PBS NewsHour; September 6, 2011 6:00pm-7:00pm PDT

Captioning sponsored by MacNEIL/LEHRER PRODUCTIONS

>> Brown: THE HEAD OF THE POSTAL SERVICE TOLD A CONGRESSIONAL COMMITTEE TODAY THAT "RADICAL CHANGES" ARE NEEDED TO KEEP HIS TROUBLED AGENCY IN BUSINESS. GOOD EVENING. I'M JEFFREY BROWN.

>> Ifill: AND I'M GWEN IFILL. ON THE NEWSHOUR TONIGHT, WE ASK POSTMASTER GENERAL PATRICK DONAHOE AND THE HEAD OF THE LETTER CARRIERS UNION, FREDERIC ROLANDO, WHAT CAN BE DONE TO STAVE OFF A SHUTDOWN.

>> Brown: THEN, MARKETS CONTINUE TO FALL, AND WE LOOK AT THE VULNERABILITY OF BANKS HERE AND IN EUROPE.

>> Ifill: JUDY WOODRUFF GETS AN UPDATE ON THE 2012 CAMPAIGN FROM ARI SHAPIRO OF NPR, AS G.O.P. HOPEFUL MITT ROMNEY OFFERS A PLAN FOR JOB GROWTH, AND AS PRESIDENT OBAMA'S APPROVAL RATINGS CONTINUE TO SINK.

>> Brown: AS PART OF OUR COVERAGE OF THE TENTH ANNIVERSARY OF THE TERRORIST ATTACKS, MILES O'BRIEN EXAMINES WHAT'S CHANGED IN THE DESIGN AND CONSTRUCTION OF TALL BUILDINGS.

>> TEN YEARS AFTER 9/11, A NEW SKY SCRAPER IS RISING ON THE SITE OF GROUND ZERO. HOW MUCH HAVE WE LEARNED ABOUT BUILDING SKY SCRAPERS TO MAKE THEM SAFER?

>> Ifill: AND RAY SUAREZ EXPLORES THE LATEST STORM OVER WIKILEAKS' SECRETS.

>> Brown: 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.

>> MOVING OUR ECONOMY FOR 160 YEARS. BNSF. 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.

>> Ifill: THE U.S. POSTMASTER GENERAL, PATRICK DONAHOE, WARNED TODAY THAT HIS AGENCY IS NOW ON THE "BRINK OF DEFAULT." IT WAS THE LATEST IN A SERIES OF INCREASINGLY DIRE ASSESSMENTS ABOUT THE FATE OF AN AMERICAN INSTITUTION. WITHOUT SOME SORT OF INFUSION, OFFICIALS WARN, THEY WON'T HAVE THE MONEY NEEDED TO MAKE A $5.5 BILLION HEALTH CARE PAYMENT DUE THIS MONTH. THE WORST CASE SCENARIO, A COMPLETE SHUTDOWN THIS WINTER. UNLESS CONGRESS STEPS IN. THE POSTAL SERVICE TURNED 200 YEARS OLD IN JULY. THE CONVENTIONAL MAIL USE HAS DROPPED PRECIPITOUSLY IN RECENT YEARS. VOLUME IS DOWN 22% FROM JUST FIVE YEARS AGO. A DECLINE WHICH IS EXPECTED TO CONTINUE. DRIVEN IN PART BY STIFF COMPETITION FROM CARRIERS SUCH AS FED-EX AND U.P.S. THAT'S LEFT THE AGENCY FACING LOSSES OF MORE THAN $8 BILLION FOR THE SECOND YEAR IN A ROW. POST MASTER GENERAL PATRICK DONAHOE HAS RESPONDED WITH A SERIES OF COST-CUTTING PROPOSALS. AMONG THEM, ELIMINATING SATURDAY DELIVERY. AND CLOSING UP TO 3700 LOCAL POST OFFICES, MOST OF THEM IN SMALL TOWNS. REPLACING THEM WITH AUTOMATED CENTERS OPERATING OUT OF LOCAL BUSINESSES. DONAHOE HAS ALSO PROPOSED LAYING OFF AS MANY AS 120,000 WORKERS, NEARLY ONE FIFTH OF THE AGENCY'S WORK FORCE AND PULLING WORKERS OUT OF MORE EXPENSIVE FEDERAL PENSION PLANS. PRE-FUNDING RETIREE BENEFITS HAVE COST THE LOCAL SERVICE $21 BILLION IN THE LAST THREE YEARS. ALL THOSE MOVES WOULD REQUIRE CONGRESSIONAL APPROVAL. FOR MORE ON WHAT'S AT STAKE FOR THE POSTAL SERVICE-- AND ON WHETHER YOUR MAIL WILL KEEP COMING-- WE TURN TO POSTMASTER GENERAL PATRICK DONAHOE AND FREDRIC ROLANDO, THE PRESIDENT OF THE NATIONAL ASSOCIATION OF LETTER CARRIERS. MR. DONAHOE, YOU HAVE DESCRIBED THIS PROPOSAL AND YOUR CRITICS HAVE DESCRIBED THIS PROPOSAL, YOUR PROPOSAL AS BEING RADICAL. IS IT?

