PBS NewsHour; September 13, 2011 3:00pm-4:00pm PDT

Captioning sponsored by MacNEIL/LEHRER PRODUCTIONS

>> Woodruff: TALIBAN INSURGENTS TARGETED THE U.S. EMBASSY AND NATO HEADQUARTERS IN COORDINATED ASSAULTS ON AFGHANISTAN'S CAPITAL TODAY. GOOD EVENING. I'M JUDY WOODRUFF.

>> Ifill: AND I'M GWEN IFILL. ON THE NEWSHOUR TONIGHT, WE GET THE LATEST ON THE BRAZEN ATTACK FROM PATRICK QUINN OF THE ASSOCIATED PRESS IN KABUL.

>> Woodruff: THEN WE ZERO IN ON THE PROPOSED TAX CUTS AND TAX HIKES IN PRESIDENT OBAMA'S JOB'S BILL WITH ECONOMISTS MARTIN FELDSTEIN AND AUSTAN GOOLSBEE.

>> Ifill: KWAME HOLMAN RECAPS LAST NIGHT'S FACEOFF AMONG REPUBLICAN PRESIDENTIAL HOPEFULS, WHERE FRONTRUNNER RICK PERRY CAME UNDER FIRE FROM HIS RIVALS.

>> Woodruff: RAY SUAREZ EXAMINES NEW FIGURES SHOWING A RECORD 46 MILLION AMERICANS NOW LIVE BELOW THE POVERTY LINE.

>> Ifill: AND JIM LEHRER SITS DOWN WITH JEFFREY BROWN TO REFLECT ON 20 YEARS OF MODERATING PRESIDENTIAL DEBATES.

>> THE FIRST STEP IS YOU'VE GOT TO BE PREPARED. PREPARATION MEANS NOT SO YOU CAN WRITE THE GREATEST QUESTIONS IN THE WORLD BUT SO YOU CAN LISTEN IN SOME COMFORT ZONE TO THE ANSWERS.

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

>> OKAY, LISTEN. SOMEBODY HAS GOT TO GET SERIOUS.

>> I THINK...

>> WE NEED RENEWABLE ENERGY.

>> ...RENEWABLE ENERGY IS VITAL TO OUR PLANET.

>> YOU HEAR ABOUT ALTERNATIVES, RIGHT? WIND, SOLAR, ALGAE.

>> I THINK IT'S GOT TO WORK ON A BIG SCALE. AND I THINK IT'S GOT TO BE AFFORDABLE.

>> SO, WHERE ARE THEY?

>> IT HAS TO WORK IN THE REAL WORLD. AT CHEVRON, WE'RE INVESTING MILLIONS IN SOLAR AND BIOFUEL TECHNOLOGY TO MAKE IT WORK.

>> WE'VE GOT TO GET ON THIS NOW.

>> RIGHT NOW.

>> AND BY BNSF RAILWAY. 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: IT WAS A BOLD BLITZ, A DAY-LONG SERIES OF ATTACKS IN KABUL, AFGHANISTAN. TALIBAN FIGHTERS INFILTRATED THE CITY TO STRIKE AT THE AMERICAN EMBASSY, NATO COALITION HEADQUARTERS, AND OTHER KEY BUILDINGS WITH GRENADES, MACHINE GUNS, AND EVEN SUICIDE BOMBS. NO AMERICANS WERE KILLED, BUT AT LEAST SEVEN AFGHANS DIED. WE HAVE A REPORT FROM JOHN SPARKS OF INDEPENDENT TELEVISION NEWS.

>> Reporter: THIS AFTERNOON, THE WAR IN AFGHANISTAN CAME TO THE CAPITAL. TALIBAN MILITANTS TOOK THE HIGH GROUND, A MULTI-STORY CONSTRUCTION SITE TURNED INTO A FORTRESS IN THE VERY HEART OF THE CITY. SOLDIERS TOOK POT SHOTS FROM BELOW WHILE CIVILIANS RAN FOR THEIR LIVES. THIS A SOPHISTICATED ATTACK WITH MULTIPLE TARGETS, NO ONE FELT SAFE IN KABUL. THIS SLAB OF CONCRETE AND STEEL, LOCATED BEHIND THE U.S. EMBASSY, AND NATO'S HEADQUARTERS ARE CLOSE BY. FROM HERE MILITANTS TOOK AIM WITH MACHINE GUNS AND ROCKET- PROPELLED GRENADE LAUNCHERS. THE CITY'S HEAVILY FORTIFIED DIPLOMATIC DISTRICT OFFERED RESIDENTS NO SANCTUARY. SOME WERE FORCED TO FLEE, OTHERS HID IN BUNKERS. A SCHOOL BUS WAS DESTROYED BY A FALLING GRENADE. ITS OCCUPANTS HAD LEFT THEIR BAGS BUT NOBODY WAS ON BOARD AT THE TIME. I WAS SITTING HERE WHEN THE ROCKET LANDED, SAID THIS MAN. ONE PERSON WAS INJURED. MY CAR WINDOWS WERE SMASHED. (SIRENS) OTHER TARGETS WERE ALSO ATTACKED. THE COUNTRY'S POLICE HEADQUARTERS WAS HIT BY A SUICIDE BOMBER. TODAY A TALIBAN SPOKESMAN CLAIMED RESPONSIBILITY SAYING THEY'D BEEN PLANNING THIS OPERATION FOR MONTHS. THEY ARE JUST THE LATEST IN A STRING OF ATTACKS DESIGNED TO UNDERMINE ANY SENSE OF SECURITY IN THE CITY. THIS IS NATO... THIS AS NATO HANDS OVER RESPONSIBILITY FOR SECURITY TO AFGHAN FORCES.

>> THE TALIBAN TRIED TO TEST TRANSITION, BUT THEY CAN'T STOP IT. TRANSITION IS ON TRACK. IT WILL CONTINUE.

>> Reporter: THESE PICTURES SHOW THE DEFENSE OF NATO'S HEADQUARTERS IN THE CITY. TROOPS RUSHED TO PROTECT THE PERIMETER WHILE SIRENS SOUND THE ALARM. IT SEEMS THERE ARE FEW PLACES IN THIS COUNTRY THAT THE TALIBAN CANNOT GO AND THE FEAR THAT THESE ATTACKS ARE BUT A TASTE OF GREATER CHAOS TO COME.

>> Ifill: THIS WAS THE THIRD MAJOR ATTACK IN KABUL SINCE LATE JUNE. BUT IN WASHINGTON, SECRETARY OF STATE HILLARY CLINTON SAID U.S. DIPLOMATS WILL PRESS ON.

>> THE CIVILIANS WHO SERVE ARE DEDICATED, BRAVE MEN AND WOMEN COMMITTED TO ADVANCING OUR MISSION. THEY WILL NOT BE INTIMIDATED BY THIS KIND OF COWARDLY ATTACK.

>> Ifill: FOR THE LATEST ON TODAY'S ATTACKS IN KABUL, I SPOKE TO ASSOCIATED PRESS EDITOR PATRICK QUINN A SHORT WHILE AGO IN KABUL. PATRICK QUINN, THANKS FOR JOINING US. WE UNDERSTAND THAT THE ATTACKS ARE STILL CONTINUING TONIGHT.

>> THAT'S CORRECT. A LONE GUNMAN REMAINS INSIDE THE BUILDING THAT OVERLOOKS THE U.S. EMBASSY AND CONTINUES TO FIGHT AFGHAN FORCES. AFGHAN FORCES HAVE OPENED UP WITH HEAVY MACHINE GUNS, TRACER FIRE CAN BE SEEN IMPACTING THE BUILDING. IT'S BEEN 12 HOURS SINCE AT LEAST FOUR OR FIVE TALIBAN ENTERED THAT BUILDING. 12 HOURS LATER ONE OF THEM IS STILL THERE. HE'S STILL FIGHTING AFGHAN SECURITY FORCES.

>> Ifill: PATRICK, HOW UNUSUAL IS IT THAT AN ATTACK OF THIS KIND WOULD HAPPEN IN THE DIPLOMATIC DISTRICT OF KABUL?

>> WELL, THIS ATTACK IS VERY UNUSUAL TO START WITH. IT'S PROBABLY THE MOST COMPLEX AND COORDINATED ATTACK THAT HAS EVER TAKEN PLACE IN KABUL. IT'S PROBABLY THE MOST SIGNIFICANT ATTACK THAT'S HAPPENED IN THE SO-CALLED DIPLOMATIC QUARTER. WE'VE NEVER HAD SO MANY... THERE WERE A TOTAL OF FOUR ATTACKS TODAY. THREE SUICIDE BOMBERS AND THIS ATTACK. THIS HAS NEVER HAPPEND BEFORE. THIS LEVEL OF COMPLEXITY AND COORDINATION IS EXTREME RERARE AND UP UNTIL NOW IT'S UNPRECEDENTED.

>> Ifill: WHAT DOES THIS LEVEL OF COORDINATION TELL US ABOUT WHO THE ATTACKERS ARE OR HOW SERIOUS THIS ATTACK IS?

>> WELL, THIS ATTACK IS IS SERIOUS BECAUSE ONE CAR LOADED WITH INSURGENTS MADE IT ALL THE WAY INTO THE IN... INSIDE THE SO-CALLED RING OF STEEL WHICH IS A SECURITY CORD ONAROUND THE DIPLOMATIC QUARTER. AND ONE OF THE NEIGHBORHOODS WHERE A LOT OF THE EMBASSIES ARE LOCATED. AT THE SAME TIME AT LEAST THREE SUICIDE ATTACKERS FANNED OUT ACROSS THE CITY AND CARRIED OUT OR TRIED... TWO OF THEM CARRIED OUT ATTACKS. ALL WERE KILLED, SHOT AND KILLED BY POLICE. BUT THE FIRST ATTACK AGAINST THE EMBASSY INVOLVED AT LEAST FOUR TO FIVE INDIVIDUALS WITH HEAVY WEAPONRY. THEY MANAGED TO GET WITHIN 00 METERS OF THE U.S. EMBASSY AND NATO HEADQUARTERS AND OPEN FIRE. THAT LEVEL, THAT DEGREE OF SOPHISTICATION, THE WAY THEY MANAGEDED TO GET THE WEAPONS INTO KABUL AND STAGE THIS ATTACK ALMOST SIMULTANEOUSLY ALL THE ATTACKS OCCURRED ALMOST SIMULTANEOUSLY. THIS IS UNPRECEDENTED.

