARIES, POLITICAL PARTIES OR ORGANIZATIONS. SO THE MORE OPEN A SOCIETY IS, FRANKLY, THE MORE EMPOWERED, THE BETTER THE ORGANIZATION. THAT'S NUMBER ONE. NUMBER TWO, I THINK THE MORE HOMOGENEOUS IT IS THE EASIER IT IS. EGYPT AND TUNISIA WAS A LITTLE EASIER BECAUSE IT WAS NOT AN IDEOLOGICAL REVOLUTION. THERE WERE NO MAJOR SOCIETAL DIVISIONS AT THE CORE OF THIS RERP ELECTROCUTION. THEY WERE PRIMARILY PUBLIC EMPOWERMENT VERSUS REGIME.

>> Brown: SO REGIME VERSUS A KIND OF MASS...

>> KIND OF MASS. AND WHEN YOU LOOK AT IRAN, FRANKLY, THERE'S OBVIOUSLY HUGE EMPOWERED OPPOSITION THAT'S BEEN THERE AND IT'S GOING TO BE THERE AND THEY MIGHT BE EVEN MORE EMPOWERED. BUT EVERY EVIDENCE WE HAVE IS THAT THE REGIME ALSO HAS GRASS-ROOTS CONSTITUENTS THAT CAN BE MOBILIZED. HOW THAT'S GOING TO PLAY ITSELF OUT WE DON'T KNOW. AND PLACES LIKE YEMEN, TOO, WHERE, YES, YEMEN THERE'S THE REGIME BUT THERE'S SO MANY LAYERS OF DIFFERENCES. GOVERNMENTS CAN USE THAT, IN BAHRAIN UP TO A POINT, ALTHOUGH THE MAJORITY, MAYBE TWO-THIRDS, ARE SHI'A, THERE'S STILL SUNNIS WHO ARE RALLIED BEHIND THE GOVERNMENT SO DIVISIONS MATTER WITHIN EVERY SOCIETY AND THAT'S A FACTOR BUT THE THIRD ONE IS ECONOMICS. I MEAN, THIS IS NOT ABOUT ECONOMICS. THIS IMPROVEMENT IN THAT WE SEE IN THE ARAB WORLD, THIS IS MORE ABOUT DIGNITY AND LIBERTY. BUT ECONOMICS PLAYS INTO IT. OBVIOUSLY GAP HAS BEEN A FACTOR, THE GAP BETWEEN RICH AND POOR HAS BEEN A FACTOR BUT RICHER COUNTRIES ARE JUST UP TO A POINT INSULATED BUT THAT WILL STOP IT FROM HAPPENING.

>> Brown: ARE THOSE THE FACTORS YOU WERE TALKING ABOUT?

>> I WOULD LIKE TO ADD THIS IS EDUCATION. YOU ARE NOT ONLY DEALING WITH A GENERATION OF YOUNG PEOPLE WHO AREN'T EDUCATED, EDUCATED WHO KNOWS WHAT'S GOING ON IN THE REST OF THE WORLD AND THERE ARE SYSTEMS OF AWAKENING. WE WANT TRANSPARENCY. WE WANT ACCOUNTABILITY FROM OUR GOVERNMENT. WE CHALLENGE OUR GOVERNMENT. YOU KNOW, THE SENSE OF EMPOWERMENT. BUT THEN IN EACH COUNTRY IT HAS ITS OWN, I THINK, ITS MANIFEST IS DIFFERENT. IN TUNISIA TO BE VERY HONEST WITH YOU WE OUGHT THAULS THIS IS THE MOST SECULAR COUNTRY IN THE REGION WHEN IT COMES TO WOMEN'S RIGHTS IT HAS THE MOST PROGRESS FAMILY LAWS IN THE WHOLE REGION. IT HAS 90% OF ITS PEOPLE WERE EDUCATED. BUT 30% OF THE YOUNG WOULD ALWAYS LIKE TO EMIGRATE, LEAVE TUNISIA. SO IN EGYPT IT'S A TOTALLY DIFFERENT SITUATION. YOU HAVE THESE PEOPLE WHO FEEL THAT HOW CAN YOU LIVE WITH TWO DOLLARS A DAY? IT'S IMPOSSIBLE. HOW LONG CAN A YOUNG COUPLE BE MARRIED AND LIVE WITH THEIR PARENTS? IN IRAN YOU FEEL YOU HAVE EVERYTHING AT YOUR DISPOSAL BUT NOT FREE. SO THE QUEST IN IRAN IS FOR FREEDOM BUT I THINK AS SHIBLEY SAYS, TUNISIA IS FOR DIGNITY AND IN BAHRAIN IT'S THE SHIITE MINORITY.

>> Brown: JUST BRIEFLY YOU'RE LOOKING AT THE SIMILARITIES AND THE DIFFERENCES. BUT WE ALL HAVE TO FIGURE OUT A WAY TO RESPOND, RIGHT?

>> WELL, LOOK TO THE U.S., TO BE HONEST. THIS IS NOT A TIME TO JUST REACT. FIRST OF ALL, YOU'VE GOT TO PICK THE SIDE OF THE PEOPLE WHO ARE GOING PEACEFULLY. YOU CAN'T ALLOW VIOLENCE IN PLACES WHERE WE HAVE INFLUENCES, NUMBER ONE. NUMBER TWO, THIS IS NOT JUST A REACTION. WE HAVE TO SIT BACK AND DEFINE OUR INTERESTS IN A WAY THAT GETS AGAINST ASPIRATION OF THE PUBLIC IN THE REGION WITH THE PUBLIC EMPOWERMENT.

>> Brown: AND THE LAST WORD, A BROAD-BRUSH RESPONSE?

>> I THINK BROAD RESPONSE. I MEAN, THERE IS NO DIFFERENCE BETWEEN EGYPT AND BAHRAIN. IF IN EGYPT YOU INSISTED ON A CHANGE AND TRANSITION THEN YOU HAVE TO DO THE SAME THING IN BAHRAIN AND YOU HAVE TO BE MORE THAT WAY IN IRAN AND OTHER COUNTRIES.

>> Brown: ALL RIGHT. HALEH ESFANDIARI, SHIBLEY TELHAMI, THANK YOU BOTH VERY MUCH.

>> Lehrer: STILL TO COME ON THE "NEWSHOUR": A COLLECTIVE BARGAINING SHOWDOWN IN WISCONSIN; MEDICAID ON STATE CHOPPING BLOCKS; SENATORS WARNER AND CHAMBLISS ON THE DEBT CRISIS AND A POLICE CHIEF'S VIEW OF THE MEXICAN DRUG WAR. BUT FIRST, THE OTHER NEWS OF THE DAY. HERE'S HARI SREENIVASAN.

>> Sreenivasan: CHINA WARNED THE U.S. TODAY NOT TO USE A CAMPAIGN AGAINST INTERNET CENSORSHIP TO MEDDLE IN CHINA'S AFFAIRS. SECRETARY OF STATE CLINTON ANNOUNCED THE $25 MILLION EFFORT THIS WEEK. SHE SAID IT WOULD HELP BLOGGERS OUTFLANK DIGITAL BARRIERS LIKE CHINA'S GREAT FIREWALL. BUT IN BEIJING TODAY, A FOREIGN MINISTRY SPOKESMAN SAID, "WE ARE AGAINST ANY OTHER COUNTRIES USING INTERNET FREEDOM AS A PRETEXT FOR INTERFERING." MEANWHILE, CHINESE CENSORS DELETED REFERENCES TO CLINTON'S SPEECH FROM WEB SITES AVAILABLE IN CHINA. A U.S. INTELLIGENCE ESTIMATE FINDS IRAN'S LEADERS ARE SPLIT OVER HOW FAR TO TAKE THEIR NUCLEAR PROGRAM. THE "WALL STREET JOURNAL" REPORTED ON THE CLASSIFIED FINDINGS TODAY. IT SAID INTERNATIONAL SANCTIONS MAY BE CAUSING THE DIVISIONS. ACCORDING TO THE REPORT, IRAN HAS RESUMED ENRICHING NUCLEAR FUEL, BUT ITS LEADERS ARE STILL DEBATING WHETHER TO TRY TO BUILD A BOMB. THE U.S. HOUSE MOVED CLOSER TODAY TO ADOPTING A REPUBLICAN BILL FOR FUNDING THE GOVERNMENT THE REST OF THE FISCAL YEAR. IT INCLUDED ABOUT $60 BILLION IN SPENDING CUTS. SPEAKER JOHN BOEHNER INSISTED THE HOUSE WILL NOT ACCEPT ANOTHER CONTINUING RESOLUTION-- OR C.R.-- WITHOUT BUDGET CUTS.

