PBS NewsHour; January 13, 2012 6:00pm-7:00pm PST

Captioning sponsored by MacNEIL/LEHRER PRODUCTIONS

>> Woodruff: PRESIDENTIAL CANDIDATE MITT ROMNEY FIGHTS BACK AGAINST CRITICISM FROM FELLOW REPUBLICANS THAT HE WAS A CORPORATE TAKEOVER SPECIALIST WHO HELPED DESTROY JOBS. GOOD EVENING, I'M JUDY WOODRUFF.

>> Suarez: AND I'M RAY SUAREZ. ON THE "NEWSHOUR" TONIGHT, WE LOOK AT THE STATE OF PLAY IN THE G.O.P. RACE, EIGHT DAYS BEFORE THE FIRST IN THE SOUTH PRIMARY.

>> Woodruff: THEN, MARGARET WARNER LOOKS AT PRESIDENT OBAMA'S PROPOSAL THAT CONGRESS GIVE HIM THE AUTHORITY TO CONSOLIDATE FEDERAL AGENCIES.

>> Suarez: BETTY ANN BOWSER REPORTS ON THE CHALLENGES THAT STILL REMAIN TO FIND CURES FOR CERTAIN CANCERS EVEN WHILE NEW ADVANCES MEAN THE DISEASE CAN BE MANAGED MORE EFFECTIVELY.

>> FOR 40 YEARS IT'S KNOWN AS THE WAR ON CANCER. DOCTORS HERE AT UC CASE OF IN NORTHERN CALIFORNIA WONDER IF IT'S REALLY A WAR AND IF IT'S WINNABLE.

>> Woodruff: BINYAMIN APPLEBAUM OF THE "NEW YORK TIMES" SIFTS THROUGH NEWLY RELEASED TRANSCRIPTS SUGGESTING THE FEDERAL RESERVE BANK MISSED EARLY WARNING SIGNS OF THE COLLAPSE OF THE HOUSING BUBBLE AND SUBSEQUENT FINANCIAL CRISIS.

>> Suarez: PLUS MARK SHIELDS AND DAVID BROOKS ANALYZE THE WEEK'S NEWS.

>> Woodruff: THAT'S ALL AHEAD ON TONIGHT'S "NEWSHOUR." MAJOR FUNDING FOR THE PBS NEWSHOUR HAS BEEN PROVIDED BY: 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.

>> Woodruff: THE REPUBLICAN PRESIDENTIAL FRONTRUNNER, CAMPAIGNING IN SOUTH CAROLINA, STEPPED UP HIS DEFENSE AGAINST FELLOW GOP ATTACKS ON HIS RECORD IN BUSINESS. THIS, AS THE POLITICAL WARS INTENSIFIED ON THE STATE'S TELEVISION AIRWAVES.

>> MITT ROMNEY HELPED CREATE AND RAN A COMPANY THAT INVESTED IN STRUGGLING BUSINESSES, STARTED NEW ONES, AND REBUILT OLD ONES, CREATING THOUSANDS OF JOBS. THOSE ARE THE FACTS.

>> Woodruff: THAT TV COMMERCIAL BEGAN AIRING AS MITT ROMNEY CAMPAIGNED ACROSS SOUTH CAROLINA TODAY. IT'S A FULL-THROATED DEFENSE OF HIS TIME RUNNING A PRIVATE EQUITY FIRM, AND AN EFFORT TO REBUKE RIVALS WHO'VE PAINTED HIM AS A CORPORATE RAIDER.

>> WE EXPECTED THE OBAMA ADMINISTRATION TO PUT FREE MARKETS ON TRIAL, BUT AS THE WALL STREET JOURNAL SAID, MR. ROMNEY'S G.O.P. OPPONENTS ARE EMBARRASSING THEMSELVES BY TAKING THE OBAMA LINE.

>> Woodruff: INDEED, THE ATTACKS BY RICK PERRY AND NEWT GINGRICH, IN PARTICULAR, HAVE DRAWN DISAPPROVAL THIS WEEK FROM VOICES INSIDE AND OUTSIDE THE REPUBLICAN PARTY. BUT A GROUP BACKING GINGRICH-- WINNING OUR FUTURE-- AIRED ITS OWN AD IN SOUTH CAROLINA, ON ROMNEY'S TENURE AT BAIN CAPITAL IN THE 1980s AND '90s.

>> MITT ROMNEY BECAME C.E.O. OF BAIN CAPITAL THE DAY THE COMPANY WAS FORMED. THEY FIRE, THEY CUT BENEFITS, THEY SELL ASSETS.

>> MITT ROMNEY, THEM GUYS, THEY DON'T CARE WHO I AM.

>> LET'S LOOK DEEPER IN HIS LIFE. WHAT DID HE DO WHEN HE WAS THE C.E.O. OF THIS HOLDING COMPANY?

>> Woodruff: THIS MORNING, A "WASHINGTON POST" FACT-CHECKER DUBBED THAT AD HIGHLY MISLEADING, AND GINGRICH URGED WINNING OUR FUTURE TO FIX THE SPOT AND THE FILM IT'S BASED ON.

>> I CAN'T COMMUNICATE DIRECTLY, BUT CALLING ON THE SUPER PAC TO EDIT EVERY MISTAKE OR PULL THE FILM. SOMEONE RUNNING FOR PRESIDENT NEEDS TO BE ABLE TO SAY WHEN IT'S WRONG THAT IT'S WRONG.

>> Woodruff: SOME OF ROMNEY'S COMPETITORS EITHER BACKED OFF THEIR BAIN CRITIQUES, OR PIVOTED TO OTHER LINES OF ATTACK. FORMER PENNSYLVANIA SENATOR RICK SANTORUM SAID ROMNEY'S REAL PROBLEM IS AN INABILITY TO CONNECT WITH VOTERS.

>> I DON'T CRITICIZE AND I WON'T CRITICIZE HIS WORK AT BAIN CAPITAL. I BELIEVE IN CAPITALISM, I BELIEVE IN FREE ENTERPRISE, AND PRIVATE EQUITY FIRMS ARE A VERY IMPORTANT PART OF THE FREE MARKET SYSTEM IN THIS COUNTRY. BUT, THAT DOESN'T NECESSARILY MEAN YOU WANT YOUR BOSS RUNNING FOR PRESIDENT.

>> Woodruff: FORMER UTAH GOVERNOR JON HUNTSMAN ALSO ACCUSED ROMNEY OF BEING OUT OF TOUCH AT A SOUTH CAROLINA STOP ON THURSDAY.

>> WHEN YOU HAVE A CANDIDATE THAT TALKS ABOUT ENJOYMENT IN FIRING PEOPLE, TALKS ABOUT PINK- SLIPS, WHO MAKES COMMENT THAT SEEM TO BE SO DETACHED FROM THE PROBLEMS THAT AMERICANS ARE FACING TODAY. THAT MAKES YOU PRETTY MUCH UNELECTABLE.

>> Woodruff: AND PERRY, THE TEXAS GOVERNOR, DID NOT REPEAT HIS VULTURE CAPITALISM LINE DURING A MORNING STOP IN HILTON HEAD. HE DID SAY HIS OPPONENTS ALL SPEAK FOR WALL STREET OR WASHINGTON.

>> WE NEED AN OUTSIDER WHO HAS CONSISTENTLY CUT SPENDING, NOT THESE INSIDERS WHO INCREASE DEFICITS.

>> Woodruff: AND FOR THE SECOND DAY IN A ROW TEXAS CONGRESSMAN RON PAUL HELD NO PUBLIC CAMPAIGN EVENTS. BUT THE OBAMA RE-ELECTION TEAM DID WADE INTO THE BAIN DEBATE, WITH A MEMO THAT SAID: MEANWHILE, AS THE REPUBLICAN CONTENDERS GAUGED HOW TO BLUNT ROMNEY'S MOMENTUM, SOCIAL CONSERVATIVE LEADERS PLANNED TO MEET IN TEXAS THIS WEEKEND TO TALK ABOUT UNITING BEHIND SOMEONE OTHER THAN ROMNEY. LATE TODAY, A FEDERAL JUDGE IN VIRGINIA REFUSED TO ADD FOUR OF THE REPUBLICANS-- PERRY, GINGRICH, SANTORUM AND HUNTSMAN- - TO THE PRIMARY BALLOT IN VIRGINIA. HE RULED THEY DID NOT SUBMIT THE REQUIRED NUMBER OF SIGNATURES ON PETITIONS.

>> Suarez: STILL TO COME ON THE "NEWSHOUR": NEW PRESIDENTIAL AUTHORITY; FIGHTING FATAL CANCERS; INSIDE THE FED AND SHIELDS AND BROOKS. BUT FIRST, THE OTHER NEWS OF THE DAY. HERE'S KWAME HOLMAN.

>> Holman: THERE WAS NEW FALLOUT TODAY FROM A VIDEO THAT APPEARS TO SHOW U.S. MARINES URINATING ON DEAD TALIBAN FIGHTERS IN AFGHANISTAN. OFFICIALS SAID INVESTIGATORS HAVE IDENTIFIED AND INTERVIEWED THE FOUR ENLISTED MARINES SEEN ON THE VIDEO AND ALL ARE STILL IN THE SERVICE. AND THE MARINE COMMANDANT GENERAL JAMES AMOS NAMED A THREE-STAR GENERAL TO OVERSEE THE CASE. A FRESH OUTPOURING OF PROTESTERS FILLED CITIES ACROSS SYRIA TODAY. THE OPPOSITION REPORTED PRESIDENT BASHAR AL-ASSAD'S TROOPS SHOT AND KILLED AT LEAST 10 PEOPLE. UP TO 20,000 TURNED OUT IN IDLIB PROVINCE. THOUSANDS MORE DEMONSTRATED IN THE STREETS OF HAMA. AND IN HOMS, WHERE AMATEUR FOOTAGE SHOWED AN ARMORED VEHICLE IN FLAMES AFTER ALLEGEDLY BEING TARGETED BY ARMY DEFECTORS. THE GOVERNMENT OF MYANMAR HAS RELEASED SOME OF ITS MOST PROMINENT POLITICAL PRISONERS. THEY WERE AMONG SOME 650 DETAINEES WHO RECEIVED A PRESIDENTIAL PARDON TODAY, IN THE ASIAN NATION ALSO KNOWN AS BURMA. WE HAVE A REPORT NARRATED BY JOHN SPARKS OF "INDEPENDENT TELEVISION NEWS."