>> IT'S WHAT WE HAVE TO DO IN ORDER TO GET OUR BUSINESS MOVING IN THE RIGHT DIRECTION, GWEN. HERE'S THE SITUATION WE FACE. WHEN YOU LOOK AT WHAT'S HAPPENED IN THE WORLD FROM AN ELECTRONICS STANDPOINT, MORE AND MORE PEOPLE EVERYDAY PAY BILLS, GET BILLS THROUGH THE INTERNET. THAT'S REALLY TAKEN A TOLL ON OUR VOLUME. WE DO HAVE TO MAKE SOME RADICAL CHANGES IN ORDER TO GET OUR FINANCES BACK ON AN EVEN KEEL SO WE CAN PROVIDE SERVICE TO THE AMERICAN PUBLIC.

>> Ifill: IS THAT WHAT'S HAPPENING HERE,.

>> THANK YOU FOR THE OPPORTUNITY TO SET THE RECORD STRAIGHT. I WAS LISTEN TO GO THE LEAD-IN DIALOGUE TO THE SHOW. THAT'S AN EXAMPLE OF THE TYPE OF MISINFORMATION THAT THE AMERICAN PUBLIC IS HEARING A THE NEWS EVERYDAY. I'M HERE TO TELL YOU THAT THE POSTAL SERVICE IS NOT BROKE. THE POSTAL SERVICE JUST NEEDS ACCESS TO ITS OWN MONEY. CONGRESS NEEDS TO GET BUSY AND GIVE THEM THAT ACCESS.

>> Ifill: DID WE SAY THAT THE POSTAL SERVICE WAS BROKE OR DID WE SAY THAT CONGRESS DID NOT GIVE THEM ACCESS?

>> WELL, THE POSTAL SERVICE IS NOT BROKE BECAUSE THEY NEED ACCESS TO THEIR OWN FUNDS. DURING THE LAST FOUR FISCAL YEARS, THE POSTAL SERVICE WITH THE RECESSION THAT WE'VE BEEN THROUGH, THE WORST RECESSION IN 80 YEARS AND THE INTERNET DIVERSION STILL SHOWED AN OPERATIONAL PROFIT OF ALMOST $700 MILLION DURING THAT PERIOD OF TIME. THE 20-PLUS BILLION DOLLARS THAT YOU READ ABOUT IN LOSSES IS NOTHING MORE THAN A CONGRESSIONAL MANDATE THAT REQUIRES THE POSTAL SERVICE, REQUIRES THE POSTAL SERVICE TO TAKE ALL OF THEIR CASH AND PUT IT INTO A PRE-FUNDING ACCOUNT. THE POSTAL SERVICE ACTUALLY HAS SOMEWHERE BETWEEN $50 BILLION AND $125 BILLION IN THEIR OTHER FUND THAT IS NOT TAX PAYER MONEY. THEY HAVEN'T USED A DIME OF TAX PAYER MONEY IN OVER 30 YEARS. THE CONGRESS JUST NEEDS TO ACT RESPONSIBLY AND QUICKLY TO GIVE THEM ACCESS TO THOSE FUNDS.