>> OUR GOAL HERE IS TO CUT SPENDING. I'M NOT GOING TO MOVE ANY KIND OF SHORT-TERM C.R. AT CURRENT LEVELS. WHEN WE SAY WE'RE GOING TO CUT SPENDING-- READ MY LIPS-- WE'RE GOING TO CUT SPENDING.

>> Sreenivasan: BOEHNER'S WARNING DREW A REBUKE FROM SENATE MAJORITY LEADER HARRY REID. HE CHARGED THE SPEAKER IS FLIRTING WITH FORCING THE GOVERNMENT TO CLOSE ITS DOORS, INSTEAD OF NEGOTIATING A COMPROMISE.

>> WE ARE TERRIBLY DISAPPOINTED THAT SPEAKER BOEHNER CAN'T CONTROL THE VOTES IN HIS CAUCUS TO PREVENT A SHUTDOWN OF GOVERNMENT. AND NOW HE'S RESORTING TO THREATS TO DO JUST THAT WITHOUT ANY NEGOTIATIONS. THAT IS NOT PERMISSIBLE. WE WILL NOT STAND FOR THAT. HE'S WRONG.

>> Sreenivasan: THE CURRENT MEASURE FUNDING THE GOVERNMENT RUNS OUT MARCH FOURTH. IN ECONOMIC NEWS, FIRST-TIME JOBLESS CLAIMS ROSE UNEXPECTEDLY LAST WEEK. AND CONSUMER PRICES WERE SLIGHTLY HIGHER IN JANUARY THAN EXPECTED. STILL, WALL STREET MANAGED MODEST GAINS TODAY. THE DOW JONES INDUSTRIAL AVERAGE ADDED NEARLY 30 POINTS TO CLOSE AT 12,318. THE NASDAQ ROSE SIX POINTS TO CLOSE AT 2,831. MORE THAN 100 DOCTORS, NURSES, AND PHYSICAL THERAPISTS IN NINE CITIES WERE CHARGED WITH MEDICARE FRAUD TODAY. THEY'RE ACCUSED OF TAKING PART IN SCAMS THAT ILLEGALLY BILLED MEDICARE FOR MORE THAN $225 MILLION. U.S. ATTORNEY GENERAL ERIC HOLDER ANNOUNCED THE NATIONWIDE BUST IN WASHINGTON. WITH TODAY'S ARRESTS WE'RE SENDING AN IMPORTANT MESSAGE: HEALTH CARE FRAUD IS NOT EASY MONEY. IT'S A SERIOUS CRIME AND AS WE HAVE SHOWN TODAY, WE WILL MAKE SURE THAT IT HAS SERIOUS CONSEQUENCES.

>> Sreenivasan: COURT PAPERS SAID THE ALLEGED SCAMS INCLUDED HEMORRHOID REMOVALS THAT WERE NEVER PERFORMED AND TOE SURGERY THAT AMOUNTED TO LITTLE MORE THAN CLIPPING THE NAILS. AT LEAST 25 PEOPLE DIED IN TANZANIA OVERNIGHT, AFTER EXPLOSIONS AT A MILITARY AMMUNITION DEPOT. ABOUT 145 PEOPLE WERE WOUNDED. THE EXPLOSIONS LEVELED HOMES IN DAR ES SALAAM, THE COMMERCIAL HUB OF THE EAST AFRICAN NATION. THOUSANDS OF PEOPLE FLED TO A STADIUM FOR SAFETY. OFFICIALS SAID IT WAS AN ACCIDENT, BUT THEY GAVE NO DETAILS. SOME OF THE LARGEST SOLAR FLARES IN SEVERAL YEARS BEGAN ASSAULTING EARTH THIS WEEK. THE GIANT BLASTS FIRST ERUPTED ON VALENTINE'S DAY. THEY CARRIED MAGNETIC ENERGY THAT CAN DISRUPT COMMUNICATIONS AND SATELLITE SIGNALS. THE SUN HAD BEEN RELATIVELY QUIET FOR NEARLY FIVE YEARS. A LONG-TIME WASHINGTON JOURNALIST BILL MONROE DIED TODAY AT A WASHINGTON-AREA NURSING HOME. HE BECAME WASHINGTON BUREAU CHIEF FOR NBC NEWS IN 1961. AND, HE HOSTED "MEET THE PRESS" ON NBC FROM 1975 TO 1984, INTERVIEWING A LONG LIST OF POLITICAL FIGURES. BILL MONROE WAS 90 YEARS OLD. THOSE ARE SOME OF THE DAY'S MAJOR STORIES. NOW, BACK TO JIM.

>> Lehrer: NOW TWO TAKES ON THE FALLOUT FROM BUDGET PRESSURES ON STATE GOVERNMENTS. FIRST, A HUGE BATTLE IN WISCONSIN BETWEEN THE GOVERNOR AND PUBLIC SECTOR WORKERS RAY SUAREZ HAS THE STORY.

>> Reporter: INSIDE... AND OUTSIDE, TENS OF THOUSANDS OF LOUD, IMPASSIONED PROTESTERS HAVE THRONGED THE STATE CAPITOL IN MADISON ALL WEEK LONG. THE CROWDS ARE MADE UP OF SCHOOL TEACHERS, SOCIAL WORKERS, PRISON GUARDS, FIREFIGHTERS. WISCONSIN STATE EMPLOYEES FACE THE LOSS OF THEIR RIGHTS TO COLLECTIVE BARGAINING.

>> I HAVE MY DREAM JOB. I'M A PASSIONATE TEACHER. I DON'T KNOW WHAT I'LL DO. I HAVEN'T EVEN ALLOWED MYSELF TO CONSIDER THAT.

>> Reporter: THE NEW GOVERNOR, REPUBLICAN SCOTT WALKER, INTRODUCED THE LEGISLATION A WEEK AGO SAYING IT WAS NECESSARY TO HELP CLOSE THE STATE'S BUDGET DEFICIT OVER THE NEXT TWO YEARS. WITH REPUBLICANS IN CONTROL OF THE LEGISLATURE, THE MEASURE HAD A SPEEDY PATH UNTIL NOW.

>> IT'S UNCONVENTIONAL. WE'RE AT A POINT OF CRISIS. WE'VE GOT AN ECONOMIC AND FISCAL CRISIS IN THIS STATE AND WE NEED LEADERS WHO ARE GOING TO STAND UP AND LOOK AT THINGS DIFFERENTLY THAN WHAT WE'VE DONE IN THE PAST.

>> Reporter: REPUBLICAN LEADERS CONTEND THE CHANGES WOULD SAVE WISCONSIN $30 MILLION BY JULY AND $300 MILLION OVER THE NEXT TWO YEARS.

>> THE LAST THING WE WANT TO DO TO BALANCE THIS NEXT BUDGET WHICH HAS A $3.6 BILLION DEFICIT IN IT IS BALANCE IT ON THE BACKS OF MIDDLE CLASS TAXPAYERS WITH HIGHER TAXES THAT WOULD DRIVE PEOPLE AND JOBS OUT OF THE STATE OF WISCONSIN.

>> WALKER'S TELLING US TO TAKE ONE FOR THE TEAM. HE'S NOT ASKING EVERYONE TO TAKE ONE FOR THE TEAM.

>> Reporter: OUTSIDE YESTERDAY, VARIOUS GROUPS RALLIED IN THE COLD NIGHT AIR IN AN ATTEMPT TO STOP THE BILL'S PROGRESS. AMONG THEM, MARY BELL, HEAD OF THE WISCONSIN EDUCATION ASSOCIATION COUNCIL, A TEACHER'S UNION.

>> THIS IS NOT ABOUT PROTECTING OUR PAY AND OUR BENEFITS. IT'S ABOUT PROTECTING OUR RIGHT TO COLLECTIVELY BARGAIN.

>> Reporter: THE PROTESTS HAVE LED TO SCHOOL CANCELLATIONS THROUGHOUT THE STATE BECAUSE A HIGH PERCENTAGE OF TEACHERS HAVE CALLED IN SICK, ESPECIALLY IN MADISON. JUST BEFORE MIDNIGHT, A JOINT FINANCE COMMITTEE PASSED THE GOVERNOR'S BILL ON A PARTISAN VOTE.