>> Reporter: THE FENCE IS HIGH AND THE WALLS ARE THICK, BUT TO THE SURPRISE OF MANY, THEY OPENED THE GATES AND MORE THAN A 130 POLITICAL PRISONERS WALKED OUT OF JAILS TODAY. STUDENTS AND JOURNALISTS, BLOGGERS AND ETHNIC LEADERS, RECEIVED WITH JOY-- A GREAT FLOWER-CLAD EMBRACE. "FREE ALL THE POLITICAL PRISONERS," THEY SHOUTED. HUNDREDS REMAIN IN PRISON BUT THE IS CAUSE FOR OPTIMISM HERE. THE GOVERNMENT AND THE GENERALS WHO CONTROL IT HAVE INTRODUCED REFORMS AND THIS NEWLY RELEASED ACTIVIST, SEEMS READY TO BELIEVE. "IF EVERYONE INVOLVED IN THIS PROCESS IS HONEST," SAID KHUN TUN OO, "THEN I CAN SEE A CHANCE OF IT ACTUALLY WORKING." AMONG THOSE RELEASED TODAY, A FORMER PRIME MINISTER WHO FELL OUT WITH THE HARDLINERS-- GENERAL KIN NYUN HAS BEEN UNDER HOUSE ARREST SINCE 2005. THIS IS TANE SANE-- PRESIDENT, REVIEWING THE TROOPS A FEW DAYS AGO. MANY FEARED HIM AS THE NEXT MILITARY STRONGMAN BUT HE PROVEN HIMSELF MORE MODERATE. AND HERE'S THE EVIDENCE, THE COUNTRY'S BEST KNOWN OPPOSITION PARTY, THE NATIONAL LEAGUE FOR DEMOC REOPENING ITS HEADQUARTERS. PARTY LEADER ASSK AND HER COLLEAGUES WILL STAND IN BY- ELECTIONS DUE IN APRIL. AUNG SAN SUU KYI, GENERAL YET BURMA IS RIDDLED WITH CONFLICT ETHNIC GROUPS LIKE THE KAREN HAVE LONG FOUGHT FOR AUTONOMY-- HUNDREDS OF THOUSANDS OF PEOPLE HAVE BEEN DRIVEN FROM THEIR HOMES. YET EVEN HERE THERE IS PROGRESS WITH THESE HANDSHAKES REPRESENTATIVES FROM THE KAREN AND BURMESE GOVERNMENT AGREED A CEASEFIRE LAST NIGHT AND A POSSIBLE END TO A 62-YEAR-OLD CONFLICT.

>> Holman: IN WASHINGTON, PRESIDENT OBAMA WELCOMED THE FREEING OF THE POLITICAL PRISONERS. HE CALLED IT A SUBSTANTIAL STEP FORWARD FOR DEMOCRATIC REFORM. AND SECRETARY OF STATE HILLARY CLINTON ANNOUNCED THE U.S. NOW PLANS TO SEND AN AMBASSADOR TO MYANMAR FOR THE FIRST TIME IN TWO DECADES.

>> WE WILL IDENTIFY A CANDIDATE TO SERVE AS U.S. AMBASSADOR TO REPRESENT THE UNITED STATES GOVERNMENT AND OUR BROADER EFFORTS TO STRENGTHEN AND DEEPEN OUR TIES WITH BOTH THE PEOPLE AND THE GOVERNMENT. THIS IS A LENGTHY PROCESS AND IT WILL, OF COURSE, DEPEND ON CONTINUING PROGRESS AND REFORM.

>> Holman: CLINTON SAID SHE WILL TELEPHONE OPPOSITION LEADER AUNG SAN SUU KYI AND MYANMAR'S PRESIDENT, TANE SANE THIS WEEKEND. FORMER MISSISSIPPI GOVERNOR HALEY BARBOUR DEFENDED HIMSELF TODAY, OVER PARDONS HE GRANTED BEFORE LEAVING OFFICE THIS WEEK. BARBOUR SAID MOST OF THE MORE THAN 200 INMATES IN QUESTION HAD BEEN RELEASED BEFORE BEING PARDONED OR GRANTED OTHER CLEMENCY. AND HE SAID IT'S A TRADITION TO PARDON PRISON TRUSTEES WHO WORK AT THE GOVERNOR'S MANSION. IT'S BEEN AN UNUSUALLY WARM WINTER, SO FAR, FOR MUCH OF THE U.S., BUT THE SEASON'S FIRST MAJOR STORM ARRIVED OVERNIGHT IN THE UPPER MIDWEST. SNOWFALL RANGED FROM SIX INCHES TO MORE THAN A FOOT, MAKING ROADS TREACHEROUS AND ACCIDENTS, PLENTIFUL. IN GREEN BAY, WISCONSIN, CREWS SHOVELED OUT LAMBEAU FIELD FOR THIS WEEKEND'S NFL PLAYOFF GAME BETWEEN THE PACKERS AND THE NEW YORK GIANTS. MEANWHILE, IN ALASKA, A RUSSIAN TANKER LOADED WITH FUEL FINALLY BATTLED ITS WAY ACROSS THE ICE-COVERED BERING SEA TO NEAR NOME. TEMPERATURES THERE ARE AS LOW AS 30 DEGREES BELOW ZERO. IN ECONOMIC NEWS, STANDARD AND POORS DOWNGRADED CREDIT RATINGS FOR FRANCE AND AUSTRIA. AND, J.P. MORGAN CHASE REPORTED ITS EARNINGS FELL 23% AT THE END OF LAST YEAR. ON WALL STREET, THE DOW JONES INDUSTRIAL AVERAGE LOST NEARLY 49 POINTS TO CLOSE AT 12,422. THE NASDAQ FELL 14 POINTS TO CLOSE AT 2,710. FOR THE WEEK, THE DOW GAINED HALF A PERCENT. THE NASDAQ ROSE MORE THAN 1%. THOSE ARE SOME OF THE DAY'S MAJOR STORIES. NOW, BACK TO RAY.

>> Suarez: PRESIDENT OBAMA TODAY SAID HE WANTS FAST TRACK AUTHORITY TO CONSOLIDATE FEDERAL AGENCIES. HE CALLED ON CONGRESS TO GIVE HIM THE REORGANIZATION POWER THAT NO PRESIDENT HAS HAD FOR ALMOST 30 YEARS. MARGARET WARNER HAS MORE.

>> Warner: THE PRESIDENT INVITED BUSINESS OWNERS TO THE WHITE HOUSE TO HEAR HIS PROPOSAL.

>> TODAY, I AM CALLING ON CONGRESS TO REINSTATE THE AUTHORITY THAT PAST PRESIDENTS HAVE HAD TO STREAMLINE AND REFORM THE EXECUTIVE BRANCH.

>> Warner: THAT FAST-TRACK AUTHORITY EXPIRED IN 1984, WHEN RONALD REAGAN WAS PRESIDENT. IF CONGRESS RESTORES IT, PRESIDENT OBAMA COULD PROPOSE COST-CUTTING CONSOLIDATIONS AND BE GUARANTEED AN UP-OR-DOWN VOTE WITHIN 90 DAYS.

>> THESE CHANGES WOULD HELP SMALL BUSINESS OWNERS LIKE YOU. IT WOULD ALSO HELP MEDIUM AND LARGE BUSINESSES. AND AS A CONSEQUENCE THEY WOULD HELP CREATE MORE JOBS, SELL MORE PRODUCTS OVERSEAS, GROW OUR ECONOMY FASTER, IMPROVE OUR QUALITY OF LIFE.

>> Reporter: MR. OBAMA SAID HIS FIRST CONSOLIDATION PROPOSAL WOULD MERGE SIX AGENCIES: THE BUSINESS AND TRADE FUNCTIONS OF THE COMMERCE DEPARTMENT, THE SMALL BUSINESS ADMINISTRATION, THE OFFICE OF THE U.S. TRADE REPRESENTATIVE, THE EXPORT IMPORT BANK, THE OVERSEAS PRIVATE INVESTMENT CORPORATION AND THE TRADE AND DEVELOPMENT AGENCY. THE PRESIDENT INITIALLY RAISED THE NEED FOR CONSOLIDATION DURING HIS STATE OF THE UNION ADDRESS LAST YEAR, ARGUING THAT AGENCY JURISDICTIONS HAVE ABSURDLY OVERLAPPED.

>> THE INTERIOR DEPARTMENT IS IN CHARGE OF SALMON WHILE THEY'RE IN FRESH WATER, BUT THE COMMERCE DEPARTMENT HANDLES THEM WHEN THEY'RE IN SALTWATER. AND I HEAR IT GETS EVEN MORE COMPLICATED ONCE THEY'RE SMOKED.

>> Reporter: TODAY, WHITE HOUSE OFFICIALS SAID MERGING THE TRADE AND BUSINESS AGENCIES WOULD SAVE $3 BILLION OVER TEN YEARS, AND ELIMINATE 1,000 TO 2,000 FEDERAL JOBS, THROUGH ATTRITION. REPUBLICAN LEADERS IN CONGRESS PLEDGED CAREFUL REVIEW OF HIS CONSOLIDATION IDEA, BUT ALSO EXPRESSED CAUTION. A SPOKESMAN FOR SENATE MINORITY LEADER MITCH McCONNELL SAID: AND A SPOKESMAN FOR HOUSE SPEAKER JOHN BOEHNER SAID: "WE AT THE SAME TIME, REPUBLICAN LEADERS ON THE HOUSE ENERGY AND COMMERCE COMMITTEE WELCOMED THE PRESIDENT'S PLAN, AND SAID IT SHOULD ALSO INCLUDE MEANINGFUL REGULATORY REFORM. FOR MORE ON THE PROPOSAL AND REACTION FROM THE BUSINESS COMMUNITY AND CAPITOL HILL, WE'RE JOINED BY STEVEN DENNIS, WHO COVERS THE WHITE HOUSE AND CONGRESS FOR ROLL CALL AND HANS NICHOLS, A WHITE HOUSE REPORTER FOR BLOOMBERG. WELCOME TO YOU BOTH. BEGINNING WITH YOU, STEVEN DENNIS, FILL OUT THISúJUST A LITTLE MORE FOR US. HE'S ONLY ASKING FOR TWO DIFFERENT VOTES.