>> Ifill: DOES THIS MEAN THAT THE TALIBAN, WHICH WE HAVE BEEN LED TO BELIEVE HAD BEEN SEVERELY WEAKEND IN AFGHANISTAN AND CERTAINLY IN KABUL, THAT THEY ARE STRONGER THAN WAS THOUGHT?

>> WELL, YOU HAVE TO UNDERSTAND THAT THE TALIBAN... THIS IS ALL ABOUT A BATTLE OF PERCEPTIONS THAT'S GOING ON HERE. BUT THE TALIBAN ARE MUCH MORE ORGANIZED AND CAPABLE OF CARRYING OUT THESE TYPES OF ATTACKS THAN HAS BEEN LED TO BELIEVE. DESPITE ASSURANCES THAT THE CAMPAIGN AGAINST THE TALIBAN IS BEING... IS SUCCESSFUL, THESE ATTACKS ARE OCCURRING WITH MORE AND MORE FREQUENCY. THIS IS THE THIRD ATTACK IN THREE MONTHS IN THE CAPITAL. THERE WAS AN ATTACK AGAINST THE BRITISH CONSUL OFFICE THAT RESULTED IN EIGHT DEATHS. THERE WAS AN ATTACK AGAINST THE INTER-CONTINENTAL HOTEL THAT RESULTED IN 19 DEATHS. THESE ARE SPECTACULAR ATTACKS. THEY'RE NOW BEING CARRIED OUT WITH SOMEBODY WHO DOESN'T HAVE A LEVEL OF SOPHISTICATION, ORGANIZATION AND RESOURCES.

>> Ifill: SO WHO ARE THEY?

>> WELL, THERE'S TWO GROUPS INVOLVED HERE. WE THINK THAT THE ATTACK IN KABUL WAS PROBABLY ORGANIZED BY THE HAKANI NETWORK WHICH IS SORT OF A TERROR NETWORK THAT'S BASED IN... MOSTLY IN PAKISTAN AND EASTERN AFGHANISTAN. NOW THE HAKANIS ARE DIRECTLY AFFILIATED WITH THE TALIBAN AND AL QAEDA, AS A MATTER OF FACT. SO BASICALLY WE CAN SAY THAT THIS IS IS A TALIBAN ATTACK BUT IT WAS CARRIED OUT BY THE HAKANI NETWORK WHICH IS PROBABLY THE MOST DANGEROUS NETWORK, INSURGENT AND TERRORIST NETWORK OPERATING RIGHT NOW IN AFGHANISTAN.

>> Ifill: YOU SAID EARLIER THAT THE AFGHAN FORCES WERE STILL POUNDING AWAY AT SUSPECTED INSURGENTS. WAS NATO INVOLVED IN THE COUNTERATTACK AS WELL?

>> WELL, NATO FIRED BACK. YOU HAVE TO UNDERSTAND THESE INSURGENTS WERE FIRING DIRECTLY INTO THE NATO COMPOUND. THEY WEREN'T BLOBING SHOTS AT THEM. THEY'RE JUST FIRING STRAIGHT INTO THE COMPOUND SO U.S. FORCES AND NATO FORCES SHOT BACK. AND SO DID SECURITY FORCES AT THE EMBASSY. THE ACTUAL ATTEMPT TO BREACH THE BUILDING WAS CARRIED OUT BY AFGHAN NATIONAL SECURITY FORCES WHO ACTUALLY EVEN DEPLOYED ONE OF THEIR ATTACK HELICOPTERS TO OPEN FIRE ON THE TOP FLOORS OF THIS BUILDING. NATO AND THE U.S. SUPPLIED LOGISTICS AND OPERATIONAL SUPPORT AND HAD A COUPLE OF HELICOPTERS IN THE AIR TO HELP COORDINATE. BUT AFGHAN SECURITY FORCES ARE THE ONES WHO ARE LEADING THIS EFFORT TO TAKE THAT BUILDING BACK AND BASICALLY KILL THE, YOU KNOW, WHOEVER IS LEFT IN IT.

>> Ifill: PATRICK, DO DIPLOMATS ON SITE OR INTERNATIONAL OFFICIALS BELIEVE THAT THIS IS CONNECTED... THIS NEW RASH OF ATTACKS YOU DESCRIBED ARE CONNECTED IN ANY WAY TO THE WITHDRAWAL, THE HANDOVER OF POWER IN AFGHANISTAN OR EVEN TO THE ANNIVERSARY OF THE 9/11 ATTACKS?

>> WELL, I THINK THERE'S A CONNECTION... YOU COULD PROBABLY FIND A CONNECTION TO ALL THREE. PEOPLE ON THE GROUND HERE ARE SAYING THIS IS DEFINITELY CONNECTED TO TRANSITION. THE U.S. GOVERNMENT, THE INTERNATIONAL COMMUNITY AND THE AFGHAN GOVERNMENT HAD PLACED A LOT OF FAITH IN TRANSITION. THIS IS THE, YOU KNOW, THE REPLACEMENT, THE GRADUAL REPLACEMENT OF INTERNATIONAL FORCES BY AFGHAN SECURITY FORCES. THIS HAS TO BE DONE BY 2014 WHEN ALL INTERNATIONAL COMBAT FORCES LEAVE AFGHANISTAN. THIS IS A DIRECT BLOW TO TRANSITION. NATO SECRETARY GENERAL, THE PRESIDENT OF AFGHANISTAN, THE U.S. AMBASSADOR HERE IN KABUL, YOU KNOW, ALL OF THEM SAID THAT, YOU KNOW, THIS WILL NOT DERAIL TRANSITION. SO THAT'S A VERY IMPORTANT ISSUE. LET US NOT FORGET THAT THIS ATTACK ALSO TAKES PLACE JUST TWO DAYS AFTER THE 10th ANNIVERSARY OF 9/11. A HUGE ATTACK AGAINST THE U.S. BASE SATURDAY NIGHT, 77 U.S. SOLDIERS WERE WOUNDED IN THAT ATTACK. SO, YOU KNOW, IT'S OBVIOUS THAT THE TWO... THESE EVENTS ARE LINKED BECAUSE THEY'RE MORE, YOU KNOW, WILL GIVE MORE ATTENTION TO THE SPECTACULAR NATURE OF THE ATTACKS. NOW AS FAR AS WITHDRAWAL IS CONCERNEDED, I DON'T THINK THAT THE PACE OF WITHDRAWAL WILL STOP. PRESIDENT OBAMA HAS SAID,000 TROOPS WILL LEAVE THE COUNTRY... HAS SAID THAT 33,000 TROOPS WILL LEAVE THE COUNTRY BY THE END OF NEXT SUMMER. I DON'T THINK THIS ATTACK WILL CHANGE PRESIDENT OBAMA'S MIND.

>> Ifill: PATRICK QUINN OF ASSOCIATED PRESS IN KABUL, YOU STAY SAFE. THANK YOU FOR JOINING US.

>> THANK YOU.

>> Woodruff: STILL TO COME ON THE NEWSHOUR, TAX POLICY AND JOB CREATION; THE FACEOFF AT THE TEA PARTY FORUM FOR G.O.P. CANDIDATES; THE SPIKE IN THE NUMBER OF POOR AMERICANS; AND REFLECTIONS ON PRESIDENTIAL DEBATES. BUT FIRST, THE OTHER NEWS OF THE DAY. HERE'S HARI SREENIVASAN.

>> Sreenivasan: EUROPEAN STOCKS RALLIED TODAY AMID NEW SIGNS THAT GERMANY AND FRANCE WILL ACT TO PREVENT GREECE FROM DEFAULTING ON ITS DEBT. GERMAN CHANCELLOR ANGELA MERKEL SAID HER GOVERNMENT IS USING ALL ITS TOOLS. SHE TOLD A GERMAN RADIO STATION, "IT IS OUR TOP PRIORITY TO AVOID AN UNCONTROLLED DEFAULT, BECAUSE IT WOULD HIT NOT ONLY GREECE," BUT OTHER COUNTRIES. MERKEL ALSO SPOKE WITH THE PRESIDENTS OF GREECE AND FRANCE. WALL STREET HAD A CHOPPY SESSION, BUT ENDED AHEAD ON THE DAY. THE DOW JONES INDUSTRIAL AVERAGE GAINED 44 POINTS TO CLOSE NEAR 11,106. THE NASDAQ ROSE 37 POINTS TO CLOSE AT 2532. IN IRAN, A COURT SET BAIL OF $500,000 APIECE FOR AMERICANS SHANE BAUER AND JOSH FATTAL. THEY HAD BEEN CONVICTED OF SPYING. THE TWO MEN AND A THIRD AMERICAN, SARAH SHOURD, SEEN HERE LAST YEAR, WERE ARRESTED IN JULY OF 2009, HIKING ALONG THE IRAN-IRAQ BORDER. SHOURD WAS RELEASED LAST YEAR. ALL THREE DENIED SPYING. PRESIDENT MAHMOUD AHMADINEJAD SAID BAUER AND FATTAL COULD BE FREED "IN A COUPLE OF DAYS," JUST BEFORE HE ATTENDS THE U.N. GENERAL ASSEMBLY SESSION IN NEW YORK. A NEW ROUND OF MONSOON RAINS OVERNIGHT IN PAKISTAN WORSENED A FLOODING DISASTER THAT HAS DRIVEN AT LEAST 200,000 PEOPLE FROM THEIR HOMES. IN BADIN, THE WORST-HIT AREA, BOATS RESCUED STRANDED VILLAGERS TODAY, WHILE OTHERS LINED THE MAIN ROAD CARRYING BELONGINGS AS THEY FLED. GOVERNMENT WORKERS HAVE BEEN SENT IN TO PROVIDE FOOD FOR THE DISPLACED. THE AREA WAS SEVERELY AFFECTED LAST YEAR IN PAKISTAN'S WORST FLOODING IN 80 YEARS. THERE WAS GRAPHIC NEW EVIDENCE TODAY OF THE GLOBAL DIABETES EPIDEMIC. THE INTERNATIONAL DIABETES FEDERATION ANNOUNCED ROUGHLY 366 MILLION PEOPLE WORLDWIDE NOW SUFFER FROM BOTH TYPES OF DIABETES, A FIGURE IT CALLED "STAGGERING." IT SAID 4.6 MILLION PEOPLE DIE FROM THE DISEASE EVERY YEAR-- ONE EVERY SEVEN SECONDS. AND EFFORTS TO FIGHT DIABETES COST $465 BILLION A YEAR. THE NUMBER OF CASES HAS MORE THAN DOUBLED IN THE LAST 30 YEARS, DUE IN PART TO RISING RATES OF OBESITY. THOSE ARE SOME OF THE DAY'S MAJOR STORIES. NOW, BACK TO JUDY.