>> WE DON'T HAVE A LOT OF OPTIONS HERE, FOLKS. IT'S NOT LIKE WE'RE CHOOSING TO DO THIS, WE'RE BROKE.

>> THIS IS PUTTING LIPSTICK ON A PIG. IT'S NOT EVEN LIPSTICK, IT'S CHAPSTICK. THERE ARE NOT, I MEAN, YOU KNOW THEY'RE THERE BUT YOU CAN'T SEE IT. IT'S PRETTY TOUGH TO FIND.

>> Reporter: TODAY, THE SENATE EXPECTED TO TAKE ACTION ON THE BILL BUT WAS FORCED INTO A TEMPORARY SUSPENSION, BECAUSE SENATE DEMOCRATS DIDN'T SHOW UP. IT'S BELIEVED THE DEMOCRATIC LAWMAKERS HAVE LEFT THE STATE. THE PROTESTS IN WISCONSIN INSPIRED SIMILAR DEMONSTRATIONS IN OHIO TODAY, AGAIN COLLECTIVE BARGAINING WAS THE ISSUE.

>> Suarez: AND WE HAVE MORE ON THIS STORY FROM OUR COLLEAGUES AT WISCONSIN PUBLIC TELEVISION. ADAM SCHRAGER IS THE STATE CAPITOL REPORTER AND HAS BEEN OUT COVERING THE PROTESTS AGAIN TODAY.

>> THE SENATOR SAYS THEY'RE PAID TO SHOW UP TO WORK AND THEY NEED TO SHOW UP TO WORK.

>> Suarez: DOES IT SEEM THE GOVERNOR WAS SURPRISED OR CAUGHT OFF GUARD BY THE VEHEMENCE OF THIS REACTION?

>> I THINK LONG-TIME OBSERVEERS IN THE CAPITOL... AND THE GOVERNOR SERVED IN THE LEGISLATURE, I DON'T THINK HAS SEEN THIS KIND OF PROTEST ACTIVITY IN THE STREETS OF MADISON FROM THE 1960s AND IT KEEPS GROWING. THEY HAD 25,000 PEOPLE OUTSIDE THE CAPITAL AND INSIDE THE CAPITAL TODAY, THAT'S MORE THAN THEY HAD YESTERDAY, WHICH WAS MORE THAN THEY HAD ON TUESDAY. THESE NUMBERS KEEP GROWING AND PEOPLE KEEP COMING. IT'S CERTAINLY GROWING AND EXPECTED TO GROW EVEN MORE TOMORROW.

>> Suarez: WAS THERE ANY INDICATION IN THIS LATEST STATEMENT THAT THE GOVERNOR IS READY TO MAKE A DEAL? PERHAPS TAKE OUT SOME OF WHAT THE... IT DETRACTORS WOULD FIND THE MOST OFFENSIVE MEASURES IN THIS BILL?

>> HE SAID HE'S WILLING TO TALK WITH ANYONE AND YET HE SAID PEOPLE HAVE TO SHOW UP TO WORK IN ORDER TO BE SPOKEN TO. AND THAT WAS A VERY CLEAR POINT THAT HE MADE OVER AND OVER AGAIN IN HIS NEWS CONFERENCE THAT HE JUST COMPLETED ABOUT A HALF HOUR AGO, THAT IN ORDER FOR ANY CONVERSATIONS TO BE MADE AND TO BE HAD THAT THE ACTUAL SENATORS NEEDED TO COME BACK FROM ILLINOIS OR IOWA OR WHEREVER THEY ARE AT THIS PARTICULAR TIME

>> Suarez: CAN THE GOVERNOR COMPEL THEM AHERE? CAN HE SEND OUT THE STATE POLICE TO LOOK FOR THEM?

>> HE COULD. YOU KNOW, THE SENATE MAJORITY, THE REPUBLICANS IN THE STATE SENATE SENT OUT THE SERGEANT AT ARMS TO FIND. THEY NEED IT RIGHT NOW. THEY NEED THREE-FIFTHS OF THE MEMBERS PRESENT TO VOTE ON ANY BUDGET BILL AND RIGHT NOW IN THE STATE SENATE THAT WOULD BE 20 MEMBERS, THERE ARE 19 REPUBLICANS. SO THEY NEED TO FIND ONE DEMOCRAT AND ALL OF THE DEMOCRATS RIGHT NOW WE'VE BEEN TOLD OUT R OUT OF STATE. YOU KNOW, WHETHER THEY SEND THE STATE PATROL AFTER THEM IS CERTAINLY AN OPTION. NO ONE HAS GONE INTO EXACTLY WHAT THAT'S GOING TO LOOK LIKE. THE SENATE MAJORITY LEADER DID HINT AT THAT EARLIER TODAY BUT CERTAINLY NOTHING ALONG THOSE LINES HAS HAPPENED YET.

>> Suarez: ADAM, LET'S TAKE A CLOSER LOOK AT THE MEASURE ITSELF. WHAT WOULD ALLOW GOVERNOR WALKER TO DO THAT HE CAN'T DO RIGHT NOW?

>> WELL, FUNDAMENTALLY HE'S TRYING TO HELP BRIDGE A BUDGET DEFICIT BOTH IN THE SHORT TERM AND IN THE LONG TERM. AND HE'S LOOKING TO INCREASE STATE WORKERS' PENSION CONTRIBUTIONS. HE'S LOOKING TO INCREASE STATE AND LOCAL WORKERS' CONTRIBUTIONS TO THEIR HEALTH CARE, BUT THE PART THAT IS REALLY CHAFING EVERYBODY HERE IN WISCONSIN, AT LEAST THE PROTESTORS OUT THERE RIGHT NOW, IS THIS PART ABOUT DOING AWAY WITH THE COLLECTIVE BARGAINING RIGHT. THE GOVERNOR WILL SAY HE NEEDS TO DO THIS BECAUSE IN THE UPCOMING BIENNIAL BUDGET HE IS GOING TO BE INTRODUCING TO THE STATE NEXT WEEK, THERE'S GOING TO BE A 3.6 BILLION DOLLAR DEFICIT THAT NEEDS TO BE BRIDGES AND THE ONLY WAY AS HE CUTS OFF SOME FUNDING TO THESE LOCAL COMMUNITIES IN THE LOCAL GOVERNMENTS, THE ONLY WAY THOSE LOCAL COMMUNITIES WILL BE ABLE TO THEN BALANCE THEIR OWN BUDGET THAT HE UNTIES THEIR HANDS, SO TO SPEAK, BY REMOVING THESE COLLECTIVE BARGAINING OBLIGATIONS, IT'S IMPORTANT TO KNOW THAT NONE OF THIS IS RETROACTIVE. SO ANY CONTRACTS CURRENTLY IN PLACE AND CURRENTLY SIGNED BETWEEN LOCALLY ELECTED SCHOOL BOARDS AND TEACHERS UNIONS, FOR EXAMPLE, WILL NOT BE VOIDED. THIS IS ONLY GOING FORWARD BUT HE BELIEVES IT'S ESSENTIAL IN ORDER TO ALLOW THE STATE TO ACTUALLY BALANCE ITS BUDGET AND ALLOW THESE MUNICIPALITYS TO DO SO AS WELL WITHOUT THE KEY BEING LAYING OFF ANY WORKERS. HE THREW OUT A FIGURE TONIGHT AT HIS NEWS CONFERENCE OF UPWARDS OF AROUND 12,000 WORKERS BOTH AT THE STATE AND THE LOCAL LEVEL WHO COULD BE LAID OFF. HE SAYS IF HIS LEGISLATION DOESN'T PASS.

>> Suarez: FOR HIS PART THE GOVERNOR AND THE REPUBLICAN SPONSORS ON THE SENATE SIDE HAVE SAID THAT THIS IS NOT AN ANTI-UNION BILL, IT'S ABOUT SAVING MONEY. DID THE GOVERNOR TRY TO NEGOTIATE THESE CUTS WITH THE UNIONS BEFORE PROPOSING A MEASURE THAT WOULD TAKE AWAY THEIR COLLECTIVE BARGAINING RIGHTS?