>> YEAH, THE FIRST THING HE WANTS THIS IS FAST-TRACK AUTHORITY WHICH HASN'T BEEN AROUND FAIR WHILE THAT GIVES THE PRESIDENT REALLY A LOT MORE POWER TO GO TO CONGRESS AND SAY, "HERE'S MY PLAN TO REORGANIZE GOVERNMENT. I WANT A VOTE UP OR DOWN IN 90 DAYS, NO FILIBUSTERS, NO MESSING WITH IT IN COMMITTEE, NO TACKING ON ALL THESE AMENDMENTS." THE THE IDEA HERE IS WE HAVE A VERY COMPLEX GOVERNMENT. IF KEEPS GETTING MORE COMPLEX. WE HAVE MORE LAYERS ADDED TO IT AND NOTHING SEEMS TO GET KILLED AND THE PRESIDENT IS SAYING PRESIDENTS NEED THIS AUTHORITY TO CUT THROUGH THE SPECIAL INTERESTS AND OTHER GROUPS WHO COME IN AND EVERY TIME YOU HAVE A LITTLE WIT OF CUTTING IN ANY PROPOSAL, IN ANY AGENCY, SAY, HEY, WE REALLY SHOULD DELAY IT. SO THAT'S SORT OF AN INTERESTING ISSUE THAT'S GOING TO CAUSE BIPARTISAN HEARTBURN ON CAPITOL HILL, FOR OBVIOUS REASONS, BECAUSE IT TAKES THE POWER OUT OF THE HANDS OF COMMITTEE CHAIRMEN. WHENEVER YOU MESS WITH THE FILIBUSTER, ARE YOU GOING TO HAVE FOLKS UNTIL THE SENATE WHO ARE CONCERNED ABOUT THAT.

>> Warner: HANS NICHOLS, THE SECOND THING HE IS SAYING IS IF YOU ARE TO GIVE ME THIS AUTHORITY MY FIRST TARGET OF OPPORTUNITY WOULD BE THE SIX TRADE AND BUSINESS AGENCIES. IS THAT RIGHT?

>> IT'S REALLY AN EFFORT TO CONSOLIDATE THE TRADE FUNCTIONS IN THE U.S. GOVERNMENT. YOU LOOK AT SOME OF THE OTHER COUNTRIES THE U.S. COMPETES WITH IN TERMS OF EXPORTES, AND THEY HAVE THEIR ENFORCEMENT MICKANISM, WHICH WE CO, AND THEY'RE SORT OF PROMOTION MECHANISMS IN THE SAME BODY, IN THE SAME AGENCY. THAT'S IDEA HERE IS TO PUT EVERYTHING TOGETHER, HAVE ONE-STOP SHOPPING. IT'S NOT SO MUCH THE BIG CORPORATIONS THAT THIS IS INTENDED TO HELP. BUT IT'S THE SMALLER ONES, AND THAT'S WHY IN PART THE ADMINISTRATION, ALSO THE PRESIDENT IS ELEVATING THE SMALL BUSINESS ADMINISTRATION TO CABINET LEVEL. SO TWO BIRDS WITH ONE STONE, AT LEAST ON THAT FRONT.

>> Warner: AND HAS THE BUSINESS COMMUNITY BEEN PUSHING FOR, THIS HAS HE SAID? AND, TWO, WHAT HAS BEEN THEIR REACTION? THE REACTION SO FAR-- AT LEAST THE ONES THE PRESIDENT INVITED THERE ARE POSITIVE. THAT'S TO BE EXPECTED. THERE'S A MICHAEL DEAVER-ISH ASPECT THANP UPON THEY BRING IN SMALL BUSINESS PEOPLE, HAVE AN EVENT AND TALK ABOUT HOW THEY ARE GOG HELP THEM IN TERMS OF USTR, THERE IS SHOULD EQUITY THERE AND GROUPS MIGHT NOT BE TOTALLY EXCITED ABOUT THIS. USTR, THE AGENCY--

>> Warner: IT'S A TRADE REP.

>> YES, THIS IS A SPECIAL TRADE REP, THE U.S. OFFICE FOR TRADE REPRESENTATIVEES, IT'S A CABINET LEVEL AND IT'S VERY LENIENT AND SOME OF THE PAST REPS HAVE BEEN QUITE PLEASED WITH HOW THEY'VE GONE FORWARD AND THIS IDEA THAT THIS NIMBLE AGENCY WILL BE PART OF A LARGER ONE IS SOMETHING THEY MIGHT NOT NOT LIKE, AND SOME OF THE PEOPLE THAT HAVE BENEFITED FROM THIS U.S. TR IN THE PAST, THEY MAY BE UPSET WITH IT.

>> Warner: IN FACT, STEVEN DENNIS, THE REPUBLICAN CHAIRMAN OF THE HOUSE WAYS AND MEANS, SAID WHY SHOULD WE TAKE THIS LEAN AGENCY AND PUT IT IN SOME BUREAUCRATIC BEHEMOTH. ONE MORE SUBSTANTIVE QUESTION ABOUT WHAT HE'S PROPOSING. ARE THEY PROPOSING A REAL RESTRUCTURING OR IS THIS GOING TO BE SORT OF UNDER ONE TITLE AND ONE WEB SITE?

>> WELL, I THINK IT IS A REAL RESTRUCTURING BECAUSE YOU HAVE ALL KINDS OF THINGS THAT ARE IN THE COMMERCE DEPARTMENT RIGHT NOW, LIKE NOH, AA, WHICH DEALS WITH THE ATMOSPHERE, AND YOU'RE LIKE WHY IS THAT IN THE COMMERCE DEPARTMENT? AND THE PRESIDENT MADE THE POINT ABOUT-- WHY IS THAT IN THE COMMERCE DEPARTMENT? THE PRESIDENT SAID IT'S BECAUSE PRESIDENT NIXON DIDN'T LIKE THE INTERIOR SECRETARY AND IT SHOULD BE IN THE INTERIOR DEPARTMENT. THE MAJORITY OF THE DEPARTMENT'S BUDGET IS NOAA. THAT WILL ALL GO TO INTERIOR. BUT YOU-- EVEN ON THAT QUESTION, YOU EVEN HAD SENATOR BEGGAGE FROM ALASKA SAY, IT'S A REALLY IMPORTANT COMMERCE INDUSTRY IN ALASKA. I'M NOT SURE I LIKE THIS IDEA. IT SHOWS THERE WEATHER IT BE THE USTR, YOU HAVE BIPARTISAN OPPOSITION MERGING THAT INTO-- WHATEVER THE NEW AGENCY IS CALLED. THEY STILL DON'T HAVE A FLAME. OR YOU END UP HAVING PEOPLE SAYING EVEN THIS NOAA, A LOT OF PEOPLE IN BOTH PARTIES THINK, WHY IS THIS IN COMMERCE, YOU STILL HAVE FOLKS SAYING WELL, I DON'T WANT IT TO GET LESS FUNDING. I DON'T WANT IT TO HAVE A SMALLER IMPACT.

>> Warner: SO, HANS, GOING TO YOU, WHAT MESSAGE IS THE WHITE HOUSE TRYING TO SEND POLITICALLY WITH THIS?

>> THAT'S A VERY GOOD POINT BECAUSE WE'VE BEEN TALKING ABOUT THE SUBSTANCE OF THIS. THERE'S A VERY ELEMENT OF POLITICS AND THAT IS, THE WHITE HOUSE IS LOOKING FOR FIGHTS TO PICK WITH CONGRESS. I MEAN, BEFORE, OVER THE SPRING AND SUMMER, WHEN THEY WERE MILLING THIS AND TALKING ABOUT WHAT THEY WERE GOING TO DO, THE QUESTION THEY HAD INTERNALLY-- AND IT WAS A DEBATE REALLY-- WAS WHETHER OR NOT YOU GO BIG OR WHETHER YOU GO SMALL. IF YOU WENT SMALL YOU MIGHT BE ABLE TO GET SOMETHING THROUGH CONGRESS. NOW THE PROSPECT OF ANYTHING GETTING THROUGH CONGRESS IS SO SMALL, SO REALLY JUST-- YOU YOU KNOW, IT'S VERY DIFFICULT TO SEE HOW IT'S GOING TO HAPPEN. THEY DECIDE TO GO BIG IN PART TO SHARPEN DIFFERENCES, SHOW THE DISTINCTIONS, BECAUSE FOR THE NEXT OF 2012, FOR THE REST OF 2012, THE PRESIDENT IS CLEARLY GOING TO BE LOOKING FOR WAYS TO DISTINGUISHES HIMSELF FROM CONGRESS. THIS IS A WAY TO GET AROUND REPUBLICANS AND GET TO THE RIGHT OF THEM. I MEAN, HE'S ESSENTIALLY PROPOSING ELIMINATING THE DEPARTMENT OF COMMERCE, WHICH WE HAD HEARD DURING THE CAMPAIGN TRAIL FROM A CERTAIN GOVERNOR OF A CERTAIN STATE DOWN IN TEXAS. THIS IS A WAY FOR THEM TO GET AROUND THAT AND REALLY PICK A FIGHT AND SAY, LOOK, WE'RE FOR CONSOLIDATION. WE'RE FOR A LEANER FEDERAL GOVERNMENT.

>> ONE OF THE PROBLEMS HERE, THOUGH, IS THAT THE PRESIDENT IS GOING TO HAVE TO SELL HIS OWN PARTY ON THIS. I'VE BEEN TOLD THAT THE PRESIDENT AND THE WHITE HOUSE DIDN'T REALLY GO TO A BUNCH OF DEMOCRATIC SENATORS AND POWERFUL DEMOCRATS IN THE HOUSE AND SAY, "HEY, IS IT A GOOD IDEA THAT I'M GOING TO TAKE AWAY THE FILIBUSTER POWER, AND FILOSE REELECTION, SUDDENLY YOU'RE GOING TO BE LEFT AT THE MERCY OF POTENTIALLY A REPUBLICAN MAJORITY? THAT'S HOW THERE'S SORT OF AN INSTITUTIONAL SALES JOB THAT HE'S GOING TO HAVE TO DO.

>> Warner: BRIEFLY, ARE YOU SAYING, EVEN THE CONSOLIDATION IDEA COULD HAVE TROUBLE, NOT TO MENTION MERGING THE SIX TRADE AND BUSINESS AGENCIES?

>> THE REALITY IS ANYTHING THAT THE PRESIDENT PROPOSES THIS YEAR IS GOING TO CAUSE-- HAVE ALL KINDS OF TROUBLE GETTING THROUGH CONGRESS. BUT THIS-- THE INTERESTING THING TO ME ABOUT THIS PROPOSAL IS IS THAT THIS GIVES HIM A CHANCE TO GO ON OFFENSE ON AN ISSUE THAT HE'S BEEN PLAYING DEFENSE ON FOR THE PAST YEAR. THE SENATE HOUSE REPUBLICANS HAVE BEEN BATTERING HIM OVER THE DEFICIT AND SPENDING. HE COULD AT LEAST SAY, "LOOK, I WANT THIS AUTHORITY TO CUT SPEND, TO MAKE GOVERNMENT MORE EFFICIENT, AND LOOK WHO IS STANDING IN THE WAY, CONGRESS."