>> Woodruff: NEXT, THE PRESIDENT'S JOBS PLAN, AND QUESTIONS ABOUT ITS POTENTIAL IMPACT. TONIGHT WE LOOK AT THE CENTERPIECE OF THE BILL, TAX CUTS AND TAX CREDITS. THE PRESIDENT CONTINUED TO MAKE THE CASE FOR IT TODAY, BUT LEADING REPUBLICANS ON CAPITOL HILL REMAINED SKEPTICAL. PRESIDENT OBAMA RETURNED TO THE ROAD TODAY, THIS TIME COLUMBUS, OHIO, SELLING HIS JOBS PLAN AND PUSHING REPUBLICANS TO BUY IT.

>> YESTERDAY THERE WERE SOME REPUBLICANS QUOTED IN WASHINGTON SAYING THAT EVEN IF THEY AGREE WITH THE PROPOSALS OF THE AMERICAN JOBS ACT, THEY SHOULDN'T PASS IT BECAUSE IT WOULD GIVE ME A WIN. THIS ISN'T ABOUT GIVING ME A WIN. THIS ISN'T ABOUT GIVING DEMOCRATS OR REPUBLICANS A WIN. IT'S ABOUT GIVING THE AMERICAN PEOPLE A WIN.

>> Woodruff: THE PRESIDENT FORMALLY SENT IT $440 BILLION PLAN TO CONGRESS ON MONDAY. MORE THAN HALF OF THE TOTAL WOULD PAY FOR EXTENDING OR EXPANDING SOCIAL SECURITY PAYROLL TAX BREAKS FOR EMPLOYEES AND EMPLOYERS. THE ACTUAL PAYROLL TAX RATE WOULD DROP FROM 6.2% TO 3.1%. THE BILL WOULDAL GIVE EMPLOYERS A $4,000 TAX CREDIT FOR HIRING THE LONG-TERM UNEMPLOYED.

>> IF WE GET CONGRESS TO PASS THIS BILL, THE TYPICAL WORKING FAMILY WILL GET $1500 IN TAX CUTS NEXT YEAR. ( APPLAUSE ) $1500. THAT WOULD HAVE BEEN TAKEN OUT OF YOUR PAYCHECK WILL GO RIGHT BACK INTO YOUR POCKET. BUT IF CONGRESS DOESN'T ACT, IF CONGRESS REFUSES TO PASS THIS BILL, THEN MIDDLE CLASS FAMILIES WILL GET HIT WITH A TAX INCREASE AT THE WORST POSSIBLE TIME.

>> Woodruff: TO GIVE THE MIDDLE CLASS THAT BREAK, THE PRESIDENT WANTS WEALTHIER AMERICANS TO PAY MORE. THAT WOULD INCLUDE A LIMIT ON AN ASSORTMENT OF TAX DEDUCTIONS TO SAVE $405 BILLION. ANOTHER $40 BILLION WOULD COME FROM CLOSING LOOPHOLES FOR OIL AND GAS COMPANIES PLUS $18 BILLION FROM NEW TAXES ON HEDGE FUND AND PRIVATE EQUITY MANAGERS. TOP DEMOCRATS LIKE SENATE MAJORITY WHIP DICK DURBIN DEFENDED THE TAX PROPOSALS TODAY.

>> I THINK THAT IT'S FAIR TO LIMIT THE TAX CUTS FOR THE WEALTHIEST SO THAT WE CAN PROVIDE TAX CUTS FOR WORKING FAMILIES. THAT, TO ME, IS SENSIBLE. IT'S NOT ONLY MORALLY RIGHT; IT'S ECONOMICALLY RIGHT.

>> Woodruff: BUT REPUBLICANS AND SOME DEMOCRATS REJECTED THOSE SAME IDEAS TWO YEARS AGO. AND TODAY HOUSE SPEAKER JOHN BOEHNER SAID THEY'RE STILL NOT POPULAR.

>> WHEN YOU LOOK AT WHAT WE SAW IN THE PRESIDENT'S PAY-FORS YESTERDAY, WE SEE PERMANENT TAX INCREASES PUT INTO EFFECT IN ORDER TO PAY FOR TEMPORARY SPENDING. I JUST DON'T THINK THAT'S REALLY GOING TO HELP OUR ECONOMY THE WAY IT COULD.

>> Woodruff: THE LEADER OF SENATE REPUBLICANS, MITCH McCONNELL, INSISTED THE PLAN IS REALLY JUST A POLITICAL RUSE.

>> ALL HE'S DOING IS JUST PROPOSING A HODGEPODGE OF RETREAD IDEAS AIMED AT CONVINCING PEOPLE THAT A TEMPORARY FIX IS REALLY PERMANENT AND THAT IT WILL CREATE PERMANENT JOBS AND THEN DARING REPUBLICANS TO VOTE AGAINST IT.

>> Woodruff: AS THE WAR OF WORDS HEATS UP, PRESIDENT OBAMA WILL TAKE HIS JOBS CAMPAIGN TO THE RALEIGH DURHAM AREA IN NORTH CAROLINA TOMORROW. WE GET TWO TAKES ON THE TAX ASPECTS OF THE PRESIDENT'S PLAN FROM NOTABLE ECONOMISTS. AUSTAN GOOLSBEE IS A LONGTIME ADVISOR TO PRESIDENT OBAMA AND SERVED UNTIL LAST MONTH AS THE CHAIR OF HIS COUNCIL OF ECONOMIC ADVISORS. HE'S RETURNED TO THE UNIVERSITY OF CHICAGO. AND MARTIN FELDSTEIN IS A PROFESSOR AT HARVARD UNIVERSITY. A LONGTIME CONSERVATIVE THINKER, HE WAS THE CHAIR OF COUNCIL OF ECONOMIC ADVISERS IN THE REAGAN ADMINISTRATION. GENTLEMEN, WE THANK YOU BOTH FOR BEING WITH US.

>> GOOD TO BE WITH YOU.

>> Woodruff: PROFESSOR FELDSTEIN I'M GOING TO TALK WITH YOU. LET'S TALK ABOUT THE TAX CUTS IN THE PRESIDENT'S PLAN FIRST. THIS NOTION THAT HE WOULD CUT THE SOCIAL SECURITY PAYROLL TAX IN HALF FOR EMPLOYEES, EXPANDING IT, AND THEN EXTENDING IT TO EMPLOYERS. WHAT EFFECT WOULD THAT HAVE ON JOBS?

>> WELL, A VERY SMALL POSITIVE EFFECT. THE PART THAT HOUSEHOLDS GET, THAT EMPLOYEES GET, THE PART THAT EMPLOYERS GET I THINK WOULD BASICALLY BE JUST SAVED, ADDED TO RETAINED EARNINGS. SO THAT WOULD HAVE ALMOST NO IMPACT AT ALL.

>> Woodruff: WHY DON'T YOU THINK IT WOULD HAVE A GREATER IMPACT ON EMPLOYERS?

>> OH, BECAUSE YOU'RE TALKING ABOUT A 3% OF PAYROLL REDUCTION. SO IF YOU'RE GOING TO HIRE SOMEBODY AND PAY THEM $30,000, IT'S $900 A YEAR. THAT'S TAX DEDUCTIBLE AGAINST A CORPORATE RATE. SO IT'S $600. SO FOR $600, THEY'RE NOT GOING TO MAKE THE DECISION TO MAKE A PERMANENT HIRE.

>> Woodruff: AUSTEN GOOLSBEE YOU WERE IN THIS WHITE HOUSE UNTIL NOT SO LONG AGO. YOU'RE HEARING WHAT MR. FELDSTEIN IS SAYING. WHAT DO YOU SAY?

>> WELL, LOOK, I THINK THERE'S PRETTY WIDE AGREEMENT THAT THE PAYROLL TAX CUT FOR THE WORKERS IS AT A MOMENT LIKE THIS... COULD BE AN IMPORTANT DEMAND EFFECT. I THINK THERE'S DIFFERING VIEWS. I WOULD LIKE TO THINK THAT IF YOU ADDRESS THE COST OF LABOR AND YOU SORT OF REDUCE THE AFTER-TAX COST OF HIRING PEOPLE, I THINK THE AMOUNT OF BILLIONS THAT IT ADDS UP TO WILL MAKE A DIFFERENCE TO SOME COMPANIES. I THINK IT TENDS TO PERHAPS BE A BIGGER IMPACT ON SMALLER BUSINESSES THAN ON BIG ONES. AND THEN ANOTHER PART IN THE JOBS BILL IS CONTINUING AND EXPANDING TAX INCENTIVES FOR COMPANIES TO DO INVESTMENT. I THINK THOSE THREE THINGS ARE WHAT YOU WANT TO DO. YOU DON'T WANT TO JUST PICK ONE BECAUSE WHAT YOUR VIEW OF THE WORLD MIGHT NOT BE CORRECT. YOU WANT TO TRY CUTTING TAXES FOR HIRING PEOPLE, CUTTING TAXES TO PUT IN PEOPLE'S POCKETS, CUTTING TAXES FOR INVESTMENT, AND TRY TO DO THAT AS A PACKAGE. I THINK IT COULD BE PRETTY POSITIVE.

>> Woodruff: MARTIN FELDSTEIN, WHAT IF YOU PUT THEM ALTOGETHER, YOU LOOK AT THEM ALL AT A PACKAGE, DOES THAT MAKE IT ANY HELPFUL.