>> NEGOTIATION IS THE 2-T KEY WORD THAT WE HAVE HEARD FROM A LOT OF THE UNION SUPPORTERS WHO HAVE BEEN PROTESTING IS THAT THEY DON'T FEEL... THEY WERE ASKED TO PARTICIPATE IN THIS CONVERSATION. NOW, GOVERNOR WALKER WILL SAY HE'S BEEN TALKING ABOUT THIS ON THE CAMPAIGN TRAIL FOR MONTHS AND ANYONE WHO WAS PAYING ATTENTION KNEW THIS WAS THE PLAN THAT HE WAS GOING TO IMPLEMENT WERE THOUGH WIN THE ELECTION IN NOVEMBER. BUT PRIMARILY WHAT WE'RE HEARING FROM THE PROTESTORS OUT THERE AND THE DEMOCRATIC LAW MAKERS IN THE STATE SENATE AND ASEMI-SBLI THAT THEY WERE NOT GIVEN THE OPPORTUNITY TO WEIGH IN ON THIS. WE'RE HEARING TIME AND AGAIN FROM... AND YOU QUOTED THE LEADER OF THE WISCONSIN TEACHERS' UNION IN YOUR PIECE LEADING UP TO THIS INTERVIEW AND HOW THEY ARE SAYING THIS IS NOT ABOUT SACRIFICING WAGES, THIS IS NOT ABOUT SACRIFICING PENSIONS, THIS IS NOT EVEN ABOUT INCREASING HEALTH CARE COSTS, THIS IS FUNDAMENTALLY, THEY WOULD ARGUE, ABOUT THE RIGHT TO COLLECTIVELY BARGAIN WHICH THEY FEEL THEY HAVE NOT HAD AN OPPORTUNITY TO NEGOTIATE ON.

>> Suarez: WELL, HAVING SAID THAT, DO STATE EMPLOYEES' UNION CONCEDES THAT BECAUSE OF THE CRISIS IN WISCONSIN THERE HAS TO BE SOME KIND OF DIFFERENT RELATIONSHIP WITH THE STATE GOVERNMENT, THEIR EMPLOYER?

>> I DON'T KNOW THAT ANYBODY IS CONTRADICTING THE CONCEPT OF PAYING MORE, OF SACRIFICING, IF YOU WILL, FROM THE WORK FORCE PERSPECTIVE. THE BIGGEST PRO TEST STATION HAS BEEN ABOUT THE LACK OF THE NEGOTIATION. IT'S INTERESTING TO PUT THIS IN HISTORICAL PERSPECTIVE. WISCONSIN WAS THE HOME, MADISON WAS THE HOME IN 1936 OF THE AFSCME, THE FIRST PUBLIC SERVICE WORKERS' UNION. IN 1959 GAYLORD NELSON WHO EVERYBODY KNOWS IS THE FATHER OF EARTH DAY, AT THAT POINT HE WAS GOVERNOR OF THE STATE OF WISCONSIN, SIGNED INTO LAW THE FIRST LAW IN THE COUNTRY THAT ALLOWED NON-FEDERAL WORKERS THE OPPORTUNITY TO COLLECTIVELY BARGAIN. WE ARE HEARING ON THE STREET IT IS PEOPLE WHO ARE PROTESTING THIS ARE MOST ANGRY THAT THEY DON'T FEEL THAT THEY'VE HAD AN OPPORTUNITY TO NEGOTIATE THIS WITH THE GOVERNOR.

>> Suarez: ARE SOME STATE WORKERS EXEMPT FROM THE PROVISION THAT WOULD TAKE AWAY COLLECTIVE BARGAINING RIGHTS?

>> SOME OF THE LAW ENFORCEMENT FOLKS ARE EXEMPT AND THE GOVERNOR SAYS HE HAS EXEMPTED THEM SPECIFICALLY BECAUSE THE STATE CANNOT AFFORD A STRIKE, SAY, BY PLACE OR A STRIKE, SAY, BY FIREFIGHTERS. SO HE HAS EXEMPTED THEM FROM THIS MEASURE. RAY FLAY THE MEANTIME, HAS IT STARTED TO SHOW IN WISCONSIN THAT SOME STATE WORKERS AREN'T COMING TO WORK?

>> WELL, YOU SEE THE CROWDS HAVE CONTINUED TO GROW. YOU KNOW, WHETHER OR NOT THERE HAVE BEEN SIGNIFICANT CALL INS, SPECIFICALLY AT THE SCHOOL LEVELS, MADISON IS THE SECOND-LARGEST SCHOOL DISTRICT IN THE STATE OF WISCONSIN AND IT HAS TAKEN A SECOND STRAIGHT DAY WITHOUT CLASSES FOR STUDENTS BECAUSE THERE HAVE BEEN TOO MANY TEACHERS THEY HAVE CALLED IN SICK. THERE WERE A NUMBER OF DISTRICTS FROM AROUND THE STATE THAT ALSO SIMILARLY CANCELED CLASSES TODAY. IT'S GOING TO BE INTERESTING TO SEE, THE CALL WENT OUT FROM THE STATEWIDE TEACHERS' UNION LAST NIGHT TO COME DOWN TO THE CAPITAL BOTH THURSDAY AND FRIDAY IT WILL BE INTERESTING TO SEE. THEY ARE PROMISING LARGER CROWDS DOWN HERE TOMORROW. IT WILL BE INTERESTING TO SEE WHETHER IT CONTINUES TO GROW.

>> Suarez: ADAM SCHRAGER, WISCONSIN PUBLIC TELEVISION, THANKS FOR JOINING US.

>> Brown: AND WE TURN TO OTHER STATES AND ANOTHER BUDGET BATTLE. THIS ONE OVER MEDICAID FUNDING. "NEWSHOUR" HEALTH CORRESPONDENT BETTY ANN BOWSER REPORTS.

>> Reporter: IN CALIFORNIA, PROTESTERS MARCHED TO THE STATE CAPITOL TO DEMAND NO MORE CUTS TO MEDICAID. IT CAME ON THE HEELS OF THIS BLUNT MESSAGE FROM THE STATE'S NEWLY ELECTED GOVERNOR JERRY BROWN:

>> WHAT I PROPOSE WILL BE PAINFUL. IT'S GOING TO TAKE SACRIFICE.

>> Reporter: AND IN ALBANY NEW YORK, THERE WAS THIS GRIM ASSESSMENT FROM ANOTHER NEWLY ELECTED GOVERNOR-- ANDREW CUOMO.

>> THIS YEAR'S MEDICAID BUDGET-- LAST YEAR, STATE SPENDING ON MEDICAID WAS ABOUT $14 BILLION. IT WILL GO UP TO $18 BILLION. NEW YORK STATE IS FUNCTIONALLY BANKRUPT.

>> Reporter: GOVERNORS ACROSS THE COUNTRY ARE DESPERATELY LOOKING FOR WAYS TO FILL THE HOLE CREATED BY A NATIONAL TOTAL OF $125 BILLION IN STATE DEFICITS. MOST ARE REQUIRED BY LAW TO BALANCE THEIR BUDGETS, WHICH MEANS BIG CUTS IN STATE SPENDING ON ALL PROGRAMS INCLUDING MEDICAID. SO ACROSS THE COUNTRY RECIPIENTS ARE WORRIED. LAST MONTH IN IDAHO, MORE THAN A THOUSAND PEOPLE LINED UP FOR A STATE HEARING TO URGE LAWMAKERS TO REJECT CUTS TO THE DISABLED, INCLUDING JACK HANSEN.

>> I KNOW FOR FACT THAT IF YOU MAKE THESE CUTS, I WILL HAVE TO GO BACK TO A GROUP HOME. I MADE A PROMISE TO MYSELF GUYS, THAT I WOULD NOT GO BACK, NOT WITHOUT A FIGHT. I WANT YOU TO KNOW, YOU GUYS ARE MY ONLY HOPE.

>> Reporter: THERE HAVE ALREADY BEEN CUTS TO PROGRAMS IN STATES LIKE CALIFORNIA THAT HAVE AFFECTED DISABLED PEOPLE LIKE JAMES NUNEZ, WHO HAS CEREBRAL PALSY AND LEARNING DIFFICULTIES. THREE YEARS AGO WHEN WE MET NUNEZ, HE ATTENDED A STATE- FUNDED PROGRAM IN SACRAMENTO WHERE HE WAS LEARNING SKILLS TO LIVE INDEPENDENTLY. HE ALSO HAD A HOME HEALTH WORKER WHO HELPED HIM COOK AND DO LAUNDRY. WHAT DOES IT SAY ON THE INSTRUCTIONS?

>> IT SAYS 4 TO 6 CUPS OF WATER.