>> Warner: BRIEF FINAL WORD FROM UHANS, ABOUT THE PROSPECTS ON THE HILL.

>> VERY SMALL. JUST VERY THIN. IN PARENT BECAUSE OF THE WHITE HOUSE DID NO PREP WORK, VERY LITTLE PREP WORK ON THE HILL TO PREPARE THEM FOR THIS. IF THEY HAD BEEN SERIOUS ABOUT GETTING THIS THROUGH THEY WOULD HAVE HAD MORE INTERACTION WITH THE COMMITTEE CHAIRMEN, SO I SAY SMALL.

>> Warner: HANS NICHOLS, AND STEVEN DENNIS, THANK YOU BOTH.

>> Woodruff: NOW, THE SECOND IN OUR TWO PART SERIES ON CHANGES IN TREATING CANCER. LAST NIGHT, "NEWSHOUR" HEALTH CORRESPONDENT BETTY ANN BOWSER LOOKED AT THE EFFECTS ON CHILDHOOD CANCERS. TONIGHT, SHE EXAMINES HOW RESEARCHERS ARE TAILORING INDIVIDUAL TREATMENTS TO CURE OR MANAGE THE DISEASE IN ADULTS BY ATTACKING THE GENETIC UNDERPINNINGS.

>> Reporter: SYDNEY IS A BONE CANCER PATIENT, BUT EVEN WITH JUST THREE LEGS SHE IS STILL NO ORDINARY DOG. THE 11-YEAR-OLD YELLOW LABRADOR RETRIEVER IS PART OF A RESEARCH PROJECT UNDERWAY AT THE UNIVERSITY OF CALIFORNIA DAVIS. LIKE THOUSANDS OF PEOPLE WHO ALSO HAVE INCURABLE CANCER, SYDNEY IS TREATABLE AND WHAT RESEARCHERS LEARN FROM HER AND THE OTHER DOGS IN THE PROGRAM WILL BE USED TO PROLONG THE LIVES OF HUMANS. DR. RALPH DEVERE WHITE IS DIRECTOR OF THE DAVIS CANCER CENTER IN SACRAMENTO.

>> THEY LIVE IN OUR ENVIRONMENTS AND THEY HAVE MULTIPLE GENETIC ABNORMALITIES IN THEIR TUMORS. WE CAN BIOPSY THAT TUMOR, WE CAN IMAGE THAT TUMOR, WE MONITOR HOW THE TUMOR RESPONDS, WE CAN DO MOLECULAR ANALYSES OF THE TUMOR BEFORE TREATMENT, DURING TREATMENT AND AFTER TREATMENT. IF THE ARE CURED WE WILL THEN LOOK AT ALL OF THAT. IF THEY ARE NOT CURED BECAUSE THEY DIE AT A YOUNGER AGE IN TERMS OF LIFESPAN WE GET MORE INFORMATION AND HOPEFULLY MORE HITS IN HUMANS.

>> Reporter: IT HAS BEEN 40 YEARS SINCE THE FEDERAL GOVERNMENT PROMISED TO FIND A CURE FOR CANCER. BUT AFTER HUNDREDS OF BILLIONS OF DOLLARS HAVE BEEN SPENT ON RESEARCH. IT STILL CLAIMS MORE LIVES EVERY YEAR THAN ANYTHING EXCEPT HEART DISEASE. MODERN MEDICINE HAS LEARNED A LOT IN THOSE YEARS ABOUT WHAT CANCER IS-- THAT IT'S MANY HUNDREDS OF DISEASES, NOT JUST ONE THAT IT STARTS WHEN THE D.N.A. IN HUMAN GENES IS DAMAGED. AND THAT SOME CANCERS CAN BE CURED WHEN TREATMENTS TARGET THOSE ALTERED GENES AND STOP CELLS FROM GROWING OUT OF CONTROL. BUT PANCREATIC, COLON, LIVER, PROSTATE AND LUNG CANCER STILL KILL MORE THAN HALF A MILLION AMERICANS EVERY YEAR AND SOME FORMS REMAIN STUBBORNLY RESISTANT TO CURES. DR. DAVID GANDARA IS AN ONCOLOGIST AT U.C.-DAVIS.

>> THESE CANCERS HAVE BEEN DESCRIBED AS SMART CANCERS. THE MOLECULAR BIOLOGY IS COMPLEX FOR CONTRAST. PEDIATRIC LEUKEMIA IN CHILDREN ARE SIMPLE CANCERS. THERE MIGHT BE JUST A FEW GENES WHICH HAVE BEEN ALTERED AND THEREFORE TREATMENT IS A LOT MORE LIKELY TO HAVE AN IMPACT. BUT IF YOU HAVE A CANCER LIKE PANCREATIC OR LUNG CANCER THERE MIGHT BE HUNDREDS OF GENES THAT MIGHT BE ALTERED. THEN FIGURING OUT WHY MRS. JONES HAS TO BE TREATED DIFFERENTLY FROM MR. SMITH IS A MAJOR TASK. AND NOW WE'RE FINDING OUT JUST LIKE EVERYTHING ELSE ITS NOT AS SIMPLE AS WE THOUGHT.

>> Reporter: BUT KNOWING MORE ABOUT THE MOLECULAR NATURE OF CANCER HAS USHERED IN A NEW AGE WHERE THE DISEASE IS NO LONGER AN IMMEDIATE DEATH SENTENCE.

>> TODAY, MANY CANCERS THAT ONCE WERE FATAL ARE NOW SUCCESSFULLY TREATED. AND EVEN THOSE THAT REMAIN RESISTANT TO TREATMENT, LIKE LUNG CANCER, WHILE NOT ALWAYS CURABLE, CAN BE MANAGED FOR LONG PERIODS OF TIME.

>> Reporter: DR. GANDARA MANAGES PEOPLE WITH INCURABLE LUNG CANCER IN CLINICAL TRIALS, IT IS STILL THE DEADLIEST OF ALL CANCERS, BUT HE'S ABLE TO PROLONG LIFE BY TARGETING EACH PATIENT'S INDIVIDUAL MOLECULAR FINGERPRINT.

>> ONE PERSON'S FINGERPRINT IS DIFFERENT FROM ANOTHER'S AND IF A DOCTOR CAN USE THAT INFORMATION TO PERSONALIZE TREATMENT FOR THAT PATIENT SO THAT THEY GET THE BEST CHANCE OF GETTING A REMISSION OR A CURE FOR THEIR CANCER THEN THAT'S REALLY AN ADVANCE AND SO IT MAY BE AT THE END OF THE DAY WE CURE CANCER ONE PATIENT AT A TIME.

>> Reporter: WHEN 59-YEAR OLD LUNG CANCER PATIENT JANE COYNE CAME TO GANDARA 19 MONTHS AGO, THE CANCER HAD SPREAD TO HER BRAIN AND BONES. WERE YOU SCARED?

>> PETRIFIED. ABSOLUTELY PETRIFIED. I THOUGHT THAT WITH STAGE FOUR LUNG CANCER THAT I WAS A GONER. I HAD SEEN THE STATISTICS ONLINE AND I THINK MY CHANCES TO MAKE THROUGH THE FIRST YEAR WERE 15%. THE FIRST THING HE SAID TO ME WAS I CAN'T CURE YOU BUT I CAN MANAGE YOU.

>> Reporter: THAT MEANT USING GENETICALLY ENGINEERED MICE DEVELOPED AT the JACKSON LABORATORY IN SACRAMENTO, GANDARA SURGICALLY REMOVED SMALL PIECES OF COYNE'S TUMOR AND HAD THEM GRAFTED INTO THE ANIMALS.

>> THAT MOUSE IS DESIGNED TO ALLOW THAT PATIENTS CANCER TO GROW. WHAT THIS MEANS IS THIS IS NOT A MOUSE CANCER. IT'S A PATIENT'S CANCER, NOT ONLY IS IT A PATIENT CANCER, IT'S ONE PATIENT'S CANCER.

>> Reporter: AND AS COYNE'S TUMOR TISSUE GREW IN THE MICE, GANDARA AND HIS COLLEAGUES FOUND OUT MORE.

>> WE FOUND FROM THAT ANALYSIS THAT SHE HAD A SPECIFIC MUTATION IN HER CANCER WHICH IS MORE COMMON IN PEOPLE WHO HAVE LUNG CANCER THAT HAVE NEVER SMOKED. IT'S CALLED AN E.G.F.R. MUTATION AND THERE IS A DRUG FOR THAT. AND WE PUT HER ON IT AND SHE HAS GONE INTO A MARVELOUS REMISSION.

>> Reporter: COYNE IS THRILLED.

>> ABSOLUTELY MIRACULOUS. I MEAN, IF THERE IS ANY TIME TO HAVE THE UNFORTUNATE EXPERIENCE OF HAVING LUNG CANCER, I'M IN THE RIGHT PLACE AT THE RIGHT TIME TO BE ABLE TO HAVE A QUALITY OF LIFE AND TO EXTEND IT.

>> Reporter: BUT THE DRUG TARCEVA IS NOT A CURE.

>> IT'S A CHEMOTHERAPY DRUG AND AT SOME POINT IT'S GOING TO RUN OUT ON ME. AND AT THIS POINT IN TIME I DON'T THINK THERE IS A NEXT STEP SO INSTEAD OF TESTING THINGS ON ME THEY CAN TEST THE MICE TO SEE IF ANY NEW DRUG THERAPIES WILL BE OF HELP.

>> WHAT WE ARE HOPING TO DO IN THE MEANTIME IS OF COURSE TAKE HER CANCER THAT IS GROWING IN THE MICE AND AT JACKSON LABS AND BE ABLE TO STUDY IT MOLECULARLY AND ALSO TREAT IT IN DIFFERENT WAYS SO THAT WHEN AND IF SHE NEEDS IT WE WILL HAVE THE NEXT STEP IN HER TREATMENT.

>> Reporter: COYNE AND HER HUSBAND, ED, KNOW THAT AT SOME POINT, GANDARA MAY RUN OUT OF OPTIONS, SO SHE'S LIVING ONE DAY AT A TIME.

>> I FEEL WELL. I WAS ABLE TO HAVE A VERY GOOD QUALITY OF LIFE AND I RECENTLY WENT TO CHINA FOR TWO WEEKS WAS ABLE TO TRAVEL. I'M BACK IN THE GYM. PLAYING WITH MY GRANDCHILDREN, DOING EVERYTHING I WANT.

>> Reporter: AND WHAT ABOUT THE FUTURE?