>> I LOOK AT WHAT THE VARIOUS FORECASTERS SAY THIS MIGHT DO. THE MOST OPTIMISTIC ONES SAY THAT IT WILL ADD BETWEEN $1...1-2 MILLION JOBS OVER THE NEXT TWO YEARS. THAT SOUNDS LIKE A LOT UNTIL YOU REALIZE THAT THAT'S ABOUT 200,000 DOLLARS PER JOB. 200,000 DOLLARS PER JOB. SO IT'S JUST NOT A GOOD USE OF MONEY THAT, OF COURSE, IT HAS TO BE PAID FOR. WE HAVEN'T TALKED ABOUT THAT YET BUT IT'S NOT A GOOD USE OF MONEY TO SPEND $200,000 TO CREATE A SINGLE JOB.

>> Woodruff: WE'RE GOING TO TALK ABOUT THAT IN JUST A MOMENT. AUSTEN GOOLSBEE, WHAT ABOUT THAT? THAT'S A PRETTY HIGH PRICE TAG.

>> WELL, I DON'T THINK I TOTALLY AGREE WITH THAT EXACT NUMBER. BUT I WOULD SAY THAT AT A MOMENT WHEN YOU'VE GOT AN UNEMPLOYMENT RATE AS HIGH AS IT IS AND WE'VE LOST 8 MILLION JOBS, WHATEVER YOU COULD DO TO GET 2 MILLION JOBS STRIKES ME AS A PERFECTLY GOOD THING THAT WE OUGHT TO BE CONSIDERING DOING. YOU KNOW, THE PROFESSOR FELDSTEIN AND I HAVE AT A LOT OF TIMES AGREED ON THE NEED FOR DIFFERENT KINDS OF DIRECT INJECTION OR TAX CUTS THAT CAN BE USED TO HELP FACILITATE THE GROWTH OF THE ECONOMY. I THINK IF YOU LOOK AT THIS PACKAGE, IT'S PRETTY BROAD- BASED. IT'S A BUNCH OF THINGS THAT IF THIS WERE THREE YEARS AGO, A LOT OF PEOPLE WOULD BE SAYING, WOULD BE ASKING, WAS THAT A REPUBLICAN PLAN BECAUSE A LOT OF THIS STUFF WAS... WERE REPUBLICAN IDEAS OR WERE BIPARTISAN IDEAS THREE YEARS AGO.

>> Woodruff: THE POINT I WANT TO ASK YOU, PICKING UP ON WHAT HE SAID. IS THE SITUATION NOT DESPERATE ENOUGH IN TERMS OF NEEDING JOBS THAT EVEN IF IT JUST ADDS UP TO SOME JOBS AND THEY COST A LOT, IT'S WORTH IT?

>> I DON'T THINK IT IS WORTH IT. MOREOVER, IF YOU'RE GOING TO FINANCE THIS, THEN THE FINANCING IS GOING TO HAVE NEGATIVE EFFECTS ON EMPLOYMENT. SO WHEN WE TALK ABOUT THE FORECAST THAT SAYS THIS COULD ADD A COUPLE OF MILLION JOBS AT A COST OF $200,000 PER JOB THAT'S ON THE ASSUMPTION THAT YOU'RE NOT OFFSETTING IT BY HIGHER TAXES ON BUSINESSES AND ON HIGH-INCOME INDIVIDUALS.

>> Woodruff: IN FACT THE PRESIDENT IS PROPOSING, WE NOW SEE THIS WEEK HE PUT OUT THE DETAILS HE WANTS TO LIMIT, ITEMIZED DEDUCTIONS FOR PEOPLE WHO ARE ON THE WEALTHY SIDE. PEOPLE EARNING OVER $250,000 A YEAR AS A FAMILY, $200,000 AS AN INDIVIDUAL. IN OTHER WORDS, LIMITING DEDUCTIONS FOR HOME MORTGAGE INTEREST, STATE AND LOCAL PROPERTY TAXES AND CHARITABLE DEDUCTIONS.

>> MY FEELING IS THAT WE ARE GOING TO NEED MORE REVENUE AND THAT EVENTUALLY CONGRESS WILL FIND A COMPROMISE ON THAT ISSUE. THERE ARE TWO WAYS TO GET MORE REVENUE. ONE IS TO RAISE TAX RATES, MARGINAL TAX RATES ON INDIVIDUALS. THAT WOULD BE A MISTAKE BECAUSE THAT WOULD HURT INCENTIVES. THAT WOULD HURT GROWTH. THAT WOULD HURT EMPLOYMENT. ON THE OTHER HAND, TAKING AWAY SOME OF THE SPENDING THAT'S BUILT INTO THE TAX CODE LIKE THE SUBSIDIES FOR MORTGAGE BORROWING OR THE SUBSIDIES FOR OTHER THINGS, TO ME, THAT MAKES SENSE. BUT I THINK THE WAY THE PRESIDENT HAS APPROACHED IT, WE'RE ONLY GOING TO DO IT FOR HIGH-INCOME INDIVIDUALS AND WE'RE GOING TO USE THAT MONEY FOR MORE SPENDING RATHER THAN DEFICIT REDUCTION OR RATE REDUCTION, I THINK THAT'S A MISTAKE.

>> Woodruff: HOW DO YOU SEE IT, AUSTEN GOOLSBEE?

>> LOOK, I SEE IT THAT THE ECONOMY IS IN A TOUGH SPOT. WE'RE FACING THESE BORDERLINE CATASTROPHIC EVENTS COMING FROM EUROPE. WE'VE GOT TO START GROWING IN THIS COUNTRY. ONE IMPORTANT WAY TO DO THAT IS... IT'S NOT SPENDING TO BE CUTTING THE PAYROLL TAX, TO BE ENCOURAGING INVESTMENT. IF WE'RE DOING THAT BY ELIMINATING SOME OF THE TAX EXPENDITURES AND LOOPHOLES THAT WE HAVE ARGUED FOR YEARS WOULD BE GOOD TO GET RID OF, I VIEW THAT AS A WIN NOT A LOSS.

>> YOU NEED THAT MONEY EVENTUALLY TO REDUCE THE DEFICIT. WE COULD USE IT ALSO....

>> Woodruff: THE MONEY THAT WOULD COME FROM TAXs....

>> LIMITING THEM. I WOULDN'T TAKE THEM AWAY, I WOULD PUT A CAP ON THEM. I WOULD LIMIT THE SIZE OF THEM. BUT THAT'S MONEY THAT COULD BE USED TO REDUCE BUDGET DEFICITS OVER TIME TO GET OUR DEBT RATIO DOWN. AND SO TO USE IT FOR A VERY INEFFICIENT NEW SPENDING PROGRAM, A NEW SET OF JOB STIMULUS OF THE SORT THAT THE PRESIDENT HAS PROPOSED, I THINK IS A MISTAKE IN USE OF THAT MONEY.

>> Woodruff: AUSTEN GOOLSBEE, HE'S SAYING IT'S JUST A COCK EYED USE OF THE MONEY.

>> HE IS SAYING THAT. BUT JUST TO PUT IN PERSPECTIVE, WHEN THE ECONOMY IS BAD ENOUGH EVEN PROFESSOR FELDSTEIN, YOU KNOW, IN LATE 2008 WAS SAYING LET'S HAVE 300 BILLION OF DIRECT STIMULUS. I THINK THERE IS A QUESTION OF, DO YOU VIEW THIS MOMENT AS ONE IN WHICH IT WARRANTS ACTION THAT THE GOVERNMENT WOULD BE DOING THINGS TO TRY TO GET THE PRIVATE SECTOR TO HELP STAND UP? I THINK THAT IT IS SUCH A MOMENT. AND IF YOU DECIDE THAT IT IS SUCH A MOMENT, THEN THE QUESTION IS, DO YOU WANT TO DO THAT IN A WAY THAT'S PAID FOR OVER THE TEN-YEAR BUDGET WINDOW OR DO YOU WANT TO DO IT THAT IT'S NOT PAID FOR. IF YOU THINK YOU SHOULD DO SOMETHING AND YOU THINK IT SHOULD BE PAID FOR, THEN THE WAY IT SHOULD BE PAID FOR IS USING THINGS THAT WE SHOULD HAVE GOTTEN RID OF A LONG TIME AGO. LIKE DIRECT SUBSIDIES FOR OIL AND GAS COMPANIES. AND GETTING RID OF LOOPHOLES THAT SHOULDN'T HAVE BEEN IN THE TAX CODE TO BEGIN WITH.

>> Woodruff: WHICH IS IS ANOTHER PART OF WHAT'S BEING PROPOSED.

>> BUT FOCUSING ON JUST ON HIGH-INCOME INDIVIDUALS MEANS THAT IT WOULD BE VERY HARD EVER TO EXPAND THIS TO THE REST OF THE POPULATION.

>> Woodruff: WHY IS THAT?

>> BECAUSE THEN IT WOULD BE A TAX INCREASE FOR NON-HIGH INCOME INDIVIDUALS, FOR MIDDLE INCOME INDIVIDUALS EXCLUSIVELY FOR MIDDLE INCOME INDIVIDUALS AND THE POLITICS OF THAT WOULD BE IMPOSSIBLE. SO WE REALLY NEED TO HAVE EVERYBODY SHARE IN RAISING ADDITIONAL REVENUE THROUGH BROADENING THE TAX BASE.

>> Woodruff: SO THE CONCEPT BEHIND THIS OR AT LEAST PART OF THE CONCEPT OF MAKING THE WELL-OFF PAY A LITTLE BIT MORE IN ORDER THAT THE MIDDLE CLASS GETS A BREAK, MORE MONEY IN THEIR POCKET, SMALL BUSINESSES CREATE JOBS, YOU'RE SAYING THAT'S NOT A TRADE-OFF....

>> THIS IS NOT A ONE-FOR-ONE THING. THIS IS NOT "WE'RE GOING TO TEMPORARILY RAISE THE TAX ON HIGH-INCOME PEOPLE IN ORDER TO TEMPORARILY LOWER IT FOR THE REST OF THE POPULATION." NOR IS IT "WE'RE GOING TO PERMANENTLY INCREASE FOR IT HIGH-INCOME INDIVIDUALS IN ORDER TO PERMANENTLY REDUCE IT FOR THE OTHERS." IT'S "WE'RE GOING TO PERMANENTLY RAISE TAXES ON HIGH-INCOME INDIVIDUALS BY BROADENING THEIR TAX BASE IN ORDER TO FINANCE A ONE-YEAR SET OF PROGRAMS TO TRY TO STIMULATE THE ECONOMY IN A VERY INEFFICIENT WAY."