>> Reporter: BUT TODAY, AFTER SEVERAL ROUNDS OF BUDGET CUTS, NUNEZ HAS LOST BOTH HIS HELPER AND THE DAY PROGRAM. AND NOW, GOVERNOR BROWN WANTS TO CUT ANOTHER $1.7 BILLION FROM MEDICAID, IN PART BY LIMITING DOCTOR VISITS FOR PEOPLE LIKE NUNEZ TO TEN A YEAR.

>> WHY DO YOU WANT TO CUT US? WHY DON'T YOU CUT SOMEBODY ELSE? HOW WE GOING TO LIVE? THEY GOING GOT TAKE MY MONEY AND

>> Reporter: OFFICIALS ACROSS THE COUNTRY SAY THESE CUTS ARE NECESSARY BECAUSE THE LONG RECESSION HAS DRASTICALLY REDUCED STATE REVENUES. ARIZONA'S MEDICAID CHIEF TOM BETLACH:

>> WE'VE GOT ROUGHLY 50% OF THE MORTGAGES THAT ARE UPSIDE DOWN IN THE STATE. WE'VE GOT OVER 50,000 HOMES THAT ARE IN FORECLOSURE AS A RESULT OF LOSING ABOUT 11% OF OUR EMPLOYMENT. IT'S STILL THREE YEARS OUT AND WE'RE STILL AT THAT 11 % LOSS AND IT WILL BE YEARS BEFORE WE GET BACK TO A NORMAL OVER ALL EMPLOYMENT LEVEL.

>> Reporter: UNEMPLOYMENT HAS MEANT THOUSANDS OF PEOPLE WHO ALSO LOST THEIR HEALTH INSURANCE HAVE SIGNED UP FOR MEDICAID. DURING THE RECESSION, THE FEDERAL GOVERNMENT PROVIDED BILLIONS OF STIMULUS DOLLARS TO THE STATES TO PAY FOR THE INCREASE. BUT THAT PROGRAM EXPIRES JULY 1st AND STATES SAY THEY FEEL THE CRUSHING WEIGHT OF HIGHER MEDICAID ROLLS. HERE IN ARIZONA, STATE MEDICAID SPENDING HAS GONE FROM 17% TO 30% PERCENT OF THE BUDGET IN JUST FIVE YEARS. DURING THAT SAME PERIOD OF TIME, THE AMOUNT OF MONEY THE STATE HAD COMING IN TO PAY ITS BILLS DROPPED BY OVER A THIRD. SO OFFICIALS SAY THEY HAVE NO CHOICE NOW BUT TO MAKE MAJOR CUTS TO THE MEDICAID PROGRAM, INCLUDING DROPPING MORE THAN A QUARTER OF A MILLION PEOPLE FROM IT ALL TOGETHER. THAT INCLUDES PEOPLE LIKE 38 YEAR OLD JENNIFER KIOLBASA WHO'S EXPECTING THAT SHE WILL BE DROPPED FROM THE PROGRAM THIS FALL. SHE'S A CHILDLESS ADULT. ARIZONA IS ONE OF ONLY SEVEN STATES THAT HAD EXTENDED THEIR MEDICAID PROGRAMS TO COVER THEM. LAST YEAR KIOLBASA LOST HER JOB, HER MEDICAL INSURANCE, AND WENT THROUGH A DIVORCE. NOW, SHE SPENDS MUCH OF HER TIME ONLINE LOOKING FOR WORK FROM HER SMALL APARTMENT IN MESA. IT'S THE FIRST TIME SHE'S EVER BEEN IN THIS SITUATION.

>> I'VE BEEN PAYING TAXES FOR ALMOST TWO DECADES. I'VE BEEN WORKING, I'VE BEEN PAYING TAXES. THAT MONEY IS SUPPOSED TO BE USED TO FUND THESE PROGRAMS SO WHY SHOULDN'T I BE ALLOWED TO USE THAT AND IT SHOULDN'T MATTER THAT I DON'T HAVE ANY CHILDREN.

>> Reporter: ARIZONA OFFICIALS ARGUE THAT ELIMINATING 250,000 CHILDLESS ADULTS WOULD SAVE THE STATE $541 MILLION, CLOSING NEARLY HALF OF THE STATE'S BUDGET GAP FOR NEXT YEAR.

>> THESE ARE INCREDIBLY DIFFICULT DECISIONS. THERE COMES A POINT IN TIME WHERE YOU CAN ONLY DO SO MUCH ON THE REVENUE SIDE AND YOU HAVE TO LOOK AT WHERE YOU ARE ON OUT LAY SIDE SO THAT'S THE BALANCING ACT.

>> Reporter: DIANE ROWLAND IS A SENIOR EXECUTIVE AT THE KAISER FAMILY FOUNDATION WHO FOLLOWS MEDICAID ISSUES CLOSELY.

>> THESE ARE GRIM DAYS AT THE STATE LEVEL. THEY ARE NOT OUT OF THE RECESSION YET, THEIR REVENUES AND ECONOMIES HAVE NOT REBOUNDED BUT THEY ARE ABOUT TO LOSE THAT EXTRA BOOST THAT THE FEDERAL GOVERNMENT WAS GIVING THEM FOR THE STIMULUS FUND. SO I THINK IT'S A DIFFICULT SITUATION THIS TIME BECAUSE THEY ARE ABOUT TO FACE A CLIFF THAT THEY HAVEN'T FACED BEFORE.

>> Reporter: THERE'S ANOTHER CONSEQUENCE TO MEDICAID CUTS AS WELL. MEDICAID IS A CORNERSTONE OF HEALTHCARE REFORM. HALF OF THE 32-MILLION AMERICANS WHO WILL GET HEALTH INSURANCE UNDER THE NEW LAW WOULD BE COVERED BY MEDICAID BEGINNING IN 2014. STATES WILL GET MORE FEDERAL FUNDING THEN, TOO. BUT GIVEN THE BUDGET PRESSURES OF THE MOMENT, THE ADMINISTRATION HAS MADE SEVERAL MOVES TO ALLOW STATES TO DEAL WITH GROWING COSTS NOW. EARLIER THIS MONTH, SECRETARY SEBELIUS WROTE TO GOVERNORS OUTLINING WAYS MONEY COULD BE SAVED BY CUTTING OPTIONAL BENEFITS INCLUDING DENTAL AND VISION CARE, PRESCRIPTION DRUGS, PHYSICAL THERAPY AND RESPIRATORY SERVICES. CINDY MANN IS DEPUTY ADMINISTRATOR OF THE CENTER FOR MEDICARE AND MEDICAID SERVICES.

>> WHAT WE'RE TRYING TO MAKE CLEAR IS THAT STATES HAVE LOTS OF CHOICES AND WE ARE REALLY WANTING TO BE ABLE TO HELP THEM THINK THROUGH WHAT THOSE CHOICES ARE DETERMINE WHAT CHOICE MIGHT MAKE MOST SENSE FOR THEIR PROGRAM AND THEN TO PROCESS THAT QUICKLY FOR THEM TO THE EXTENT THAT IT'S AN ACTION THAT WE ABLE TO TAKE.

>> Reporter: BETLACH AND MEDICAID OFFICIALS IN OTHER STATES SAY THEY'RE DOING A NUMBER OF THESE THINGS ALREADY.

>> THERE'S A MENU OF ITEMS THAT ARE OFFERED IN TERMS OF THE TYPES OF CHANGES THE STATES SHOULD BE LOOKING AT IN TERMS OF THEIR PROGRAMS. BUT THESE ARE THINGS WE'VE BEEN DOING FOR A NUMBER OF YEARS, TO TRY TO MANAGE OUR RESOURCES TO THE GREATEST EXTENT POSSIBLE.

>> Reporter: THIS WEEK, THE ADMINISTRATION WENT EVEN FURTHER THAN IT HAD BEFORE. IT SAID ARIZONA OFFICIALS ARE ABLE TO LET ITS COVERAGE FOR CHILDLESS ADULTS, LIKE KIOLBASA, EXPIRE LATER THIS YEAR. ARIZONA RECENTLY MADE ANOTHER DIFFICULT AND UNPOPULAR CHOICE: IT DROPPED SOME TRANSPLANT SURGERIES FROM ITS MEDICAID PROGRAM TO SAVE MONEY. OTHER STATES ARE ALSO MAKING PAINFUL CHOICES, SAYING IT'S A MATTER OF DOLLARS AND CENTS AND THEY'RE RUNNING OUT OF BOTH.