>> YOU KNOW I DON'T ASK. I DON'T WANT TO HAVE A DATE OUT THERE. I DON'T WANT HIM TO TELL ME OH WELL THE TARCEVA MIGHT WORK FOR FIVE YEARS OR SEVEN YEARS. I REALLY DON'T WANT TO HAVE THAT NUMBER IN MY BRAIN. MY LIFE, YOU KNOW IS A DAY TO DAY, MONTH TO MONTH THING. I THINK THE THOUGHT OF DYING IS ALWAYS IN MY THOUGHTS DAILY AND YOU THINK ABOUT THAT THINGS ARE SHORT YOU KNOW AND SO YOU TAKE CARE OF WHAT YOU NEED TO TAKE CARE OF AND TAKE ADVANTAGE OF EVERY DAY THAT YOU HAVE.

>> Reporter: JANE COYNE IS ONE OF THE 20% OF CANCER PATIENTS WITH INCURABLE CANCER WHO'RE IN A CLINICAL TRIAL LIKE GANDARA'S. MOST AMERICANS DON'T HAVE ACCESS TO THIS KIND OF SOPHISTICATED TREATMENT, BUT GANDARA SEES A DAY COMING WHEN TARGETED TREATMENT WILL BE AVAILABLE ON A WIDESPREAD BASIS.

>> WHAT WE WOULD LIKE TO BE ABLE TO DO IN THE FUTURE IS A LITTLE LIKE STAR TREK WHERE A PATIENT GOES INTO A PHARMACY AND THEY SAY HERE IS MY MOLECULAR PROFILE OF MY CANCER AND THE PHARMACIST GIVE THEM A PILL THAT'S DESIGNED SPECIFICALLY FOR THEIR CANCER.

>> Reporter: EVEN WITH ALL THE PROGRESS AGAINST INCURABLE CANCERS ADVOCATES ARE STILL WORRIED ABOUT THE FUTURE BECAUSE FEDERAL FUNDING FOR IMPORTANT RESEARCH HAS BEEN DRYING UP. BUT FOR PEOPLE LIKE JANE COYNE, WHO 40 YEARS AGO WOULD HAVE HAD NO FUTURE, THEY'RE GRATEFUL FOR WHAT THEY'VE GOT.

>> Suarez: AS THE ECONOMY CLIMBS BACK FROM ONE OF THE COUNTRY'S DEEPEST RECESSIONS, IT'S NOW CLEAR THAT A DRAGGING HOUSING MARKET REMAINS A PIVOTAL PART OF THE PROBLEM. BUT BACK IN 2006, MANY ECONOMISTS DID NOT SEE BIG RISKS IN A GROWING HOUSING BUBBLE OR THE POTENTIAL BODY BLOW HOUSING COULD GIVE THE ECONOMY. YESTERDAY, WE LEARNED THE EXTENT OF THAT THINKING AT THE FEDERAL RESERVE IN 2006, ON THE CUSP OF THE CRISIS. THE INSIGHTS COME FROM NEWLY RELEASED TRANSCRIPTS, DETAILING CONVERSATIONS BETWEEN FEDERAL RESERVE CHAIRMAN BEN BERNANKE AND HIS COLLEAGUES AT THE FED BOARD OF GOVERNORS IN 2006. THEY DISCUSS THE CHANGING CONDITIONS SURROUNDING AN OVERHEATED HOUSING MARKET, BUT AS BERNANKE PUT IT THAT MARCH: BINYAMIN APPELBAUM HAS BEEN READING THESE DOCUMENTS FOR THE "NEW YORK TIMES." AND HE JOINS ME NOW. WE HAD ANYTHING BUT A SOFT LANDING, BUT WE CAN NOW SEE THESE DELIBERATION, THE TRANSPARENCY. WHAT DID YOU LEARN ABOUT THESE MEETINGS? WHAT DID YOU ELSEWHERE ABOUT THE WAY THE MEETINGS WORK.

>> WE KNEW THEY DIDN'T SEE IT COMING. WE ALL LIVED THROUGH THAT. BUT THE MINUTES SHOW THE EXTENT OF THEIR MISUNDERSTANDING OF THE HEALTH OF THE ECONOMY. THEY SHOW HOW BADLY THEY MISUNDERSTOOD THE WAY THE ECONOMY WAS WORKING, HOW BADLY THEY UNDERESTIMATE THE THE IMPACT OF THE HOUSING CRASH, AND IT SHOWS, YOU KNOW, A GROUP OF VERY INTELLIGENT, VERY THOUGHTFUL PEOPLE, YOU KNOW, TALKING ABOUT THE ECONOMIC SITUATION IN THE COUNTRY THIS A CONSIDERED WAY, EVALUATING WHAT MIGHT HAPPEN, AND HAVING A DISCUSSION THAT IT TURNS OUT IN RETROSPECT WAS FAR REMOVED IN REALITY FROM THE ACTUAL SITUATION.

>> Suarez: IT'S NOT LIKE THEY WERE TOTALLY BLIND. THEY WERE SEEING STEADY SUPPLIES OF INTELLIGENCE ABOUT WHAT WAS ANYTHING ON IN THE FIELD. HERE'S A QUOTE FROM FEDERAL RESERVE GOVERNOR SUSAN BESE. SHE SAYS A LOT OF PRIVATE MORTGAGES THAT HAD BEEN SECUREITIZED BURG THE PAST FEW YEARS HAVE MUCH MORE RISK THAN THE INVESTORS HAD BEEN FOCUSED ON BUT OFTEN THEY MOVED AHEAD AS IT THEY WEREN'T SEEING WHAT THEY WERE SEEING. CAN THEY IGNORE THE DETAILS THEY WERE GETTING? >>UN, IT'S SO STRIKING, IF YOU KEPT READING FROM THAT QUOTE WHAT YOU WILL SEE IS SHE WENT ON TO SAY BASICALLY, BUT THIS IS A SMALL PROBLEM. THE MARKET AS A WHOLE IS DOING FINE. THE OVERALL QUALITY OF THE SECURITIES IS VERY GOOD. I'M NOT WORRIED ABOUT THE HOUSING MARKET. IN FACT AT ONE POINT SHE SAID IF THERE WAS A MILD CORRECTION IN HOUSING IT WOULD BENEFIT THE ECONOMY BY MOVING RESOURCES TO HEALTHIER SECTORS OF THE ECONOMY. YOU'RE RIGHT. THEY SAW IT. THEY SAW THAT HOUSING WAS CRASHING. THEY JOKED ABOUT THE PROBLEMS HOME BUILDERS WERE HAVING IN SELLING HOMES. THEY WOULD TELL STORIES ABOUT HOME BUILDERS GIVING AWAY CARS OR DRESSING UP EMPTY PROPERTIES SO THEY LOOKED OCCUPIED AND THEY UNDERSTOOD THERE WAS A PROBLEM IN THE HOUSING MARKET. WHAT THEY DIDN'T UNDERSTAND WAS HOW IMPORTANT THE HOUSING MARKET HAD BECOME TO THE ECONOMY AS A WHOLE.

>> Suarez: EARLIER IN THE YEAR, NEW CHAIRMAN MAN BEENU CHHETRI SAID AT A MEETING, "SO FAR, WE'RE SEEING AT WORST, AN ORDERLY DECLINE IN THE HOUSING MARKET BUT THERE STILL IS, I THINK, A LOT TO BE SEEN AS TO WHETHER THE HOUSING MARKET WILL DECLINE SLOWLY OR MORE QUICKLY." DID BEN BERNANKE NOT JOIN IN THE RA-RA THAT MANY OF THE OTHER GOVERNORS AROUND THE TABLE WERE INDULGING THERE?

>> THESE TRANSCRIPTS OFFER REALLY INTERESTING LOOK AT CHAMBER NONKEY BECAUSE WHAT DOES EMERGE IN THE CONTEXT OF THE BOARD IS THE PERSON WHO SAID, HEY, THIS COULD BE WORSE THAN WE THINK. THERE IS A POSSIBILITY HERE WE'RE MISSING SOME OF THE CONSEQUENCES THAT COULD UNFOLD, SOME OF THE DAMAGE THAT COULD BE DONE TO THE REAL ECONOMY. BUT IT WAS A RELATIVE DISTINCTION. HE DID NOT SEE THE CRASH COMING. HE DID NOT WARN OF THE CONSEQUENCES THAT WOULD UNFOLD. YOU KNOW, HE HOLDS THE DISTINCTION OF BEING AMONG THAT GROUP OF PEOPLE, THE ONE MOST COGNIZANT OF THE DOWNSIDE POSSIBILITIES, BUT IT WAS A GROUP OF PEOPLE WHO WERE ALL UNAWARE OF THE CRACKS BENEATH THEIR FEET.

>> Suarez: TO BE FAIR AIR, LOT OF OTHER ECONOMISTS AT THE SAME TIME WERE TALKING ABOUT BLUE SKIES, SOFT LANDING, MODERATION IN THE EXAMINING YEARS. IT WASN'T LIKE THERE WERE JUST A BUNK OF CLODS SITTING AROUND THIS TABLE AND EVERYBODY ELSE COULD SEE IT.

>> ABSOLUTELY, THIS WAS A FAILURE TO SOME EXTENT OF THE ECONOMICS PROFESSION. MOST ECONOMISTES, IF YOU PUT THEM INTO THIS ROOM, WOULD HAVE REACHTHE SAME CONCLUSIONS AND SAID THE SAME THINGS. THIS SHHH ALWAYS BE NOTED THAT THERE WERE PEOPLE WHO WERE RIGHT, WHO SAW THIS, WHO WANDER ABOUT IT, BUT THEY WERE A MINORITY. MOST ECONOMISTS DID NOT SEE IT. BUT IT SHOULD ALSO BE SAID THAT IT MAY BE THE CASE THAT ANY OF US PUT INTO CENTER FIELD AT FENWAY PARK WOULDN'T PLAY CENTER FIELD VERY WELL, BUT WE'RE NOT ALL THE CENTER FIELDERS ON THE RED SOX. SOME PEOPLE ARE PAID TO DO THIS. THEY'RE SUPPOSED TO BE DOING IT WELL. THAT'S THE ROLE THE FEDERAL RESERVE IS SUPPOSED TO BE PLAYING AND THEY DIDN'T DO IT.