>> Woodruff: QUICK FINAL WORD AUSTEN GOOLSBEE.

>> LOOK, I THINK THE ECONOMY... WE'RE FACING TOUGH HEAD WINDS FROM THE INTERNATIONAL SPHERE. WE OUGHT TO BE DOING SOME THINGS TO TRY TO HELP GET THE PRIVATE SECTOR STOOD UP. I THINK THERE HAS BEEN AND SHOULD BE CONTINUED BIPARTISAN CONSENSUS THAT IT BE TAX CUTS OF THE FORM TO PEOPLE, TO BUSINESSES, TO INVEST AND TO HIRE. THAT'S WHAT THIS SEEMS LIKE IT IS. AND IF YOU CAN GET RID OF LOOPHOLES THAT SHOULD HAVE BEEN GOTTEN RID OF BEFORE TO PAY FOR SOMETHING LIKE THAT, YOU OUGHT TO DO IT.

>> Woodruff: ALL RIGHT. GENTLEMEN, WE'RE GOING TO LEAVE IT THERE. WE THANK YOU VERY MUCH, AUSTEN GOOLSBEE, MARTIN FELDSTEIN. THANK YOU.

>> GOOD TO BE WITH YOU.

>> Ifill: NEXT, TO CAMPAIGN POLITICS. THERE WERE EIGHT REPUBLICAN PRESIDENTIAL CANDIDATES ON STAGE LAST NIGHT, BUT THE PARTY'S NEW FRONTRUNNER WAS THE ONE PUT TO THE TEST. NEWSHOUR CORRESPONDENT KWAME HOLMAN HAS OUR RECAP.

>> Reporter: TEXAS GOVERNOR RICK PERRY WAS THE MAIN TARGET THROUGHOUT MONDAY NIGHT'S DEBATE IN TAMPA. HOSTED BY CNN AND THE TEA PARTY EXPRESS. PERRY'S CHIEF RIVAL FOR THE REPUBLICAN NOMINATION, FORMER MASSACHUSETTS GOVERNOR MITT ROMNEY, RENEWED HIS ATTACK ON THE TEXAS GOVERNOR'S VIEWS ABOUT SOCIAL SECURITY.

>> THE QUESTION IS, DO YOU STILL BELIEVE THAT SOCIAL SECURITY SHOULD BE ENDED AS A FEDERAL PROGRAM, AS YOU DID SIX MONTHS AGO, WHEN YOUR BOOK CAME OUT AND RETURNED TO THE STATES OR DO YOU WANT TO RETREAT FROM THAT?

>> I THINK WE OUGHT TO BE A CONVERSATION.

>> WE'RE HAVING THAT RIGHT NOW, GOVERNOR. WE'RE RUNNING FOR PRESIDENT.

>> LET ME FINISH CONVERSATION. THE ISSUE ARE THERE WAYS TO MOVE THE STATES INTO SOCIAL SECURITY FOR STATE EMPLOYEES OR FOR RETIREES? WE DID IT IN THE STATE OF TEXAS BACK IN THE 1980s. I THINK THOFT TYPES OF THOUGHTFUL CONVERSATIONS WITH AMERICA RATHER THAN TRYING TO SCARE SENIORS LIKE YOU'RE DOING AND OTHER PEOPLE, IT'S TIME TO HAVE A LEGITIMATE CONVERSATION IN THIS COUNTRY.

>> Reporter: ROMNEY ALSO QUESTIONED HOW MUCH CREDIT PERRY DESERVED FOR THE RELATIVE SUCCESS OF THE TEXAS ECONOMY IN RECENT YEARS.

>> YOU KNOW, I THINK GOVERNOR PERRY WOULD AGREE WITH ME THAT IF YOU HAVE FOUR ACES THAT DOESN'T MAKE YOU A GREAT POKER PLAYER. AND FOUR ACES AND THE FOUR ACES THAT ARE TERRIFIC ACES THE NATION SHOULD LEARN FROM WERE THE ONES I DESCRIBED. ZERO INCOME TAX, LOW REGULATION, RIGHT TO WORK STATE, OIL IN THE GROUND AND THE REPUBLICAN LEGISLATURE. THOSE THINGS ARE TERRIFIC. THERE HAS BEEN GREAT JOB GROWTH IN TEXAS. UNDER ANN RICHARDS JOB GROWTH WAS 2.% A YEAR. UNDER RICK PERRY 1% A YEAR. THOSE ARE ALL GOOD NUMBERS.

>> I WAS GOING TO SAY YOU WERE DOING PRETTY GOOD UNTIL YOU GOT TO TALKING POKER. BUT THE FACT IS THE STATE OF TEXAS HAS LED THE NATION. WHILE THE CURRENT RESIDENT OF THE WHITE HOUSE HAS OVERSEEN THE LOSS OF 2.5 MILLION JOBS. TEXAS HAS DURING MY PERIOD AS GOVERNOR CREATED OVER A MILLION JOBS. WE DID THAT DURING SOME PRETTY TOUGH ECONOMIC PERIODS. ( APPLAUSE )

>> Reporter: TEXAS CONGRESSMAN RON PAUL WAS ASKED HIS OPINION OF PERRY'S JOB PERFORMANCE.

>> DOES YOUR GOVERNOR DESERVE ALL THAT CREDIT?

>> NOT QUITE. I'M A TAX PAYOR THERE. MY TAXES HAVE GONE UP. OUR TAXES HAVE DOUBLED SINCE HE'S BEEN IN OFFICE. OUR SPENDING HAS GONE UP DOUBLE. OUR DEBT HAS GONE UP NEARLY TRIPLE. SO, NO, AND 170,000 JOBS WERE GOVERNMENT JOBS. SO I WOULD PUT A LITTLE DAMPER ON THIS. BUT I DON'T WANT TO OFFEND THE GOVERNOR BECAUSE HE MIGHT RAISE MY TAXES OR SOMETHING.

>> Reporter: PERRY QUICKLY RESPONDED.

>> WHILE I'VE BEEN GOVERNOR WE HAVE CUT TAXES BY $14 BILLION. 65 DIFFERENT PIECES OF LEGISLATION. YOU MAY NOT HAVE SEEN THEM, REPRESENTATIVE PAUL, BUT THE FACT OF THE MATTER IS THERE ARE PEOPLE COMING TO TEXAS FOR FIVE YEARS IN A ROW. THE NUMBER ONE DESTINATION. THEY'RE NOT COMING BECAUSE WE'RE OVERTAXING THEM.

>> Reporter: BUT PERRY ALSO GOT CRITICISM FROM HIS OPPONENTS ON SOME SOCIAL CONSERVATIVE ISSUES WHICH MAY PROVE MORE PROBLEMATIC FOR HIM AS THE CAMPAIGN DEVELOPS. THE TEA PARTY AUDIENCE APPEARS LESS SUPPORTIVE OF PERRY WHEN THE DEBATE TURNED TO AN EXECUTIVE ORDER HE ISSUED IN 2007. IT REQUIRED THAT UNLESS PARENTS OPTED OUT, TEXAS SCHOOL GIRLS BE VACCINATED AGAINST A SEXUALLY TRANSMITTED DISEASE THAT CAN CAUSE CERVICAL CANCER.

>> WAS THAT A MISTAKE?

>> IT WAS. INDEED. IF I HAD IT TO DO OVER AGAIN, I WOULD HAVE DONE IT DIFFERENTLY. I WOULD HAVE GONE TO THE LEGISLATURE, WORKED WITH THEM. WHAT WAS DRIVING ME WAS OBVIOUSLY MAKING A DIFFERENCE ABOUT YOUNG PEOPLE'S LIVES. CERVICAL CANCER IS A HORRIBLE WAY TO DIE.

>> Reporter: FORMER PENNSYLVANIA SENATOR RICK SANTORUM CRITICIZED PERRY OVER THE ORDER.

>> HIS POLICY WAS RIGHT. HE BELIEVES WHAT HE DID WAS RIGHT. HE THINKS HE WENT ABOUT IT THE WRONG WAY. I BELIEVE YOUR POLICY IS WRONG.

>> Reporter: PERRY'S EXPLANATION DID NOT SIT WELL WITH MINNESOTA CONGRESSWOMAN MICHELE BACHMANN EITHER.

>> AND TO HAVE INNOCENT LITTLE 12-YEAR-OLD GIRLS BE FORCED TO HAVE A GOVERNMENT INJECTION THROUGH AN EXECUTIVE ORDER IS JUST FLAT OUT WRONG. THAT SHOULD NEVER BE DONE. THAT'S A VIOLATION OF A LIBERTY INTEREST.

>> Reporter: BACHMANN WHO HAS BEEN ECLIPSED SINCE PERRY ENTERED THE RACE SUGGESTED THE ORDER MIGHT HAVE BEEN MOTIVATED BY CAMPAIGN POLITICS.

>> THE GOVERNOR'S FORMER CHIEF OF STAFF WAS THE CHIEF LOBBYIST FOR THIS DRUG COMPANY. THE DRUG COMPANY GAVE THOUSANDS OF DOLLARS IN POLITICAL DONATIONS TO THE GOVERNOR. THIS IS IS HIS FLATOUT WRONG. THE QUESTION IS, IS IT ABOUT LIFE OR WAS IT ABOUT MILLIONS OF DOLLARS AND POTENTIALLY BILLIONS FOR A DRUG COMPANY.

>> THE COMPANY WAS MERCK. AND IT WAS A $5,000 CONTRIBUTION THAT I HAD RECEIVED FROM THEM. I RAISE ABOUT $30 MILLION. IF YOU'RE SAYING THAT I CAN BE BOUGHT FOR $5,000, I'M OFFENDED. ( APPLAUSE )

>> I'M OFFENDED FOR ALL THE LITTLE GIRLS AND THE PARENTS THAT DIDN'T HAVE A CHOICE. THAT'S WHAT I'M OFFENDED.

>> Reporter: PERRY AGAIN FOUND HIMSELF ON THE DEFENSIVE WHEN IT CAME TO A TEXAS POLICY THAT OFFERS IN-STATE TUITION TO CHILDREN OF ILLEGAL IMMIGRANTS.