>> Lehrer: AND NOW TO OUR CONTINUING COVERAGE OF PRESIDENT OBAMA'S BUDGET PROPOSAL UNVEILED THIS WEEK AND TO JUDY WOODRUFF.

>> Woodruff: UP WITH OF THE MOST PROMINENT CRITICISMS OF THE PRESIDENT'S BUDGET FROM FRIEND AND FOE ALIKE IS THAT IT DOES LITTLE TO ADDRESS THE LONG-TERM STRUCTURAL FISCAL PROBLEMS CONTRIBUTING TO THE NATION'S DEFICIT AND $14 TRILLION DEBT. EVEN PRESIDENT OBAMA HIMSELF ACKNOWLEDGED AT HIS NEWS CONFERENCE SUNDAY THAT MORE HAS TO BE DONE. HE SAID IT WON'T GET DONE WITHOUT BOTH PARTIES WORKING TOGETHER. OUR GUESTS ARE ATTEMPTING TO DO PRECISELY THAT. REPUBLICAN SENATOR SAX BY CHAMBLISS OF GEORGIA AND MARK WARNER, DEMOCRAT OF VIRGINIA, ARE HEADING UP AN EFFORT TO TACKLE THE HARDEST FISCAL CHALLENGES. SENATORS, THANK YOU BOTH FOR BEING WITH US. SENATOR WARNER, TO YOU FIRST. I ASSUME YOU AGREE THESE ARE THE HARDEST CHALLENGES. IF SO, WHY ARE YOU TAKING THIS ON?

>> WELL, JUDY, I THINK THE QUESTION IS NOT IF WE'RE GOING TO DO DEFICIT REDUCTION AND TAKE ON THE NATIONAL DEBT, IT'S ONLY A QUESTION OF WHEN ARE WE GOING TO DO IN THE A BIPARTISAN ORDERLY WAY THAT WILL GIVE US A FEW YEARS TO PHASE IN THESE CHANGES ROHR WE GOING TO WAIT UNTIL THE MARKETS SAY THEY NO LONGER HAVE FULL FIFTH AND CREDIT IN THE AMERICAN DEBT AND DOLLAR AND WE ARE FORCED TO DO IT THE WAY WE'VE SEEN CERTAIN EUROPEAN COUNTRIES HAVE TO TAKE ON THIS CHALLENGE. SO I THINK THE TIME IS NOW. THERE IS A PLAN THAT'S OUT THERE THAT BOTH DOES DEFICIT REDUCTION AND ACTUALLY SIMPLIFIES OUR TAX CODE AND DEALS WITH THE REVENUE SIDE OF THE LEDGER AS WELL. IT'S NOT PERFECT. THERE'S PROBABLY THINGS IN IT THAT EVERYBODY WOULD DISLIKE BUT IT'S A STARTING POINT. SENATOR CHAMBLISS AND I, WE'VE BEEN GREAT PARTNERS ON THIS, WE REALIZE THIS IS WHERE THE LONG-TERM INTERESTS OF THE COUNTRY HAVE TO TRUMP IMMEDIATE POLITICS.

>> Woodruff: SENATOR CHAMBLISS, YOU ARE MEETING IN PRIVATE. WHY ARE YOU DOING THIS OUTSIDE THE NORMAL BUDGET CHANNELS?

>> WELL, JUDY, WE DON'T KNOW WHERE WE'RE GOING TO WIND UP WITH THIS, BUT CERTAINLY MARK AND I ARE NOT GOING TO SOLVE THIS BY OURSELVES AND THAT'S WHY WE GRADUALLY EXPANDED OUR GROUP AND NOW WE'VE INVOLVED SOME FOLKS WHO FRANKLY HAVE A LOT MORE EXPERTISE AND THE DEBT COMMISSION REPORT ITSELF THAN WE DO BECAUSE THEY WERE MEMBERS OF IT. AND WE HAVE THE BENEFIT OF WHAT THEY HEARD OVER A PERIOD OF ABOUT TEN MONTHS THAT'S NOW BEING INCORPORATED INTO OUR DISCUSSIONS. AND WE'RE... WE'RE PRETTY EXCITED ABOUT THE OPPORTUNITY WE'VE GOT. BECAUSE YOU KNOW, JUDY, AT THE END OF THE DAY MARK WAS SENT HERE FROM VIRGINIA, I WAS SENT HERE BY THE PEOPLE OF GEORGIA TO GET THINGS DONE AND NOT JUST TO COME UP HERE AND VOTE AGAINST THINGS BUT TO TRY TO SOLVE PROBLEMS. THERE IS NO GREATER PROBLEM THAN THIS DEBT AND THIS DEFICIT ISSUE AND I DON'T CARE WHETHER YOU LISTEN TO ADMIRAL MULLEN... CHAIRMAN OF THE JOINT CHIEFS OR ANYBODY FROM AN ECONOMIST STANDPOINT TALK ABOUT THIS OR TALK ABOUT THE ISSUES THAT ARE FACING US. THE NUMBER-ONE ISSUE IS DEBT AND THE DEFICIT. SO WE'RE JUST TRYING TO DO THE RIGHT THINGS WHICH WHY PEOPLE SENT US HERE.

>> Woodruff: LET'S TALK ABOUT SOME SPECIFICS. SENATOR WARNER, IS THIS MAINLY A MATTER OF TURNING THE RECOMMENDATIONS OF THE SIMPSON-BOWLES DEFICIT REDUCTION COMMISSION, TURNING THAT INTO LEGISLATION?

>> WELL, IT'S TURNING THAT INTO LEGISLATION OR HAVING THAT BECOME THE CONSEQUENCES IF WE DON'T ACT. BECAUSE IN CERTAIN WAYS, IF THERE IS... AS SAXBY SAID, WE WON'T DO THIS ALONE, WE NEED THE WHITE HOUSE, THE HOUSE, THE SENATE, BOTH PARTIES AND IF THERE'S A BETTER WAY TO BOTH GET TO THESE DEFICIT REDUCTION NUMBERS, IF THERE'S A BETTER TRY ACTUALLY MAKE SURE THAT OUR TAX CODE KEEPS AMERICAN BUSINESS COMPETITIVE IN THE 21st CENTURY AND LOWERS RATES FOR INDIVIDUALS BUT TAKES ON THE TAX EXPENDITURES THEN WE IN CONGRESS OUGHT TO FIND THAT. BUT IF WE DON'T ACT, THEN WE OUGHT TO MAKE SURE THE RECOMMENDATIONS TO THE DEFICIT COMMISSION ACTUALLY TAKE EFFECT AND, YOU KNOW, ECHOING WHAT SAXBY HAS SAID, EVERYDAY THAT WE FAIL TO ACT WE HAD $4 BILLION TO OUR NATIONAL DEBT. SO IT'S NOT LIKE THIS PROBLEM IS GOING TO GET ANY BETTER IF WE PUT IT OFF FOR A COUPLE OF YEARS

>> Woodruff: SENATOR CHAMBLISS, THE "WALL STREET JOURNAL" REPORTED TODAY THE PLAN YOU'RE WORKING ON WOULD TRIGGER NEW TAXES AND BUDGET CUTS IF CONGRESS FAILS TO MEET A SET OF TIMETABLES OR MANDATORY SPENDING TARGETS AND OTHER FISCAL GOALS IS THAT ACCURATE?

>> WELL, WE HAVEN'T AGREED ON ANYTHING. WE HAVE A LOT OF ISSUES ON THE TABLE FOR DISCUSSION BUT AS MARK JUST SAID, IF DOING NOTHING IS NOT AN OPTION, THIS ISSUE'S NOT GOING AWAY, SO OUR THOUGHT HAS BEEN FROM DAY ONE THAT THE LEAST WE OUGHT TO DO IS WHAT THE DEBT COMMISSION RECOMMENDED AND WE WOULD LIKE TO PUT IN THE LEGISLATION SOME SPECIFICS THAT HOPEFULLY WE CAN AGREE TO IN A BIPARTISAN WAY. BUT IF WE'RE UNABLE TO AGREE, THEN YOU HAVE THAT FAIL SAFE OF FALLING BACK TO WHAT THE DEBT COMMISSION RECOMMENDED. THAT'S KIND OF A WAY TO KEEP EVERYBODY MOVING. WE KNOW THERE ARE GREAT IDEAS COMING FROM HOUSE MEMBERS. WE KNOW THE WHITE HOUSE HAS GOT GOOD IDEAS. AND WE'RE MOVING IN A DIRECTION OF GETTING US TO THE POINT WHERE HOPEFULLY WE CAN GET EVERYBODY TO RALLY AROUND THE DEBT COMMISSION REPORT AS THE BASIC CONCEPT THAT WE RELY ON.