>> Suarez: THIS WAS NOT ONLY THE CUSP OF THE HOUSING CRISIS. IT WAS ALSO THE CUSP BETWEEN THE GREENSPAN ERA AND THE BERNANKE ERA. ALAN GREENSPAN PRESIDED OVER THE FIRST MEETING OF THE YEAR. NOW SECRETARY TIM GEITHNER, THEN THE HEAD OF THE FEDERAL RESERVE BANK OF NEW YORK SAID INTO THE RECORD, I'D LIKE THE RECORD TO SHOW I THINK YOU'RE PRETTY TERRIFIC, TOO, AND THINKING IN TERMS OF PROBABILITY, I THINK THE RISK THAT WE DECIDE IN THE FUTURE THAT YOU HAVE BEEN EVEN BETTER THAN WE THINK IS HIGHER THAN THE ALTERNATIVE." THE GREENSPAN REPUTATION HAS NOT MATCHED GEITHNER'S PREDICTIONS,S THAT.

>> NO, THERE ARE MANY PEOPLE WHO SUBSCRIBE TO THAT VIEW AT THIS POINT. THIS WAS A REMARKABLE SENDOFF FOR A MAN WHO WAS REGARDED AS THE ICONIC CENTRAL BANKER, THE PERSON WHO PLAYED THAT ROLE BETTER THAN MAYBE ANYONE ELSE EVER HAD. HE GUIDED THE ECONOMY THROUGH ALMOST TWO DECADES OF FAIRLY STEADY GROWTH. PEOPLE THOUGHT THE ECONOMY WAS STILL ON AN UPWARD TRAJECTORY AT THAT POINT AND HIS COLLEAGUES PRAISED HIM TO THE SKY. ONE CALLED HIM YODA-LIKE, AND ANOTHER SAID HE LEFT BEHIND FOR HIS SUCCESSOR, AN ECONOMY THAT WAS A TENNIS RACKET WITH A GIANT SWEET SPOT AND THEY THOUGHT HE HAD BEEN GREAT.

>> Suarez: ONE ASPECT OF ALL OF THIS THAT IS VERY INTERESTING IS THE DEGREE TO WHICH THESE PROFESSIONALS HOW EMESHED THE ECONOMY HAD BECOME. THEY WERE ABOUT TO UNRAVEL, WEREN'T THEY?

>> THAT'S A REMARKABLE MISTAKE FOR HIM TO HAVE MADE. THIS WAS THE GOVERNOR WHO WAS, PERHAPS, MOST CLOSELY ATTUNED TO WALL STREET, THE ONE WHO WATCHED THAT PART OF THE ECONOMY MOST CLOSELY. HE WAS A FORMER INVESTMENT BANKER. AND HAD BEEN STANDING THERE AT THAT MOMENT LOOKING INTO FINANCIAL MARKETS AND TO HAVE THOUGHT THEY WERE MORE ROBUST THAN THEY HAD EVER BEEN WHEN IN FACT THEY WERE ABOUT AS FRAGILE AS THEY'D EVER BEEN UNDERSCORES HOW DEEPLY THE FED MISUNDERSTOOD THE NATURE OF WHAT THEY WERE LOOKING AT.

>> Suarez: FOR ALL THAT EMERGES IN THESE 1200 PANGS OF TRANSCRIPT, WHAT ABOUT THE RESPONSE THAT THESE SAME PEOPLE AROUND THE TABLE LAUNCHED WHEN IT WAS CLEAR THERE WERE PROBLEMS? DID THEY STOP THE FREEFALL? DID THEY KEEP THINGS FROM GETTING WORSE?

>> YEAH, THAT'S A VERY DIFFERENT STORY AND IT'S ONE THE FED COMES OUT LOOK MUCH BETTER. I THINK A LOT OF ECONOMISTS GIVE THEM A LOT OF CREDIT FOR HAVING INTERVENED DECISIVELY, FOR HAVING MOVED REALLY STRONGLY TO ARREST THE FALL OF THE ECONOMY, TO PREVENT WHAT MANY PEOPLE WERE CONCERNED COULD BECOME THE FIRST REAL DEPRESSION IN 80 YEARS, TO HAVE PREVENTERRED THE COLLAPSE OF FINANCIAL MARKETS THROUGH A SERIES OF UNPRECEDENTED AND MASSIVE INTERVENTION. SO THIS STORY-- YOU KNOW, WE GET ONE YEAR OF TRANSCRIPTS AT A TIME. THERE ON AT LEAST A FIVE-YEAR LAG. RIGHT NOW WE'RE READING THE 2006 INSTALLMENT OF THIS STORY. NEXT YEAR WE'LL GET 2007. THE YEAR AFTER THAT, 2008. AND FRANKLY THE STORY STARTS TO LOOK A LITTLE BETTER FOR THE FED IN TERMS OF HOW THEY WERE HANDLING THE ECONOMY AS IT MOVES FORWARD.

>> Suarez: BINYAMIN APPELBAUM OF THE "NEW YORK TIMES," THANKS A LOT.

>> THANK YOU.

>> Woodruff: AND TO THE ANALYSIS OF SHIELDS AND BROOKS, SYNDICATED COLUMNIST MARK SHIELDS AND "NEW YORK TIMES" COLUMNIST DAVID BROOKS. WELCOME, GENTLEMEN. GOOD TO SEE YOU BOTH. DAVID, THREE DAYS AFTER MITT ROMNEY WON NEW HAMPSHIRE, WHAT SHAPE IS HE? HE'S BEEN TAKING SOME HEAT ON HIS FORMER BUSINESS CAREER. HOW IS HE DOING?

>> HE'S BEEN TAKE SOMETHING HEAT, AND HE HASN'T BEEN DOING PARTICULARLY WELL. HE'S BEEN TAKING HEAT ON THE ONE ISSUE I DO THINK HE IS ACTUALLY VULNERABLE ON, AND THAT'S BAIN CAPITAL. I DON'T SAY THAT ON THE MERITS. I THINK IN GENERAL BAIN CAPITAL AND PRIVATE EQUITY IN GENERAL DO A LOT MORE GOOD FOR HE ECONOMY THAN THEY DO HARM. NONETHELESS, A., THERE'S THE POLITICAL PERCEPTION. IF EVER WALL STREET AND FINANCIAL GUYS ARE OUT OF FAVOR, THIS IS THE MOMENT. AND, B., HE HAS NOT BEEN PARTICULARLY GOOD AT RESPONDING. HE HASN'T TOLD A VERY GOOD AND SWIFT STORY ABOUT WHAT BAIN DID AND HOW IT TURNED PEOPLE AROUND. HE'S HAD SOME, I THINK, OVERLY BROAD REBUTTALS-- IF YOU ATTACK BAIN, YOU'RE ATTACKING CAPITALISM. THAT'S NOT TRUE. THERE'S GOOD CAPITALISM AND THERE'S BAD CAPITALISM AND HE SHOULD REALLY HAVE A STORY TO TELL ABOUT WHAT WE DID. AND PEOPLE MAY NOT THINK HE'S OUR KIND OF CAPITALIST. THEY MIGHT LIKE THE CAPITALISTS WHO BUILD THE COMPANIES, THE STEVE JOBS KIND OF GUY, WHO YOU KNOW WHERE HE LIVES. BUT L.B.O. GUYS ARE MOVING FROM FROM COMPANY TO COMPANY.

>> Woodruff: LEVERAGED BUYOUT.

>> LEVERAGED BUYOUT PEOPLE AND THEY MAKE PEOPLE FEEL UNCOMFORTABLE. I THINK THE WHOLE BAIN ISSUE, WHILE I THINK HE'S RIGHT ON THE MERITES, IS A POLITICAL VULNERABILITY.

>> Woodruff: MARK, DOES THAT MEAN NEWT GINGRICH AND RICK PERRY HAVE BEEN SUCCESSFUL, DONE A GOOD JOB OF GOING AFTER HIM?

>> I DON'T KNOW IF THEY'VE EXPLOITED IT, JUDY, BUT THERE CERTAINLY IS A REAL PROBLEM HERE. HISTORICALLY, THE TWO PARTIES HAVE BEEN PRODUCTS AND PRISONERS OF STEREOTYPES. THE DEMOCRATS BECAUSE THEY'VE BEEN THE PARTY HISTORICALLY OF THE DOWNTRODDEN, PERHAPS THE NOT TOTALLY CIVILIZED PEOPLE HAVE DELIGHTED IN NOMINATING CANDIDATES FOR PRESIDENT WHO CAME FROM BREEDING-- FRANKLIN ROOSEVELT, ADLAI STEVENSON, JACK KENNEDY. REPUBLICANS, BEING THE PARTY OF THE WELL-BORN AND WELL-OFF AND BEING SEEN THAT WAY, LIKE TO NOMINATE CANDIDATES WHO COME FROM HUMBLE ORIGINS, WHETHER DWIGHT EISENHOWER, RICHARD NIXON, RONALD REAGAN. MITT ROMNEY WOULD BE THE WEALTHIEST CANDIDATE EVER IN THE HISTORY OF THIS COUNTRY IF HE'S NOMINATED BY THE REPUBLICAN PARTY. AND HE MADE HIS MONEY HIMSELF BUT HE MADE IT IN A WAY THAT AMERICANS DON'T UNDERSTAND. I MEAN, THERE'S NO FACE OF PRIVATE EQUITY, OTHER THAN PRIVATE HELICOPTERS AND PRIVATE VILLAS ON THE BEACH. THAT'S THE ONE SIDE OF IT. AND THEN COMPANY TOWNS WITH WORKING FAMILIES WHO HAVE LOST THEIR JOBS. AND THE STORY HAS NEVER BEEN EXPLAINED TO PEOPLE WHY THIS IS A GOOD THING, EXPENSE HE'S MADE IT HIS REDENTIAL TO RUN FOR PRESIDENT. THIS IS A MAN WHO WAS GOVERNOR OF A BLUE STATE WHO GOVERNED EFFECTIVELY WITH A LEGISLATURE OF THE OTHER PARTY. HE DOESN'T USE THAT CREDENTIAL. HE'S USED THE CREDENTIAL OF, "I'M A BUSINESS GUY, AND, THEREFORE, THIS IS--" I AGREE WITH DAVID. HE HAS NOT BEEN AGILE AND HE'S NOT BEEN CONVINCING. OH, IT'S AN ATTACK OF ENVY OR AN ATTACK ON THE CAPITALISTIC SYSTEM. THAT IS NOT THE RESPONSE. HE HAS TO ANSWER IT.

>> Woodruff: HE'S RUNNING THESE ADS NOW-- WE SHOWED A CLIP OF ONE OF THEM, DAVID. HE IS FIGHTING BACK. COULD THESE ATTACKS BY OTHER REPUBLICANS BE DOING HIM A FAVOR BY GETTING HIM IN THE PRACTICE OF DEFENDING WHAT HE DID?