>> BOTTOM LINE IT DOESN'T MAKE ANY DIFFERENCE WHAT THE SOUND OF YOUR LAST NAME IS. THAT IS THE AMERICAN WAY. NO MATTER HOW YOU GOT INTO THAT STATE FROM THE STANDPOINT IF YOUR PARENTS BROUGHT YOU THERE OR WHAT HAVE YOU. THAT'S WHAT WE'VE DONE IN THE STATE OF TEXAS. I'M PROUD THAT WE ARE HAVING THOSE INDIVIDUALS BE CONTRIBUTING MEMBERS OF OUR SOCIETY RATHER THAN TELL ON THEM, YOU GO BEYOND THE GOVERNMENT DOLE.

>> Reporter: THAT GAVE ROMNEY AN OPENING TO JOIN IN THE CHALLENGES TO PERRY.

>> WITH REGARDS TO ILLEGAL IMMIGRATION, OF COURSE WE BUILD A FENCE. OF COURSE WE DO NOT GIVE IN- STATE TUITION CREDITS TO PEOPLE WHO HAVE COME HERE ILLEGALLY. ( APPLAUSE ) THAT ONLY ATTRACTS PEOPLE TO CONTINUE TO COME HERE AND TAKE ADVANTAGE OF AMERICA'S GREAT....

>> Reporter: THE REPUBLICAN HOPEFULS WILL MEET AGAIN IN TEN DAYS FOR A DEBATE IN ORLANDO.

>> Woodruff: THE LATEST MEASUREMENT OF POVERTY IN AMERICA WAS RELEASED TODAY BY THE U.S. CENSUS BUREAU, AND THE NEWS WAS HEADED IN THE WRONG DIRECTION. RAY SUAREZ LOOKS BEHIND THE NUMBERS.

>> Suarez: AT A TIME WHEN MUCH OF WASHINGTON IS FOCUSED ON HELPING THE STRUGGLING MIDDLE CLASS, TODAY'S REPORT OUTLINED THE MAGNITUDE OF THE PROBLEM FOR 15% OF AMERICANS WHO LIVE IN POVERTY. MORE THAN 46 MILLION LIVED BELOW THE FEDERAL POVERTY LINE LAST YEAR, THE HIGHEST NUMBER SINCE THE CENSUS BEGAN TRACKING THAT DATA FIVE DECADES AGO. THE POVERTY LINE IS LOWER THAN YOU MIGHT THINK: $11,139 A YEAR FOR A SINGLE PERSON, AND $22,314 A YEAR FOR A FAMILY OF FOUR. THE POVERTY RATE ITSELF IS AT THE HIGHEST LEVEL SINCE 1993. WE EXAMINE WHAT'S HAPPENING WITH TWO PEOPLE WHO STUDY THIS CAREFULLY. DOUGLAS BESHAROV IS A PROFESSOR OF PUBLIC POLICY AT THE UNIVERSITY OF MARYLAND. HE JOINS US FROM BOSTON. AND ISABEL SAWHILL IS A SENIOR FELLOW AT THE BROOKINGS INSTITUTION. HER WORK FOCUSES ON POVERTY. ISABEL SAWHILL, ANOTHER 2.5 MILLION PEOPLE FELL INTO POVERTY IN 2009. AT THE RISK OF ASKING THE OBVIOUS, IS IT UNEMPLOYMENT THAT'S DRIVING THAT NUMBER?

>> IT IS DEFINITELY UNEMPLOYMENT THAT'S DRIVING THIS INCREASE IN POVERTY RATES AND LEADING TO THE RECORD NUMBERS THAT YOU TALKED ABOUT IN THE LEAD-IN. YOU KNOW, THE VERY BEST ANTI-POVERTY POLICY IS TO HAVE A JOB. WITH SO MANY PEOPLE OUT OF WORK OR HAVING PART-TIME JOBS WHEN THEY'D LIKE FULL-TIME WORK, IT'S INEVITABLE THAT THE POVERTY RATE IS GOING TO GO UP. WE'VE DONE SOME PROJECTIONS OF WHAT THE POVERTY RATE WILL BE MID DECADE, A FEW YEARS FROM NOW. IF THE UNEMPLOYMENT PROJECTIONS THAT MOST ECONOMIC FORECASTERS ARE USING HOLD TRUE. IT'S A VERY DISMAL PICTURE.

>> Suarez: THIS IS A NUMBER, DOUG BESHAROV, THAT HAS BEEN RISING SINCE THE ECONOMY BEGAN TO SUFFER SEVERAL YEARS AGO. IS THERE A NEW POOR? IS IS THERE A PROFILE FOR WHO IS JOINING THE RANKS OF THOSE LIVING UNDER 22,000 FOR A FAMILY OF FOUR?

>> WELL, I THINK, YES, THAT'S RIGHT. FOR AS LONG AS WE'VE BEEN COLLECTING STATISTICS ABOUT POVERTY, WE'VE SEEN A SLOW BUT STEADY REDUCTION IN POVERTY RATES IN THE COUNTRY WITH MEMBERS OF RACIAL AND ETHNIC GROUPS BEING LEFT BEHIND AT LEAST SOMEWHAT. AND PROBLEMS OF FAMILY BREAKDOWN, DIVORCE, NON-MARITAL BIRTH CONTRIBUTING TO POVERTY RATES. THIS, AS BELL WAS MENTIONING, THIS DOWNTURN IS SENDING MANY MILLIONS OF PEOPLE WHO ENJOYED A MIDDLE CLASS OR AT LEAST A VERY COMFORTABLE LIFESTYLE INTO POVERTY. IT COULD BE A VERY LONG-TERM CONDITION AS BELL WAS SAYING. WE COULD BE AT A BEND POINT IN OUR ECONOMY. UNLESS WE TAKE SOME PRETTY DRASTIC ACTION TO TURN THIS AROUND, IT WILL BE WITH US FOR QUITE A NUMBER OF YEARS.

>> Suarez: ACTION LIKE WHAT, PROFESSOR?

>> WELL, IF WE LOOK AT WHAT'S BEEN HAPPENING IN EUROPE, THE EUROPEAN COUNTRIES HAVE TURNED TO A MUCH MORE AGGRESSIVE SYSTEM OF JOB RETRAINING. ACTUALLY ALTHOUGH WE HAVE BLIGHTLY COMMENTED THAT THE EUROPEANS ARE NOT VERY GOOD AT EXPECTING PEOPLE TO WORK, THEY'VE BEEN IMPOSING JOB RETRAINING, JOB SEARCH, AND JOB-TAKING RESPONSIBILITIES ON THE UNEMPLOYED. IT SEEMS STRANGE AND REALLY HARSH TO TALK ABOUT WITHIN THE CONDITIONS WE HAVE NOW. BUT OVER TIME UNLESS THE ECONOMY REALLY IMPROVES, MANY OF THE PEOPLE WHO ARE UNEMPLOYED NOW WILL, SAD TO SAY, HAVE TO TAKE JOBS THAT DON'T PAY NEARLY AS WELL AS THEY USED... AS THE JOBS THEY USED TO HAVE.

>> Suarez: DO YOU AGREE WITH THAT DIAGNOSIS?

>> I AGREE WITH THAT AS FAR AS IT GOES BUT I WOULD ALSO EMPHASIZE THAT WE REALLY DO NEED TO GET THE JOB MARKET WORKING AGAIN. WE HAVE A HUGE POOL OF UNEMPLOYED. PEOPLE WITH THE LEAST SKILLS ARE GOING TO BE THE LEAST COMPETITIVE TO GET THE FEW JOBS THAT THERE ARE. WE ALSO NEED TO EXTEND THE SAFETY NET TO THE PEOPLE WHO AREN'T GOING TO BE ABLE TO FIND JOBS IN THIS DISMAL LABOR MARKET. I THINK EXTENDING UNEMPLOYMENT INSURANCE, FOR EXAMPLE, IS ABOUT THE MOST IMPORTANT THING WE COULD DO. TO MAKE SURE THAT THE SAFETY NET WORKS OR CONTINUES TO WORK. IT'S ACTUALLY PLAYED A VERY IMPORTANT ROLE THROUGHOUT THIS RECESSION. IF YOU LOOK AT THE POVERTY RATES ONCE YOU ADJUST FOR THE FACT THAT PEOPLE ARE GETTING CERTAIN BENEFITS LIKE FOOD STAMPS AND A FEW OTHERS, THE POVERTY RATE DOESN'T GO UP AS MUCH AS THE RAW FIGURES SHOW.

>> Suarez: WHEN YOU FURTHER INTO THE STATISTICS, THERE ARE FRIGHTENING NUMBERS IN THERE. THE HIGHEST NUMBER EVER COUNTED IN EXTREME POVERTY, THAT IS, A LEVEL HALF OF WHAT THE ESTABLISHED POVERTY RATE IS. WHAT DOES THAT TELL YOU?

>> WELL, IT TELLS ME A LOT OF PEOPLE AREN'T WORKING. THE WAY YOU GET INCOMES DOWN THAT LOW-- BECAUSE THAT WOULD BE LIKE $5,000 FOR A SINGLE PERSON-- IS BECAUSE YOU'RE NOT WORKING OR NOT WORKING FULL TIME. SO I THINK THIS REALLY IS IS A JOB MARKET PROBLEM. AT LEAST ALL THE RECENT INCREASES.

>> Suarez: PROFESSOR BESHAROV, IS THERE A MOBILITY PROBLEM NOW AS WELL? ONCE YOU'VE FALLEN, IT'S HARDER THAN BEFORE TO GET BACK UP?

>> WELL, PART OF THIS IS ALSO AGE RELATED. CERTAINLY THE UNEMPLOYED AND THE AGE 50 TO 60 FACE A JOB MARKET THAT'S NOT VERY PROMISING. SO I THINK THE DEMOGRAPHICS OF SOME OF THE UNEMPLOYED SUGGESTS THAT WE'LL HAVE TO FIND SOME OTHER KIND OF SOLUTIONS FOR THEM. BLACK POVERTY RATES, LATINO POVERTY RATES HAVE ALSO CLIMBED. FOR THE LATINOS, IMMIGRANTS OR NOT, THE CONSTRUCTION INDUSTRY HAS ALL BUT COLLAPSED FOR THEM. AS BELL WAS SAYING, UNLESS THE ECONOMY IMPROVES, THESE PEOPLE WILL NOT HAVE THE KINDS OF JOB OPPORTUNITIES THEY HAD IN THE PAST. I WANT TO PICK UP ON ONE POINT THAT BELL SAID BECAUSE I THINK IT'S TREMENDOUSLY IMPORTANT THAT PEOPLE UNDERSTAND THIS. WE HAD A VERY LARGE INCREASE IN MEASUREDED POVERTY. BUT THAT INCREASE WOULD BE SUBSTANTIALLY GREATER IF IT WEREN'T FOR THE EXTENSIONS OF UNEMPLOYMENT AND ACTUALLY DISABILITY PAYMENTS AS WELL. THE EXTENSION OF UNEMPLOYMENT BENEFITS TO 99 WEEKS IS MASKING EVEN HIGHER... WHAT WOULD HAVE BEEN HIGHER LEVELS OF POVERTY.