>> Woodruff: SENATOR CHAMBLISS, I KNOW YOU'RE ALREADY HEARING SOME CRITICISM FROM REPUBLICANS FOR EVEN BEING PART OF A CONVERSATION ABOUT INCREASING REVENUES. I SAW GROVER NORQUIST WITH THE AMERICANS FOR TAX REFORM GROUP SENDING OUT A MEMO TODAY SAYING TO YOU YOU'RE BETRAYING YOUR TRUST WITH THE VOTERS TO EVEN BE ENGAGING IN THESE CONVERSATIONS. ARE YOU... HOW MUCH FLAK ARE YOU CATCHING FROM YOUR OWN PARTY?

>> YOU KNOW, JUDY, IT'S KIND OF INTERESTING. I'M DOING EXACTLY WHAT I SAID I WOULD DO WHEN I SIGNED THAT PLEDGE THAT I'M NOW BEING CRITICIZED ABOUT BY THIS ONE INDIVIDUAL. WHAT I SAID I WOULD DO WAS TO SEEK LOWER RATES AND WHAT MARK AND I ARE DOING IS SEEKING A PROGRAM THAT THE DEBT COMMISSION OUTLINED THAT WILL ELIMINATE SOME OF THE TAX EXPENDITURES AND BY VIRTUE OF THAT, ACCORDING TO THE RECOMMENDATION OF THE DEBT COMMISSION, 85% OF ALL THOSE SAVINGS GO TO REDUCED CORPORATE RATES AS WELL AS PERSONAL RATES. WE CAN REDUCE TAXES AT EVERY INDIVIDUAL... THAT EVERY INDIVIDUAL HAS TO PAY SIMPLY BY REFORMING THE TAX CODE. IT'S VERY, VERY COMPLICATED, IT'S OUTDATED, IT NEEDS REFORMING AND THIS IS A WAY TO DO IT AND ACTUALLY LOWER TAX RATES INSTEAD OF INCREASING. SO IT'S... YOU'RE GOING TO HAVE CRITICISM. GOSH, IF YOU MAKE ANYTHING HAPPEN IN WASHINGTON, YOU'RE GOING TO BE CRITICIZED, BUT WE' PREPARED FOR THAT.

>> Woodruff: BY THE SAME TOKEN, SENATOR WARNER, I'M SURE YOU'RE HEARING FROM DEMOCRATS WHO DON'T LIKE THE IDEA THAT YOU'RE LOOK ATING AT CUTTING ENTITLEMENTS, AT LEAST CONSIDERING IT, INCLUDING RAISING THE RETIREMENT AGE FOR WHICH PEOPLE WOULD BE ELIGIBLE TO GET SOCIAL SECURITY. HOW MUCH OF THAT ARE YOU HEARING? I'M REALLY INTERESTED TO KNOW ABOUT THE PRESIDENT. DO YOU THINK PRESIDENT OBAMA IS OPEN? ARE YOU GETTING SIGNALS? ARE YOU IN COMMUNICATION WITH THE WHITE HOUSE ABOUT ANY OF THIS?

>> LISTEN, JUDY, I THINK SAXBY AND I WILL TAKE SOME ARROWS. ONE OF THE THINGS I THINK AMERICAN PUBLIC NEEDS TO KNOW IS MOST OF OUR FIGHTS ABOUT SPENDING CUTS THAT THE CONGRESS FOCUSES ON IS ONLY ON DOMESTIC DISCRETIONARY SPENDING WHICH IS ONLY ABOUT 12% OF THE BUDGET. UNLESS WE WANT TO WHACK A LOT OF PROGRAM ACTUALLY TO SOME GOOD, YOU'VE GOT TO TAKE ON THE ENTITLEMENT ISSUES AS WELL AND I THINK THERE'S A GROWING RECOGNITION OF THAT IN BOTH PARTIES AND I DO THINK THE PRESIDENT HAS CONTINUED TO SAY HE'S OPEN TO THIS, I THINK YOU'LL SEE SOME BACK AND FORTH BETWEEN THE PRESIDENT'S APPROACH WHICH DOES ACTUALLY FREEZE DOMESTIC SPENDING AND HAS SAID HE WOULD LOOK AT ENTITLEMENTS AS WELL. BUT YOU MAY NEED SOME OF US IN THE BIPARTISAN AREA TO KIND OF GO OUT IN FRONT AND, AGAIN, TAKE SOME OF THESE INITIAL ARROWS BUT AT THE END OF THE DAY WE WON'T GET THIS DONE UNLESS THE ADMINISTRATION IS PART OF THIS LONG-TERM SOLUTION SET AND I THINK HE'LL BE THERE.

>> Woodruff: AND SENATOR CHAMBLISS, ARE YOU GETTING POSITIVE SIGNALS FROM THE REPUBLICAN LEADERSHIP? THE SENATE? AND WHAT'S THE TIMETABLE FOR THIS? HOW QUICK CAN YOU GET SOMETHING DONE?

>> WE WANT TO DO IT SOONER RATHER THAN LATER BUT WE DIDN'T GET INTO THIS THINKING WE WOULD HAVE A DEADLINE OF MEETING THE C.R. TIMETABLE, THE DEBT CEILING VOTE. NONE OF THAT WAS REALLY OUR FOCUS AT THE TIME WE STARTED THESE DISCUSSIONS AND AS WE'VE GONE THROUGH IT. SO WE'RE GOING TO MAKE SURE WE GET IT RIGHT, JUDY, AND HOWEVER LONG IT TAKES US, MARK AND I ARE COMMITTED TO MAKE SURE THAT WE DO THE RIGHT THING. MY LEADERSHIP HAS BEEN APPRISED OF THESE CONVERSATIONS FROM DAY ONE, AS MARK HAS BEEN IN TOUCH WITH HIS LEADERSHIP. THE DISCUSSIONS HAVE BEEN IN PRIVATE SIMPLY BECAUSE WE DIDN'T WANT MEDIA EXPOSURE OUT THERE. WE WANTED TO BE ABLE TO GET PEOPLE TO SIT IN A ROOM AROUND THE TABLE AND DISCUSS THE MOST SERIOUS ISSUE FACING THE UNITED STATES OF AMERICA AND DO IN THE A VERY SOBER AND A WAY WHICH DIDN'T INVITE THE MEDIA TO LOOK AT IT UNTIL WE WERE REALLY TO THE POINT TO WHERE WE COULD START GETTING INTO THE SPECIFICS OF IT.

>> Woodruff: WELL, SENATORS, WHEN YOU ARE READY TO SAY MORE WE WOULD WELCOME YOU BACK ON THE PROGRAM. SENATOR CHAMBLISS, SENATOR WARNER, THANK YOU BOTH.

>> THANK YOU VERY MUCH, JUDY.

>> Brown: FINALLY TONIGHT, ANOTHER FRONT ON THE MEXICAN DRUG WAR, THE DEADLY STRUGGLE THAT HAS TAKEN MORE THAN 30,000 LIVES IN THE PAST FOUR YEARS. FROM A TOWN IN NORTHERN MEXICO, BILL NEELY OF "INDEPENDENT TELEVISION NEWS" HAS OUR REPORT.