>> Ifill: WHAT DO YOU THINK ABOUT THAT, MR. DONAHOE? IS THE MONEY THERE, BUT YOU'RE JUST NOT BEING ALLOWED TO SPEND IT.

>> FRED IS IS EXACTLY RIGHT AROUND THE ISSUES WE FACED THE LAST FEW YEARS. WHAT'S HAPPENED IS OUR REVENUES HAVE GONE DOWN IN THE LAST FOUR YEARS FROM $75 BILLION $65 BILLION. SO WE HAVE LOST SUBSTANTIAL REVENUE. IN THAT SAME TIME, WE HAVE BEEN REQUIRED TO PREPAY EMPLOYEE RETIREMENT FUNDING. WHAT OUR PEOPLE HAVE DONE A GREAT JOB. THEY'VE BEEN VERY PRODUCTIVE. THEY'VE MADE UP THAT DIFFERENCE. IN FACT, UNTIL THIS PAST YEAR, WE HAD SHOWN A PROFIT. THE PROBLEM IS WHEN YOU START TO LOOK FORWARD, EVEN WITH THE FUNDING, THE PRE-FUNDING MONEY GIVEN BACK TO US, WHICH THERE'S NOT A LOT OF PEOPLE COMING FORWARD TELLING US THAT THEY'RE GOING TO GIVE US THAT MONEY. THE PROBLEM IS WHEN YOU START TO GO FORWARD, THE VOLUME AND REVENUES CONTINUES TO GO DOWN. WE ARE LOSING FIRST CLASS MAIL AT THE RATE OF 7.5% A YEAR. THAT'S NOT GOING TO CHANGE. THAT IS NOT GOING TO CHANGE. WE HAVE LOST 26% OF OUR VOLUME IN THE LAST FOUR YEARS. WE'VE MADE IT UP BY PRODUCTIVITY IMPROVEMENTS. WHAT WE'RE SAYING IS GOING FORWARD WE HAVE TO MAKE SOME CHANGES LIKE LIMITING SATURDAY DELIVERY, SAVES UP $3 BILLION.

>> Ifill: WHAT DOES CONGRESS HAVE TO DO WITH THAT? YOU SAY THAT CONGRESS NEEDS TO MAKE CHANGES TO GET YOU ACCESS TO THIS CASH. WHAT CAN CONGRESS DO?

>> HERE'S WHAT CONGRESS HAS TO DO. CONGRESS HAS GOT TO PASS LEGISLATION THAT DOES A NUMBER OF THINGS. NUMBER ONE RESOLVES RETIREE HEALTH BENEFITS. WE STILL OWE ABOUT $46 BILLION INTO THAT FUND. THERE ARE TWO PROPOSALS ON THE TABLE. THE ONE FRED REFERRED TO WHERE WE WOULD GET MONEY BACK. THE OTHER PROPOSAL IS THE POSTAL SERVICE TAKING OVER OUR OWN RETIREMENT SYSTEM, OPERATING IT JUST LIKE A PRIVATE BUSINESS. WE WOULD NO LONGER NEED THAT PRE-FUNDING. WE'D MAKE SOME CHANGES AND BE ABLE TO PULL THE COSTS DOWN. WE WOULD NOT NEED THAT PRE-FUNDING. THAT'S THE ONE THING. THE SECOND THING WE NEED CONGRESS TO DO IS GIVE US THE AUTHORIZATION TO ELIMINATE SATURDAY DELIVERY. THE POST OFFICES REMAIN OPEN. YOU CAN GET YOUR MAIL THROUGH THE POST OFFICE BOX BUT WE WOULD ELIMINATE SATURDAY DELIVERY. THE THIRD THING IS WE HAVE OVERPAID INTO OUR OTHER RETIREMENT FUND $6.9 BILLION. WE WANT ALL THAT MONEY BACK RIGHT NOW. WE'VE ALSO GOT SOME PROPOSALS AROUND RETIREMENTS GOING FORWARD. WE CAN'T PROMISE PEOPLE AN ANNUITY GOING FORWARD SO WHAT WE'RE SAYING IS ANYBODY HIRED NOW THAT WE WOULD ASK THEM TO... WE WOULD HAVE THEM UNDER A PROGRAM THAT THEY WOULD GET A DEFINED CONTRIBUTION VERSUS THE....