>> Suarez: SO THE SAFETY NET IS DOING ITS JOB.

>> THE SAFETY NET HAS BEEN DOING ITS JOB. THAT DOESN'T MEAN IT COULDN'T DO BETTER BUT WE HAD A LOT OF SAFETY NET PROGRAMS THAT WERE BEEFED UP, INCREASED, DURING THE RECOVERY ACT THAT WENT INTO EFFECT IN 2009. AND NOW THE RECOVERY ACT FUNDS ARE DISAPPEARING. UNLESS WE DO SOME EXTENSIONS OF THINGS LIKE UNEMPLOYMENT INSURANCE, FOOD STAMP PROGRAM THAT'S IMPORTANT, CHILD CARE, WAGE SUBSIDIES FOR THE WORKING POOR, PAYROLL TAX CUTS THAT WILL HELP LOW-INCOME WORKERS EVEN MORE THAN MIDDLE CLASS WORKERS, THOSE THINGS ARE VERY IMPORTANT RIGHT NOW.

>> Suarez: BELL SAWHILL, DOUG BESHAROV, THANK YOU BOTH.

>> THANK YOU.

>> THANK YOU.

>> Ifill: AND WE END TONIGHT WITH A RETURN TO THE SUBJECT OF PRESIDENTIAL CAMPAIGN DEBATES, AS SEEN THROUGH THE EYES OF ONE OF OUR OWN. JIM LEHRER'S NEW BOOK TELLS THE STORY FROM THE UNIQUE FRONT SEAT HE OCCUPIED FOR DECADES AS A DEBATE MODERATOR. HE SAT DOWN WITH JEFFREY BROWN RECENTLY TO TALK ABOUT IT.

>> Brown: WHAT ARE YOU GOING TO HAVE TO GIVE UP IN TERMS OF THE PRIORITIES THAT YOU WOULD BRING AS PRESIDENT OF THE UNITED STATES....

>> Brown: FOR AMERICAN VOTERS, PRESIDENTIAL DEBATES ARE USUALLY THE ONLY CHANCE TO SEE AND TAKE THE MEASURE OF CANDIDATES SIDE BY SIDE.

>> JIM, UNDER MY PLAN ALL SENIORS WILL GET PRESCRIPTION DRUGS.

>> Brown: UPWARDS OF 60 MILLION VIEWERS.

>> YOU VOTED AGAINST THE CRIME BILL.

>> Brown: THE STAKES ARE INCREDIBLY HIGH.

>> NONE OF US HAS ANY IDEA WHAT JIM LEHRER INTENDS TO ASK.

>> Brown: THE MAN WHO HAS MODERATED MORE OF THESE DEBATES THAN ANYONE ELSE SAYS IT'S LIKE WALKING DOWN THE BLADE OF A KNIFE. THAT DOES NOT SOUND LIKE A LOT OF FUN.

>> IT'S NOT A LOT OF FUN BUT IF YOU GET TO THE OTHER END IT'S REALLY EXCITING.

>> Brown: YOU'VE MADE IT.

>> OUR QUESTIONS THIS EVENING WILL BE ABOUT EQUALLY DIVIDED BETWEEN FOREIGN AND DOMESTIC POLICY MATTERS.

>> Brown: JIM LEHRER MODERATED HIS FIRST PRESIDENTIAL DEBATE IN 1988 AND NINE MORE SINCE AS WELL AS A VICE PRESIDENTIAL DEBATE. IN 1996 AND 2000, HE MODERATED ALL THE PRESIDENTIAL DEBATES, THE FIRST PERSON TO DO THAT. IN THE NEW BOOK "TENSION CITY," HE WRITES AN INSIDER'S ACCOUNT OF DEBATES OVER THE LAST SEVERAL DECADES. WE TALKED ABOUT IT RECENTLY AT HIS WASHINGTON D.C. HOME.

>> THE BOTTOM LINE, JEFF, IS THAT WHEN A DEBATE IS OVER THAT I MODERATE, I WANT EVERYBODY TO SAY, OKAY, YOU HAVE SEEN AND HEARD THE CANDIDATES FOR PRESIDENT OF THE UNITED STATES FROM THE SAME STAGE AT THE SAME TIME TALKING ABOUT THE SAME THINGS. YOU CAN JUDGE THEM. NOT JUST ON CONTENT BECAUSE BY THEN PEOPLE ALREADY KNOW ABOUT LOCK BOXES AND SOCIAL SECURITY AND ALL THOSE ISSUES. THEY WANT TO TAKE A MEASURE OF THE PERSON. I MEAN, DO YOU LIKE THIS GUY? IS THIS PERSON... YOU KNOW, IS HE TELLING THE TRUTH? ALL THAT KIND OF STUFF. YOU SEE THEM RIGHT THERE TOGETHER. IT'S A HUGE TEST.

>> Brown: YOU WRITE ABOUT THE PREPARATION, THE PERIOD THAT... THE TENSION FOR YOU LEADING UP TO IT. AT ONE POINT YOU SAY YOU LEARN THAT DEALING WITH NERVES IS "THE" KEY TO BEING ABLE TO FUNCTION EFFECTIVELY.

>> THE FIRST STEP, THE MUST STEP, IS YOU'VE GOT TO BE PREPARED. PREPARATION MEANS NOT SO YOU CAN WRITE THE GREATEST QUESTIONS IN THE WORLD BUT SO YOU CAN LISTEN IN SOME COMFORT ZONE TO THE ANSWERS AND MAKE A DECISION, A SPLIT-SECOND DECISION THAT COULD AFFECT ALL KINDS OF THINGS INCLUDING THE OUTCOME OF AN ELECTION. WHETHER TO FOLLOW UP ON THIS.

>> Brown: YOU'RE AWARE OF THAT ALL THE TIME.

>> ALL THE TIME. AND SO THE WAY I GET INTO MY COMFORT ZONE IS I SAY, FIRST, JUST READ EVERYTHING, TRY TO DIGEST IT ALL.

>> Brown: HAVE IT IN YOUR HEAD.

>> HAVE IT IN YOUR HEAD AND THEN TRY TO IMAGINE THE EVENT IN YOUR HEAD. YOU SEE BOTH CANDIDATES STANDING THERE, ASK YOUR QUESTION AND HOW WOULD HE OR SHE RESPOND. GET A LOOSE PICTURE ALREADY IN MY MIND. THEN THE FINAL STEP IS I DO WRITE THE QUESTIONS AND ALL OF THAT. BY THEN I'M IN A KIND OF ISOLATION BOOTH OF MY OWN, OF MY OWN MAKING. YOO... I DON'T EVEN TALK TO PEOPLE ON THE NEWSHOUR SET.

>> Brown: I KNOW. THE ONE PERSON WHO DOES THE HEAR FINAL OF DRAFT QUESTIONS BEFOREHAND IS JIM'S WIFE KATE, A NOVELIST AND OF COURSE VETERAN OF A MILLION NEWSHOUR VIEWINGS. SHE ACTS AS JIM'S DEBATE PREP EDITOR AND SHARES IN ALL THE ANXIETY.

>> AS SOON AS THE PROCESS REALLY GETS UNDERWAY, I'M ALICE IN WONDERLAND GOING INTO A RABBIT HOLE. TRYING TO COME OUT ON THE OTHER SIDE.

>> Brown: IT'S SAFE TO SAY THIS IS PLETT... PRETTY NERVE WRACKING.

>> SURREAL.

>> Brown: IN THE BOOK JIM WRITES THAT PREPARING OPENING QUESTIONS FOR THE 1992 DEBATE BETWEEN GEORGE H.W.BUSH, BILL CLINTON AND ROSS PEROT.

>> I WILL ASK QUESTIONS FOR THE FIRST HALF UNDER RULES THAT PERMIT....

>> Brown: TO GET THINGS GOING HE WANTED A QUESTION ALONG THE SAME LINES, APPLES TO AMALS, FOR EACH CANDIDATE. THIS ONE TIME HE WAS KATE WAS ON A BOOK TOUR AND THEY TALKED BY PHONE NOT LONG BEFORE THE START OF THE DEBATE.

>> I CALLED KATE AND RAN THROUGH THOSE THREE QUESTIONS AND THERE WAS DEAD SILENCE ON THE PHONE. I'M THINKING, OH, NO. I DON'T REALLY NEED THIS. I SAID WHAT IS IT? NOT TERRIBLY POLITE ABOUT IT. SHE SAID, WELL, YOU'VE GOT TWO APPLES AND AN ORANGE.

>> THAT WAS ONE OF THE HARDEST CALLS I'VE EVER MADE THOUGH BECAUSE I KNEW HE WAS IN HIS ZONE. HE FELT REALLY GOOD ABOUT HIS QUESTIONS. HE WAS REALLY UP. THAT'S A SPLIT-SECOND DECISION. AS HE SAYS IN THE BOOK, HE CALLED ME BACK TO TELL ME BY THE TIME HE GOT THERE THAT I HAD BEEN RIGHT. EVERYTHING WAS OKAY. IN THE MEANTIME, I GOT AMANDA, OUR YOUNGEST DAUGHTER. I SAID WE'VE GOT TO GO FOR A WALK. WE'VE GOT TO GO FOR A WALK. WE GOT OUT. I SAID I'VE RUINED THE DEBATE FOR YOUR DADDY. I'VE RUINED EVERYTHING.