>> RIGHT, I THINK HE NEEDS TO GIVE A JEREMIAH WRIGHT SPEECH. I'M NOT SURE THIS IS AS SERIOUS YET BUT IT COULD BE. IT'S CLEARLY THE CHIEF VULNERABILITY. THE WHITE HOUSE, THE OBAMA CAMPAIGN HAS ISSUED A FOUR-PAGE MEMO JUMPING ON THE CRITICISM. SO I THINK HE'S NEEDS TO GIVE A SPEECH AND SAY THIS IS WHAT I DID. THIS IS WHY IT WAS VALUABLE FOR THE COUNTRY. AS I SAY, ITS STUDIES SHOW WHEN THESE PRIVATE EQUITY FIRMS COME IN, IN GENERAL, WHAT THEY DO IS THEY DO FIRE PEOPLE WHEN THEY TAKE OVER A FIRM. OVER THE LONG RUN, BECAUSE THEY'VE IMPROVED THE HEALTH-- AND THEY HAVE EVERY INCENTIVE TO IMPROVE THE HEALTH OF A COMPANY-- THEY TEND TO INCREASE EMPLOYMENT IN THE LONG TERM. THERE ARE SOME CASES, THOUGH, WHERE THEY PILE ON THE DEBT AND TAKE OUT THE DIVIDENDS. SO THERE IS SOME BAD BEHAVIOR IN THAT INDUSTRY BUT HE NEEDS TO REALLY LAY IT OUT OVER A LENGTHY PERIOD OF TIME AND PEOPLE ACCEPT IT OR NOT.

>> Woodruff: CAN HE TURN IT INTO A POSITIVE, MARK?

>> I DON'T THINK IT'S-- I DON'T SEE IT AS A POSITIVE. HE'S A LONG WAY FROM DOING THAT, JUDY. THEY CUBBED THE RETURN OF THEIR INVESTORS. BAIN HAS BEEN ENORMOUSLY SUCCESSFUL. DAVID IS RIGHT, CASE WHERE'S THEY DID TAKE DIVIDENDS AND BIG MANAGEMENT FEES, THE COMPANIES EVENTUALLY DID GO UNDER. AND I THINK THIS IS-- THIS IS A REAL PROBLEM FOR HIM AND FOR THE REPUBLICANS IN PARTICULAR. I MEAN, THIS IS NOT A YEAR YOU WANT TO BE SEEN AS ONE OF THE 1%. IT'S GOING TO PUT GREATER PRESSURE ON HIM, ON HIS TAX RETURNS, WHICH HE HAS BEEN RELUCTANT TO REVEAL, AND I THINK IT'S GOING TO SHOW THAT HE PROBABLY PAID TAXES AND CARRIED INTEREST RATE, PRIVATE EQUITY PEOPLE, 15%, WHICH MEANS HE, A MULTI-MILLIONAIRE OF REALLY REMARKABLE DIMENSIONS, PAID TAXING AT A LOWER RATE THAN A STEEL WORKER OR SCHOOL TEACHER FIREFIGHTER. AND I THINK THAT'S, AGAIN, COMPLICATE--

>> Woodruff: IT'S A DIFFERENT RATING.

>> THAT'S RIGHT. IT'S A DIFFERENT TAX. JUST THE SAME AS WARREN BUFFET PAYS.

>> Woodruff: THE DEFENSE THAT HE CREATED 100,000 JOBS, YOU'RE SAYING THAT'S NOT GOING TO FLY.

>> I DON'T THINK THAT NUMBER IS SOLID. ALL THESE "I CREATED THIS MANY JOBS." ALL THOSE NUMBERS ARE BOGUS FOR EVERY CANDIDATE. BUT THE SENSE OF HIS COMPANY AND HIS DEALS DID DO GOOD ON NET, I THINK THAT'S A PRETTY STRONG CASE. OF COURSE HE HAD FAILURES. WHAT THE COMPANIES DO, DO IS CREATE TRADE OF DESTRUCTION, AND THERE ARE REAL LOSERS IN THESE CASES. AND HE HAS TO EXPLAIN HIS FEEL BUSINESS THAT AND HIS FEELINGS ABOUT THE EVENTUAL GAIN. HE THAT'S REALLY LAY HIMSELF OUT THERE. I SHOULD SAY, THOUGH, I THINK IT'S A VULNERABILITY. I'M NOT POSITIVE ABOUT THAT. I'LL GO TO SOUTH CAROLINA TOMORROW TO ASK AS MANY VOTERS AS I CAN WHAT DO YOU THINK OF BAIN? WE CAN SAY PEOPLE DON'T LIKE FINANCIERS AND PRIVATE EQUITY PEOPLE BUT IT'S NOT CLEAR FROM THE POLLING AND THE OTHER REPUBLICAN CANDIDATE CANDIDATESY SEEMED TO BE BACKING OFF SOME OF THIS STUFF. MAYBE THEY FOUND IT'S NOT AS FERTILE GROUND AS MAYBE SOME OF US THINK.

>> Woodruff: YOU'RE SAYING NOT A POSITIVE AMONG REPUBLICAN VOTERS IN THE PRIMARY?

>> RIGHT. AND YOU GO TO THE FALL-- AGAIN, I WAS STRUCK WITH THE WHITE HOUSE, AS I MENTIONED, THE OBAMA CAMPAIGN, ONE OF THE PEOPLE SENT OUT A FOUR-PAGE MEMORANDUM. I THOUGHT IT WAS VERY MODERATE THING COMPARED TO WHAT GINGRICH WAS UNLEASHING. FOR THE OBAMA CAMPAIGN IT'S OBVIOUSLY GOING TO BE A BIG ISSUE IN THE FALL. BUT THEY DO NOT WANT TO SEEM ANTIBUSINESS EITHER. THEY HAVE THE DOWNSIDE POTENTIAL AS WELL.

>> Woodruff: MEANWHILE, MARK, A GROUP OF SOCIAL CONSERVATIVES, EVANGELICALS ARE PUTTING TOGETHER A MEETING IN TEXAS THIS WEEKEND AND WE'RE TOLD WHAT THEY'RE DOING IS LOOKING FOR CONSERVATIVE ALTERNATIVES TO ROMNEY. WHAT--

>> YOU'RE A CANDIDATE, OKAY? AND YOU'VE BEEN AT THE ROTARY CLUB SHAKING HANDS IN IOWA. YOU'VE BEEN AT THE HARDWARE STORE IN DIXVILLE NOTCH, NEW HAMPSHIRE, AND NOW SOME PEOPLE AT A COMFORTABLE RANCH IN TEXAS ARE GOING DO DECIDE. NO, NO, DAVID YOU'RE NOT GOING TO RUN. JUDY, YOU'RE GOING TO RUN. I'M SORRY, IT'S A LITTLE LATE IN THE BALLGAME TO BE PLAYING KING MAKER. AND IT'S VERY UNSEEMLY AFTER ALL THE CANDIDATES HAVE RUN AND PUT EVERYTHING ON THE LINE. AND THEY MISSED WHAT HAPPENED IN 2008. DID THEY NOT LEARN ANYTHING FROM SOUTH CAROLINA WHEN FRED TOMP SEEN ENTRY COSTED MIKE HUCKABEE WINNING SOUTH CAROLINA AND JOHN McCAIN WON SOUTH CAROLINA AND FLORIDA THE FOLLOWING WEEK AND WON THE NOMINATION WITH IT. I DON'T UNDERSTAND--

>> THIS IS WHY OLIVER STONE AND RON PAUL ARE WRONG-- THE BACKROOM DEALS, IT'S TOO LATE TO PULL THEM OFF.

>> Woodruff: THEN WHY ARE THEY DOING IT?

>> THE CANDIDATES HAVE A DREAM, IT'S GOING TO BE ME AND ROMNEY ONE ON ONE. THEY ALL HAVE THE SAME DREAM SO NONE OF THEM ARE GETTING OUT. THEY'RE ALL WAITING FOR THE OTHER PEOPLE TO SAY, "OKAY, YOU CAN BE THE ONE-ON-ONE GUY." NONE OF THEM WANT TO GET OUT. PRESUMABLY AFTER, PROBABLY NOT EVEN AFTER SOUTH CAROLINA, MAYBE AFTER FLORIDA, THEY'LL START DROPPING OUT THEN AND IT COULD WELL BE TOO LATE.

>> THERE'S ONLY ONE CANDIDATE, OTHER THAN MITT ROMNEY, WHO INCREASED HIS VOTE BETWEEN IIA WA AND NEW HAMPSHIRE, ROB PAUL. AND AS LONG AS RON PAUL IS IN THE RACE-- SAY RON PAUL GET 20, 25%, WHICH IS ABOUT WHAT HE GETS, AND MITT ROMNEY GETS 35%, 36%. THAT'S 60% OF THE VOTE. THAT LEAVES 40% FOR PERRY, SANTORUM, GINGRICH, HUNTSMAN, YOU NAME T, TO FIGHT OVER. IS ONE OF THEM GOING TO GET 36? I DON'T THINK SO. SO THE ARITHMETIC JUST DOESN'T WORK. THEY CAN'T GET BY RON PAUL TO GET ONE ON ONE WITH MITT ROMNEY.

>> THE WHOLE THING IS CRUCIAL, EVEN IF YOU LOOK AT THE LATEST POLLS IN SOUTH CAROLINA, YOU SEE SANTORUM COMING DOWN A BIT, AND THAT VOTE IS GOING TO RON PAUL, WHICH CROSSES OUR IDEOLOGICAL CATEGORIES BUT RON PAUL IS THIS AUTHENTIC THING. HE HAS GREAT, ADS.

>> Announcer: GLIDEYOU'RE SURPRISE BIDE THAT.

>> I AM A LITTLE. I GIVE HIM CREDIT. HE BELIEVES IN HIS CAUSE. HE'S TOTALLY COMMITTED TO THE CAUSE. AND HE'S GOT A LONG-TERM VISION. AND IT'S QUITE ATTRACTIVE. IT'S ATTRACT TOUGH YOUNG PEOPLE. YOU KNOW, THERE ARE WEB ADS -- THEY'RE GROWING UP SPONTANEOUSLY ONLINE. IT'S LIKE OBAMA. THERE'S A SIMILAR SORT OF FERVOR. IT'S IS NOT AS BIG, BUT IT'S-- IT ECHOS THAT.

>> AND NEW HAMPSHIRE, THE YOUNG PEOPLE. THAT WAS THE CAMPAIGN. AND HIS PHONE BANK, IT WAS VETERANS MAKEIG THE PHONE CALL. IT WAS IMPRESS AND I HAVE ENERGETIC. NOT THAT OTHERRING DIDN'T HAVE GOOD EFFORTS AND THEY DID. BUT THE PAUL THING WAS DISTINGUISHED BY THE YOUTH.