>> Ifill: LET ME ASK FRED ABOUT SOME OF THOSE. THIS WOULD AFFECT THE PEOPLE YOU REPRESENT. LETTER CARRIERS WOULD BE LAID OFF UNDER THIS PLAN. THEY WOULD HAVE TO NOT AGREE TO GUARANTEE PENSIONS IN THE PAST AND THEY WOULD HAVE TO SUFFER FROM SOME OF THE MONEY THAT'S BEEN PREPAID TO COVER THEIR RETIREMENT IN THE FUTURE WOULD HAVE TO BE BASICALLY GO AWAY. IS THIS SOMETHING THAT YOU THINK IS NECESSARY AND ACCEPTABLE?

>> I RESPECTFULLY DISAGREE WITH WHAT CONGRESS NEEDS TO DO. WE CERTAINLY DON'T NEED TO DISMANTLE THE POSTAL SERVICE OR TAKE AWAY SERVICES TO THE AMERICAN PEOPLE OR ELIMINATE HUNDREDS OF THOUSANDS OF JOBS. WHAT CONGRESS NEEDS TO DO IS GIVE THE POSTAL SERVICE ACCESS TO, LIKE I SAID, BETWEEN 50 AND 125 BILLION DOLLARS SO THAT THEY CAN LOOK TO THE FUTURE AND ADAPT TO THE SERVICES THE AMERICAN PEOPLE AND COME UP WITH... HAVE TIME TO COME UP WITH THE PROPER BUSINESS MODEL FOR THE FUTURE AND GROW THE BUSINESS.

>> Ifill: WHERE DOES THIS MONEY COME FROM?

>> THIS IS ALL IN POSTAL ACCOUNTS.

>> Ifill: IT'S JUST LYING THERE AND CONGRESS IS SITTING ON IT AND WON'T GIVE IT TO YOU.

>> THERE'S $50-$75 BILLION IN SURPLUS PENSION FUNDS. THERE'S GOOD $42 BILLION IN THE FUTURE RETIREE HEALTH BENEFIT FUNDS. AGAIN ALL POSTAL FUNDS. NO TAX PAYOR MONEY INVOLVED.

>> Ifill: THIS WOULD MEAN THAT POSTAL EMPLOYEES IN ORDER TO KEEP THEIR JOBS WOULD HAVE TO GIVE SOMETHING UP, RIGHT?

>> I DON'T KNOW WHAT YOU MEAN.

>> Ifill: YOU'RE TALKING ABOUT DIPPING INTO THEIR RETIREMENT SAVINGS IN ORDER TO BALANCE....

>> THIS IS JUST CASH MONEY THAT THE POSTAL SERVICE NEEDS ACCESS TO. WE'RE NOT LOOKING TO IN ANY WAY DIMINISH WHAT NEEDS TO BE DONE FOR FUTURE PENSIONS OR FUTURE RETIREES. IT'S JUST THAT YOU DON'T HAVE TO DO 75 YEARS WORTH OF PRE-FUNDING IN A TEN-YEAR PERIOD. YOU CAN REA.M. TORIZE WHAT NEEDS TO BE DONE.