>> Reporter: SHE'S 21. THIS IS HER FIRST JOB, ONE OF THE MOST DANGEROUS IN MEXICO. MAR SOLE VELEZ IS THE NEW POLICE CHIEF OF ONE OF HER COUNTRY'S DEADLIEST AREAS. SHE GOT THE CALL BECAUSE POLICEMEN IN HER TOWN WERE BEING MURDERED BY DRUG GANGS. MOST QUIT. SHE WAS A CRIMINOLOGY STUDENT, SO SHE TOOK THE JOB. "I'M DOING IT IN THE HOPE OF A BETTER MORE PEACEFUL LIFE FOR MY TOWN, FOR MY SON." ARE YOU SCARED FOR YOUR OWN LIFE? "I AM AFRAID" SHE SAYS "LIKE EVERYONE HERE AND I TAKE PRECAUTIONS BUT HOPE IS STRONGER THAN FEAR." SHE HAS GOOD REASON TO BE AFRAID. RIVAL DRUG CARTELS KILL EACH OTHER AND ANYONE WHO GETS IN THEIR WAY. IF THEY CAN'T CONTROL A STREET, THEY BURN IT. WHOLE NEIGHBORHOODS OF MARISOL'S TOWN ARE DESERTED. SHE COMMANDS A FORCE OF TEN OFFICERS. THEY HAVE TWO POLICE CARS. BULLET HOLES POCKMARK HER OFFICE. ON THE DOOR, PICTURES OF MISSING MEN PRESUMED MURDERED. MANY PEOPLE IN MEXICO SAY YOU'RE CRAZY TO TAKE THIS JOB. "I DON'T THINK OF MYSELF AS CRAZY" SHE SAYS. "MY PLAN IS NOT TO CONFRONT THE CARTELS. I'M NOT EVEN ARMED. WE'RE TRYING A GENTLER APPROACH." KEEPING AN EYE ON HER, MEXICAN TROOPS. THEY FIGHT THE DRUG CARTELS WHO KILL FOR CONTROL OF THE ROADS TO TEXAS AND THE LUCRATIVE U.S. MARKET. CARTELS WHO KILLED MANY WOMEN NEARBY. IN THIS TOWN, TOO, THERE IS A WOMAN POLICE CHIEF IN HER 20s-- OR AT LEAST THERE WAS, UNTIL SHE WAS KIDNAPPED BY ARMED MEN JUST BEFORE CHRISTMAS. SHE HASN'T BEEN SEEN SINCE. THE MEN WHO APPOINTED MARISOL VELEZ BELIEVE SHE'LL BE SAFE. ISN'T IT IRRESPONSIBLE TO PUT HER IN THIS JOB?

>> I DON'T THINK SO BECAUSE...

>> Reporter: IT'S A DANGEROUS JOB.

>> YES, BUT IT'S A DANGEROUS JOB FOR ALL OF PEOPLE WHO WORK AT PUBLIC ADMINISTRATIONS.

>> Reporter: IF THE DRUG CARTELS WANT TO SEND A MESSAGE, THEY WILL TRY TO KILL HER, WON'T THEY?

>> IT'S A RISK. BUT SOMEONE HAS TO DO THIS JOB.

>> Reporter: BEHIND HER, THE GUN CABINET SHE KEEPS EMPTY AND THE BULLET-PROOF JACKET SHE WON'T WEAR. "IT'S TOO BIG FOR ME ANYWAY" SHE JOKES. SOME CALL HER THE BRAVEST WOMAN IN MEXICO. SHE SAYS SHE'S JUST LUCKY TO HAVE A GREAT JOB. SHE MAY NEED ALL THAT LUCK IN HER THREE YEARS AS CHIEF OF POLICE.

>> Brown: WE'LL HAVE MORE OF BILL NEELY'S REPORTS ABOUT MEXICO'S DRUG WARS IN THE COMING DAYS.

>> Lehrer: AGAIN, THE MAJOR DEVELOPMENTS OF THE DAY: THE CAPITAL OF BAHRAIN WAS UNDER MILITARY LOCKDOWN AFTER RIOT POLICE SMASHED THE PROTESTERS' MAIN CAMP. AT LEAST FIVE PEOPLE WERE KILLED AND SCORES MORE WERE HURT. U.S. OFFICIALS VOICED STRONG CONCERN OVER THE CRACKDOWN. SECRETARY OF STATE CLINTON CALLED FOR THE VIOLENCE TO END. AND IN WISCONSIN, THOUSANDS OF PEOPLE PROTESTED AGAIN, OVER REPUBLICAN EFFORTS TO STRIP PUBLIC EMPLOYEES OF COLLECTIVE BARGAINING RIGHTS. AND TO HARI SREENIVASAN, FOR WHAT'S ON THE "NEWSHOUR" ONLINE. HARI?

>> Sreenivasan: ON THE MEDICAID STORY, A "NEWSHOUR" EXCLUSIVE-- THROUGH A SPECIAL DATA ANALYSIS, WE ARE POSTING STATE-BY-STATE GRAPHICS THAT DETAIL THE PROJECTED RISE IN THE PROGRAM'S COSTS FOR THE COMING YEAR. FOR EXAMPLE, OREGON EXPECTS ITS MEDICAID COSTS TO JUMP 87% OR MORE THAN A BILLION DOLLARS SINCE 2010. HOW DOES YOUR STATE STACK UP? FIND OUT ONLINE ON OUR RUNDOWN BLOG. AND AN UPDATE ON THE BATTLE BETWEEN MAN AND MACHINE PROFILED BY SCIENCE CORRESPONDENT MILES O'BRIEN EARLIER THIS WEEK. THE SUPERCOMPUTER KNOWN AS WATSON DEFEATED ITS HUMAN CHALLENGERS ON THE GAME SHOW "JEOPARDY" LAST NIGHT. YOU CAN WATCH MILES' STORY, HIS MATCH AGAINST WATSON AND MORE PLUS, HOW DO HIBERNATING BLACK BEARS MANAGE TO GO DORMANT FOR AS MANY AS SEVEN MONTHS? A NEW STUDY HAS DETAILS ON THE UNIQUE WAYS THEIR METABOLISMS ADJUST. ALL THAT AND MORE IS ON OUR WEB SITE, newshour.pbs.org. JEFF?

>> Brown: AND THAT'S THE "NEWSHOUR" FOR TONIGHT. I'M JEFFREY BROWN.

>> Lehrer: AND I'M JIM LEHRER. WE'LL SEE YOU ON-LINE AND AGAIN HERE TOMORROW EVENING WITH MARK SHIELDS AND DAVID BROOKS, AMONG OTHERS. THANK YOU AND GOOD NIGHT. MAJOR FUNDING FOR THE PBS NEWSHOUR HAS BEEN PROVIDED BY:

>> OIL COMPANIES HAVE CHANGED MY COUNTRY.

>> OIL COMPANIES CAN MAKE A DIFFERENCE.

>> WE HAVE THE CHANCE TO BUILD THE ECONOMY.

>> CREATE JOBS, KEEP PEOPLE HEALTHY AND IMPROVE SCHOOLS.

>> ... AND OUR COMMUNITIES.

>> IN ANGOLA CHEVRON HELPS TRAIN ENGINEERS, TEACHERS AND FARMERS; LAUNCH CHILD'S PROGRAMS.

>> IT'S NOT JUST GOOD BUSINESS.

>> I'M HOPEFUL ABOUT MY COUNTRY'S FUTURE.

>> IT'S MY COUNTRY'S FUTURE.

>> YOU CAN'T MANUFACTURE PRIDE, BUT PRIDE BUILDS GREAT CARS. AND YOU'LL FIND IN THE PEOPLE AT TOYOTA, ALL ACROSS AMERICA. AND BY THE ALFRED P. SLOAN FOUNDATION. SUPPORTING SCIENCE, TECHNOLOGY, AND IMPROVED ECONOMIC PERFORMANCE AND FINANCIAL LITERACY IN THE 21ST CENTURY. 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. Captioning sponsored by MacNEIL/LEHRER PRODUCTIONS Captioned by Media Access Group at WGBH access.wgbh.org

>> Susie: BEN BERNANKE TELLS LAWMAKERS THE FEDERAL RESERVE LEARNED MANY LESSONS FROM THE FINANCIAL CRISIS, ESPECIALLY WHEN IT COMES TO BANKS.

>> THE IMPORTANCE OF BEING VERY AGGRESSIVE AND... AND NOT BEING WILLING TO ALLOW BANKS, YOU KNOW, TOO MUCH LEEWAY.

>> Susie: BERNANKE AND OTHER FINANCIAL REGULATORS UPDATE SENATORS ON HOW FIXING THE WORST ECONOMIC MESS IN DECADES IS GOING. YOU'RE WATCHING "NIGHTLY BUSINESS REPORT" FOR THURSDAY, FEBRUARY 17. THIS IS "NIGHTLY BUSINESS REPORT" WITH SUSIE GHARIB AND TOM HUDSON. "NIGHTLY BUSINESS REPORT" IS MADE POSSIBLE BY: THIS PROGRAM IS MADE POSSIBLE BY CONTRIBUTIONS TO YOUR PBS STATION FROM VIEWERS LIKE YOU. THANK YOU. Captioning sponsored by WPBT

>> Susie: GOOD EVENING, EVERYONE.