>> Brown: IN FACT, JIM WRITES, KATE SAVED THE DAY. BUT GLITCHES OF ALL SORTS CAN AND SOMETIMES DO OCCUR. IN HIS BASEMENT OFFICE SURROUNDED BY THE BUS SIGNS HE COLLECTS, JIM SHOWED ME THE CODING SYSTEM HE USES TO KEEP TRACK OF QUESTIONS AND TIME. HERE FOR THE 2008 OBAMA-McCAIN DEBATE. BUT IT DOESN'T ALWAYS WORK.

>> THE DEBATE IN FOUL... 2004 BETWEEN JOHN KERRY AND GEORGE W. BUSH I LITERALLY FORGOT WHETHER OR NOT, UH-OH, IS THIS A NEW QUESTION OR IS THIS A FOLLOW-UP QUESTION? MY MIND JUST WENT BLANK. I HAD TO MAKE A DECISION. I JUST GUESSED RIGHT.

>> Brown: THE BOOK HIGHLIGHTS SO-CALLED MAJOR MOMENTS IN DEBATE HISTORY. THE ONES THAT COME TO DEFINE AN EVENT AND SOMETIMES A CANDIDATE. GEORGE H.W.BUSH LOOKING AT HIS WATCH IN 1992.

>> THERE YOU GO AGAIN.

>> Brown: THOSE ZINGERS FROM RONALD REAGAN THAT WOUNDED JIMMY CARTER IN 1980. IN THE DOCUMENTARY "DEBATING OUR DESTINY" JIM WENT BACK TO TALK TO CANDIDATES ABOUT THEIR EXPERIENCE OF THE DEBATES AND HAD THE CHANCE TO ASK WHETHER THEY PREPARED FAMOUS LINES AHEAD OF TIME.

>> I ASKED RONALD REAGAN ABOUT "THERE YOU GO AGAIN" AND A COUPLE OF OTHERS. "NO, NO, NO, IT JUST CAME TO ME."

>> NO, IT JUST SEEMED TO BE THE THING TO SAY TO WHAT HE WAS SAYING UP THERE.

>> Brown: DID YOU BELIEVE HIM?

>> I DON'T KNOW IF I DID OR DIDN'T. I FOUND IT INTERESTING THAT NOBODY WANTS TO ADMIT IT.

>> Brown: ANOTHER MAJOR MOMENT CAME IN 2000 WHEN VICE PRESIDENT AL GORE, ROLLING HIS EYES AND LOUDLY SIGHING DURING HIS DEBATE WITH THEN TEXAS GOVERNOR GEORGE W. BUSH.

>> FOR EXAMPLE, IN ALASKA THERE'S A LOT OF....

>> Brown: THE WHOLE WORLD KNEW IT EXCEPT FOR THE THIRD MAN ON THE STAGE THAT NIGHT IN BOSTON. YOU DIDN'T KNOW IT WAS HAPPENING.

>> I DIDN'T KNOW IT BECAUSE UNDER MY PERSONAL RULES I ASKED CANDIDATE-A A QUESTION. I LOOK ONLY AT CANDIDATE-A. I NEVER LOOK AT CANDIDATE-B BECAUSE I DON'T WANT TO BE INVOLVED IN EYE CONTACT TO HELP IN ANY WAY AFFECT THE RESPONSE OF THE OTHER CANDIDATE. WHEN THE DEBATE WAS OVER ONE OF MY DAUGHTERS SAID TO ME, GOSH, DAD, THAT WAS INCREDIBLE WHAT GORE DID. I STOPPED AND I SAID WHAT DID GORE DO?

>> Brown: WHEN YOU'VE TAKEN A HIT AND YOU WRITE ABOUT IT HERE THE WAY YOU DID, YOU'RE NOT BEING AGGRESSIVE ENOUGH OR PUSHING HARD ENOUGH.

>> I'M CRITICIZED ALL THE TIME FOR THAT, THAT I HAVEN'T BEEN AGGRESSIVE ENOUGH. A LOT OF PEOPLE WOULD EXPECT A MODERATOR, WHETHER IT'S A DEBATE MODERATOR OR A MODERATOR ON THE NEWSHOUR, TO SAY I SAY SENATOR ASKED A QUESTION OR THE CANDIDATE ASKS A QUESTION AND THE MODERATOR YELLS, "LIAR! " SEE, MODERATORS ARE NOT HUMAN LIE DETECTOR MACHINES. THE LIE DETECTOR MACHINES ARE THE PEOPLE WHO ARE LISTENING. IT'S DO IT FOR THEM.

>> Brown: OVER THE YEARS MANY DEBATE FORMATS HAVE BEEN TRIED, STANDING, SITTING, WALKING AROUND. MODERATORS IN A PANEL GIVEN STRICT BOUNDS OR RELATIVE FREEDOM.

>> TWO MINUTES. I'LL DECIDE WHETHER WE GO ON.

>> Brown: MAYBE THE KEY QUESTION IS, DO OUR PRESIDENTIAL DEBATES OFFER REAL DEBATE FOR THE CITIZENS TO HEAR A REAL DEBATE AMONG THE CANDIDATES?

>> TO COIN A PHRASE, IT ALL DEPENDS ON WHAT YOU MEAN BY DEBATE. TO HAVE A FREE-FLOWING DEBATE WHERE THE TWO PEOPLE LITERALLY TALK TO EACH OTHER AND ARGUE WITH EACH OTHER, NO, WE HAVEN'T HAD THOSE. WITH A FEW EXCEPTIONS. I KNOW THIS SOUNDS A LITTLE KIND OF CLICHEISH, BUT THE FACT IS THE FORMAT IS THE LEAST IMPORTANT THING. THE IMPORTANT THING IS THAT THEY HAVE THESE DEBATES. EVERYBODY WATCHES FOR DIFFERENT THINGS. THEY'RE GOING TO SEE ALL KINDS OF DIFFERENT THINGS.

>> Brown: WHAT'S NEXT? WOULD YOU LIKE TO MODERATE MORE?

>> NO, NO, NO. I'VE DONE MY DUTY. I'VE WALKED DOWN THAT BLADE. IT'S BEEN A WONDERFUL, WONDERFUL EXPERIENCE.

>> Brown: YOU GOT TO THE OTHER SIDE.

>> NOT EVERY TIME. I GOT CUT A FEW TIMES. BUT I FEEL GOOD ABOUT HAVING DONE IT. BUT IT'S SOMEBODY ELSE'S... OTHER PEOPLE'S TURN NOW. I'LL REST MY CASE.

>> FOR NOW FROM BOSTON I'M JIM LEHRER. THANK YOU AND GOOD NIGHT.

>> FROM CARL CABLES FLORIDA, I'M JIM LEHRER, GOOD NIGHT. FROM OXFORD MISSISSIPPI THANK YOU, SENATORS BOTH. I'M JIM LEHRER. THANK YOU AND GOOD TONIGHT.

>> Woodruff: AGAIN, THE MAJOR DEVELOPMENTS OF THE DAY. TALIBAN INSURGENTS TARGETED THE U.S. EMBASSY AND NATO HEADQUARTERS IN COORDINATED ASSAULTS IN KABUL, AFGHANISTAN. A COURT IN IRAN SET BAIL OF $500,000 APIECE FOR TWO AMERICAN HIKERS CONVICTED OF SPYING. THEY WOULD BE RELEASED WITHIN DAYS. AND TO HARI SREENIVASAN FOR WHAT'S ON THE NEWSHOUR ONLINE. HARI?

>> Sreenivasan: JIM READS PASSAGES FROM "TENSION CITY" ON THE RUNDOWN BLOG. PLUS, EXPLORE TODAY'S POVERTY NUMBERS AND NEWLY RELEASED FIGURES ON THE NUMBERS OF UNINSURED. AND TONIGHT'S "FRONTLINE" FEATURES AN EXTENDED CONVERSATION WITH ALI SOUFAN, AN F.B.I. INTERROGATOR, WHO SAYS C.I.A. ENHANCED INTERROGATION TECHNIQUES ARE INEFFECTIVE, AND THAT THE AGENCY'S FAILURE TO SHARE INFORMATION WITH HIM ALTERED HIS INVESTIGATION OF 9/11. "FRONTLINE'S" MARTIN SMITH CONDUCTED THE INTERVIEW. HERE'S AN EXCERPT.

>> YOU'RE LOOKING AT THIS. YOU'RE SEEING AL MIDAR WITH HALAD AND YOU'RE TOLD IN THE REPORT THAT AL MIDAR WAS IN FLIGHT 77 THAT CRASHED INTO THE PENTAGON.

>> YES.

>> HOW DID YOU REACT?

>> I BASICALLY RAN TO THE BATHROOM AND PUKED.

>> WHAT IF THAT INFORMATION HAD BEEN SHARED, HOW WOULD IT HAVE PLAYED OUT?

>> OH, MY GOD. THIS IS A HUGE "IF." THIS IS A HUGE "IF." I THINK THE WORLD WOULD BE VERY DIFFERENT TODAY. I'M CONVINCED. NO 9/11. THE WORLD WOULD BE VERY DIFFERENT.

>> Sreenivasan: "FRONTLINE" AIRS ON MOST PBS STATIONS LATER THIS EVENING. CHECK YOUR LOCAL LISTINGS FOR THE TIME. ALL THAT AND MORE IS ON OUR WEB SITE, nweshour.pbs.org. JUDY?

>> Ifill: AND AGAIN, TO OUR HONOR ROLL OF AMERICAN SERVICE

>> Woodruff: AND THAT'S THE NEWSHOUR FOR TONIGHT. ON WEDNESDAY, MARGARET WARNER REPORTS FROM CAIRO ON THE RISE OF THE MUSLIM BROTHERHOOD IN EGYPT. I'M JUDY WOODRUFF.

>> Ifill: AND I'M GWEN IFILL. WE'LL SEE YOU ONLINE AND AGAIN HERE TOMORROW EVENING. THANK YOU, AND GOOD NIGHT. MAJOR FUNDING FOR THE PBS NEWSHOUR HAS BEEN PROVIDED BY: CHEVRON. WE MAY HAVE MORE IN COMMON THAN YOU THINK.

>> AND BY BNSF RAILWAY.

>> 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

>> THIS IS BBC WORLD NEWS AMERICA. FUNDING FOR THIS PRESENTATION IS MADE POSSIBLE BY THE FREEMAN FOUNDATION OF NEW YORK, STOWE, VERMONT AND HONOLULU. NEWMAN'S OWN FOUNDATION. AND UNIONING BANK.