>> Ifill: WHAT ABOUT ELIMINATING SATURDAY DELIVERY. DO YOU THINK THAT'S NECESSARY?

>> I THINK IT WOULD BE BAD FOR THE BUSINESS. IT'S ONE OF THE THINGS THAT GIVES THE POSTAL SERVICE A COMPETITIVE EDGE. YOU WOULD BE GIVING UP ABOUT 17% OF YOUR SERVICE FOR ABOUT 3% OF A RETURN.

>> Ifill: MR. DONAHOE, DO YOU AGREE WITH MR. ORLANDO THAT NO LAY-OFFS ARE NECESSARY?

>> NO. THE PROBLEM IS THIS, GWEN. IN THE LAST TEN YEARS, WE'VE HAD TO REDUCE THE HEAD COUNT IN THIS ORGANIZATION BY ABOUT 250,000 PEOPLE. LIKE I SAID, OUR EMPLOYEES DO A GREAT JOB. THEY'RE VERY PRODUCTIVE. WHEN YOU LOOK AHEAD, OUR REVENUES WILL GO DOWN AT LEAST A BILLION DOLLARS EVERY YEAR FOR THE FORESEEABLE FUTURE. ANY BUSINESS THAT HAS ANY KIND OF GAME PLAN OR ANY KIND OF FUTURE LOOK UNDERSTANDS THAT YOU MUST MAKE CHANGE. WHAT WE'RE PROPOSING TO DO NOW IS GET A FEW OF THESE CHANGES MADE AROUND THE SIX-DAY TO FIVE-DAY DELIVERY AROUND OUR NETWORKS IN ORDER TO GET AHEAD OF THE COST. THE POSTAL SERVICE THIS YEAR EVEN IF WE HAD THE PRE-FUNDING ISSUE RESOLVED WE WOULD STILL LOSE SOMEWHERE AROUND $4.5 BILLION. YOU CAN'T SUSTAIN LOSSES LIKE THAT. YOU'VE GOT TO MAKE THE CHANGES, LIKE ANY OTHER BUSINESS GOING FORWARD. GET PROFITABLE. GET STABLE. IF IT'S FIVE DAYS, THAT'S FINE. IT'S A PROFITABLE, DEPENDABLE FIVE DAYS. WE'LL BE STRONG GOING INTO THE FUTURE. OUR BUSINESS MODELS CHANGE. WE HAVE TO STAY UP WITH THE TIMES AND UNDERSTAND THAT PEOPLE ARE MAILING ELECTRONICALLY. WE ARE STILL STRONG ON THE ADVERTISING MARKET STILL STRONG ON THE PACKAGE MARKET PROVIDING A GOOD, STABLE PREDICTABLE DAY OF DELIVERY FIVE DAYS A WEEK. THAT KEEPS AMERICANS IN THE MAIL.

>> Ifill: COULD YOU BOTH ANSWER THIS QUESTION FOR ME RELATIVELY BRIEFLY WHICH IS WHAT ARE WE TALKING ABOUT? IF CONGRESS DOESN'T ACT, ARE WE TALKING ABOUT IMMINENT SHUTDOWN? ARE WE TALKING ABOUT INSOLVENCY WHERE MONEY NEEDS TO BE MOVED AROUND.

>> LET ME SAY I DISAGREE BECAUSE ANY BUSINESS WOULD NOT PUT $20 BILLION OF CASH INTO THE FUTURE PRE-FUNDING NOR WOULD THEY LEAVE $50-$75 BILLION OF PENSION SURPLUS IN THAT ACCOUNT. WHERE THEY'RE GOING TO THE TRANSITION OF THE POSTAL SERVICE IS GOING THROUGH RIGHT NOW.

>> Ifill: IF CONGRESS DOESN'T ACT?