>> Woodruff: INTERESTING, AS WE REPORTED, HE TOOK THE SECOND DAY IN A ROW--

>> HE DID.

>> Woodruff: THAT'S WHAT WORKS IN YOUR FAVOR. YOU DON'T GO OUT AND CAMPAIGN.

>> >> HE'S GOING TO NEVADA THIS WEEKEND INSTEAD OF SOUTH CAROLINA.

>> Woodruff: MONEY, A QUESTION ABOUT MONEY. THE OBAMA CAMPAIGN ANNOUNCED THEY PULLED IN $68 MILLION IN THE FOURTH QUARTER LAST YEAR. MARK, THAT SOUNDS LIKE A LOT OF MONEY, COMPARED TO WHAT-- I GUESS THE ROMNEY PEOPLE TOOK IN $24 MILLION.

>> IT DOES SOUND LIKE A LOT OF MONEY. IT IS A LOT OF MONEY. BUT IT'S NOT 2008. 2008, BARACK OBAMA HAD AN ENORMOUS SPENDING ADVANTAGE OVER JOHN McCAIN. NOW, WHAT DOES THAT MEAN? IT MEANS YOU CAN THEN DEPLOY RESOURCES TO FORCE YOUR OPPONENT TO SPEND HIS LIMITED FUNDS TO DEFEND STATES LIKE NORTH CAROLINA AND VIRGINIA INDIANA, AND INSTEAD OF SPENDING MONEY AS McCAIN SHOULD HAVE BEEN DOING IN OHIO AND FLORIDA, HE'S NOT GOING TO HAVE THAT KIND OF ADVANTAGE, THE PRESIDENT IS NOT, BECAUSE WHOEVER THE REPUBLICAN NOMINEE IS, IS GOING TO HAVE MORE THAN ENOUGH FUNDING. BECAUSE WE'RE OFF OF PUBLIC FINANCING. THE CAMPAIGN IS GOING TO BE PRIVATELY FINANCED AND THERE WILL BE MORE THAN ADEQUATE FUNDS FOR THE REPUBLICANS.

>> Announcer: DO YOU AGREE WITH THAT?

>> YEAH, I'M A SKEPTIC ABOUT MONEY IN POLITICS ANYWAY AT THE PRESIDENTIAL LEVEL. EACH MARGINAL HUNDRED MILLION DOLLARS DOESN'T MAKE A DIFFERENCE. I THINK EACH SIDE WILL BE WELL FINANCED.

>> Woodruff: ONE WON'T HAVE A HUGE ADVANTAGE?

>> ME, OBAMA HAD A HUGE ADVANTAGE LAST TIME. THEY WOULDN'T HAVE WON NORTH CAROLINA WITHOUT THAT. I'M EVEN DUBIOUS ABOUT THAT. THEY THINK IT HELPED THEM MARGINALLY. IN LOCAL ELECTIONES, A BIG MONEY GAP CAN MAKE A HUGE DIFFERENCE BUT IN A NATIONAL ELECTION WITH ALL THE FREE MEDIA, I'M DUBIOUS.

>> Woodruff: WELL, WE'RE NOT DUBIOUS ABOUT THE TWO OF YOU. WE'RE DELIGHTED TO HAVE YOU HERE EVERY FRIDAY, DAVID BROOKS, MARK SHIELD.

>> THANK YOU VERY MUCH.

>> Suarez: FINALLY TONIGHT, A HISTORY LESSON. THIS WEEK, THE AFRICAN NATIONAL CONGRESS, SOUTH AFRICA'S RULING POLITICAL PARTY, MARKED ITS 100TH ANNIVERSARY. PBS STATIONS AROUND THE COUNTRY HAVE BEGUN AIRING A NEW SERIES ABOUT THE ANC AND THE INTERNATIONAL EFFORT TO END APARTHEID. IT'S CALLED "HAVE YOU HEARD FROM JOHANNESBURG". THIS EXCERPT FOCUSES ON THE PROTESTS IN THIS COUNTRY LED BY MAJOR CIVIL RIGHTS FIGURES.

>> AND THE PLAN WAS TO REQUEST EYE MEETING WITH THE SOUTH AFRICAN AMBASSADOR AND IT WOULD HAVE TO BE PEOPLE OF STEREOTYPURE. HE WASN'T GOING TO MEET WITH JOE BLOW AND THEIR FRIENDS, SO THEY NEEDED CONGRESSMAN FORT NOTICE TO MAKE THE REQUEST.

>> WE CALLED IN ADVANCE FOR AN APPOINTMENT, AND THE AMBASSADOR SAID, "YCOME ANY TIME YOU WANT." AND WE SAID WE'D LIKE TO COME ON THANKSGIVING EVE WHEN ABC, CBS, NBC, UPI, HAVE NOTHING MUCH TO REPORT EXCEPT TURKEYS.

>> AND THEY SAW A PICKET LINE.

>> WE SPENT A COUPLE OF HOURS TALKING TO HIM. UPON AND WE SIMPLY TOLD HIM HE HAD NOT BEEN PERSUASIVE AND UNLESS YOU CALL HIM ON THE PHONE AND HE TELLS YOU HE'S GOING TO DISMANTLE APARTHEID, WE'RE GOING TO SIT IN YOUR OFFICE. IS IT HE HAD BEEN WISE, HE WOULD HAVE SAID, IT'S THANKSGIVING EVE. MY WIFE IS HOME PREPARING THE TURKEY. I CAN ALMOST SMELL THE DRESSING NOW. I'M GOING THEM. NOW, YOU CAN STAY HERE. THE CAPTURING IS RATHER SOFT. YOU CAN SLEEP ON THE FLOOR. THERE IS A WATER FOUNT INCONSISTENT HALL. HERE'S A KEY TO THE TOILET. I'LL SEE YOU TUESDAY. HE SAID, "WHAT! I'LL HAVE YOU ARRESTED."

>> THE AMBASSADOR PLAYED RIGHT INTO OUR HANDS. HE CALLED THE POLICE. THE POLICE CAME AND DRAGGED OUT CONGRESSMAN WALTER FORT NOTICE IN HANDCUFFS.

>> THE POLICE OFFICERS FROM THE DISTRICT OF COLUMBIA WERE TOLD TO ARREST THEIR CONGRESSMAN. I SAID, "DON'T WORRY. IT. YOU PUT THOSE HANDCUFFS ON ME." HE SAID, "MAKE SURE THAT YOU TAKE ME OUT OF HERE IN FRONT OF THOSE CAMERAS."

>> >> THEY WERE RELEASED ON THEIR OWN RECOGNIZANCE. IT WAS CALLED AN ACT OF MORAL WITNESS TO SOUTH AFRICA'S APARTHEID POLICY.

>> WHEN YOU ARE IN A STRUGGLE AND COMPETING OF A FORCE THAT ALSO CAN CLAIM THE ATTENTION OF THE MEDIA, CLAIM THE ATTENTION OF HISTORY, REALLY, THEN AS AN ORGANIZER, YOU HAVE TO STRATEGIZE TO OVERTAKE THAT MOMENT IN HISTORY, AND THAT IS WHAT WE TRIED TO DO. ON BEHALF OF THE PEOPLE OF SOUTH AFRICA. >

>> Suarez: "HAVE YOU HEARD FROM JOHANNESBERG" IS FEATURED ON THE PBS SERIES "INDEPENDENT LENS." PLEASE CHECK YOUR LOCAL LISTINGS FOR THE TIME.

>> Woodruff: AGAIN, THE MAJOR DEVELOPMENTS OF THE DAY: PRESIDENTIAL CANDIDATE MITT ROMNEY FOUGHT BACK AGAINST CRITICISM FROM FELLOW REPUBLICANS THAT HE WAS A CORPORATE TAKEOVER SPECIALIST WHO HELPED DESTROY JOBS. AND PRESIDENT OBAMA CALLED FOR CONSOLIDATING FEDERAL AGENCIES AND ASKED CONGRESS TO AGREE TO FAST-TRACK VOTES ON THE IDEA. AND TO KWAME HOLMAN FOR WHAT'S ON THE NEWSHOUR ONLINE. KWAME?

>> Holman: ON MOST PBS STATION, TONIGHT'S "NEED TO KNOW" FOCUSES ON THE POLITICS OF GAY MARRIAGE. FIND A LINK TO THEIR COVERAGE ON OUR HOMEPAGE. WE WRAP UP OUR SERIES ON THE SECOND ANNIVERSARY OF HAITI'S EARTHQUAKE WITH A LOOK AT WHERE ALL OF THE DEBRIS GOES. THAT'S ON OUR WORLD PAGE. ON OUR HEALTH PAGE, WE LOOK AT THE STORY OF A PEDIATRIC CANCER SURVIVOR WHOSE LIFE MIGHT CHANGE UNDER HEALTH CARE REFORM. AND ON ART BEAT, JEFF TALKS TO UKULELE VIRTUOSO JAKE SHIMABUKURO, WHO IS LEADING A RENAISSANCE OF SORTS FOR THE INSTRUMENT. ALL THAT AND MORE IS ON OUR WEB SITE: newshour.pbs.org. RAY?

>> Suarez: AND THAT'S THE "NEWSHOUR" FOR TONIGHT. ON MONDAY, WE'LL LOOK AT THE LATEST FROM THE PRESIDENTIAL CAMPAIGN TRAIL. I'M RAY SUAREZ.

>> Woodruff: AND I'M JUDY WOODRUFF. BEFORE WE GO, AN EDITOR'S NOTE. IN LAST NIGHT'S STORY ON THE PARDONS ISSUED BY FORMER MISSISSIPOPI GOVERNOR HALEY BARBOUR, WE INADVERTENTLY HAD A GRAPHIC OF THE STATE OF LOUISIANA INSTEAD OF MISSISSIPPI. WE'LL BE BONING UP ON U.S. GEOGRAPHY OVER THE WEEKEND! HAVE A NICE EVENING. THANK YOU AND GOOD NIGHT. MAJOR FUNDING FOR THE PBS NEWSHOUR HAS BEEN PROVIDED BY: ♪ ♪ MOVING OUR ECONOMY FOR 160 YEARS. BNSF, THE ENGINE THAT CONNECTS US.

>> AND BY THE BILL AND MELINDA GATES FOUNDATION. DEDICATED TO THE IDEA THAT ALL PEOPLE DESERVE THE CHANCE TO LIVE A HEALTHY PRODUCTIVE LIFE. 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