>> IF KWONG DOESN'T ACT, THE... THE CONGRESS DOESN'T ACT, THE POSTAL INDUSTRY ABOUT NINE MILLION JOBS ARE IN DANGER AND I BELIEVE THE CONGRESS WILL ACT A LITTLE BIT MORE RESPONSIBLY THAN THAT.

>> Ifill: MR. DONAHOE?

>> WE WILL BE OUT OF CASH NEXT AUGUST. THAT'S THE ISSUE. WE HAVE MADE SOME CHANGES. AND SOME INVESTMENTS WE MAKE. WE HAVE SUSPENDED SOME PAYMENTS INTO ONE OF THE OVERFUNDED RETIREE PLANS TO KEEP THE CASH FLOWING AND TO KEEP THE MAIL BEING DELIVERED. WE'LL CONTINUE TO DO THAT. THE ISSUE GOING AHEAD FOR US IS AGAIN TO WORK WITH CONGRESS TO GET THE LAWS CHANGED THAT WE NEED TO HAVE A STABLE BUSINESS MODEL GOING FORWARD.

>> Ifill: PATRICK DONAHOE, U.S. POST MASTER GENERAL AND FED RICK ORLANDO OF THE LETTER CARRIERS OF AMERICA, THANK YOU BOTH VERY MUCH.

>> THANK YOU.

>> THANK YOU.

>> Brown: STILL TO COME ON THE NEWSHOUR, THE BANKS, THE MARKETS, AND THE DEBT CRISIS; PRESIDENTIAL POLITICS; DESIGNS FOR A BETTER SKYSCRAPER; AND NEW INTRIGUE FROM WIKILEAKS. BUT FIRST, THE OTHER NEWS OF THE DAY. HERE'S HARI SREENIVASAN.

>> Sreenivasan: FLOOD WARNINGS FROM THE REMNANTS OF TROPICAL STORM LEE EXTENDED ALL THE WAY INTO NEW ENGLAND TODAY, AS THE SYSTEM PUSHED NORTH. SOME OF THE WORST DOWNPOURS CAME IN CHATTANOOGA, TENNESSEE, WITH MORE THAN NINE INCHES OF RAIN. AND THIS TIME LAPSE PHOTOGRAPHY SHOWED THE STORM PASSING OVER ATLANTA. SOME 200,000 CUSTOMERS THERE AND ELSEWHERE LOST POWER. MEANWHILE, HURRICANE KATIA KEPT COMING TOWARD BERMUDA, BUT WEAKENED SLIGHTLY WITH SUSTAINED WINDS NEAR 105 MILES AN HOUR. IT IS STILL EXPECTED TO VEER AWAY FROM THE U.S. MAINLAND. THE PLAGUE OF WILDFIRES IN TEXAS HAS NOW SPREAD TO MORE THAN 100,000 ACRES AND DESTROYED MORE THAN 1,000 HOMES. THAT WORD CAME TODAY AS DOZENS OF FIRES CONTINUED TO BURN. SOME OF THE WORST WERE SOUTHEAST OF AUSTIN IN RURAL BASTROP COUNTY. NEARLY 600 HOMES HAVE BEEN DESTROYED THERE. IN ADDITION, 5,000 PEOPLE HAVE BEEN FORCED TO FLEE THE SMOKE AND FIRE IN THE REGION. GOVERNOR RICK PERRY TOOK A BREAK FROM HIS PRESIDENTIAL CAMPAIGN TODAY TO SURVEY THE DAMAGE.

>> WE'VE GOT A LOT OF TEXANS LIVING IN SHELTERS NOW, LIVING WITH FRIENDS. AND A REFLECTION OF TEXANS TAKING CARE OF TEXANS. THAT'S WHAT THEY DO. LIVING WITH FRIENDS AND LOVED ONES. IN SOME CASES STRANGERS TAKING CARE OF PEOPLE THEY NEVER MET BEFORE.

>> Sreenivasan: AUTHORITIES HAVE BLAMED TWO DEATHS ON THE FIRES IN RECENT DAYS. CONVOYS OF MOAMMAR QADDAFI'S ARMED LOYALISTS FLED LIBYA TODAY. HIS SECURITY CHIEF AND A DOZEN OTHER FORMER OFFICIALS WERE SAID TO BE AMONG THEM. THE NEWS CAME AS REBELS PRESSED FOR THE SURRENDER OF A KEY TOWN, SOUTHEAST OF TRIPOLI. WE HAVE A REPORT FROM BILL NEELY OF INDEPENDENT TELEVISION NEWS. (GUNFIRE)

>> Reporter: THESE DAYS THE REBELS FIRE MORE BULLETS IN THE AIR THAN AT THE ENEMY. BECAUSE EVERY DAY THEY BELIEVE THEY'RE CLOSER TO ENDING QADDAFI'S FINAL RESISTANCE. THESE MEN ARE CLOSING IN ON THE TOWN OF BANI WALID WHERE QADDAFI HIMSELF AND HIS SONS ONCE TOOK REFUGE. QADDAFI'S SPOKESMAN, WHO IS IN THE TOWN, SAYS HIS LEADER IS STILL IN LIBYA. SOMEWHERE NATO AND THE REBELS WON'T FIND HIM. QADDAFI IS IN VERY HIGH SPIRITS, HE SAYS. BUT IT'S WHAT HAPPENED ON THE ROAD SOUTH OF HERE THAT IS INTRIGUING AND THAT IS EXCITING THE REBELS. A MILITARY CONVOY, FLEEING THROUGH THE DESERT TOWNS FOR HUNDREDS OF MILES AND OUT OF LIBYA. THE CONVOY WAS HEAVILY ARMED, UP TO 250 VEHICLES, CROSSING THE SAHARA INTO NAJIR YESTERDAY. REBELS SAY UP TO A DOZEN VEHICLES CONTAIN GOLD. AND MONEY FROM THE CENTRAL BANK OF QADDAFI'S HOMETOWN CERT. THE CONVOY IS NOW HEADING SOUTH TOWARDS THE CAPITAL WHERE THE GOVERNMENT HAS GIVEN IT PERMISSION TO CROSS INTO NEIGHBORING BER KEEN A AS IF OWE. ITS PRESIDENT HAS OFFERED COLONEL QADDAFI REFUGE. BACK IN LIBYA, THESE ARE THE MEN IN POWER NOW, EMBRACING ELDERS FROM A TOWN STILL UNDER THE CONTROL OF QADDAFI'S MEN. INSIDE A MOSQUE, THEY NEGOTIATE. THE ELDERS SAY PEOPLE IN BANI WALID ARE TERRIFIED. QADDAFI'S MEN HAVE TOLD EVERYONE THE REBELS ARE AL QAEDA KILLERS. THE REBELS ASSURE THEM THEY'RE NOT. AT THE PEACE TALKS, THERE ARE GUNS APLENTY. ON THE TELEPHONE, LIBYA'S PRIME MINISTER AND SURELY THE STRANGEST SPEECH HE'S YET MADE. REASSURING THEM THAT IF BANI WALID SURRENDERS, THERE WILL BE NO REPRISALS.

>> Sreenivasan: IN WASHINGTON, A STATE DEPARTMENT SPOKESMAN SAID QADDAFI WAS NOT AMONG THOSE WHO FLED LIBYA TODAY. BUT IN NEW YORK, DEFENSE SECRETARY LEON PANETTA SAID NO ONE KNOWS MUCH MORE THAN THAT.

>> I WISH I KNEW. YOU KNOW, I DON'T HAVE ANY INFORMATION AS TO EXACTLY WHERE HE'S LOCATED. I THINK, I MEAN, THE BEST INFORMATION WE HAVE IS THAT HE'S ON THE RUN. AS TO WHERE HE IS AND WHERE HE'S LOCATES, I DON'T HAVE ANY INFORMATION.

>> Sreenivasan: U.S. OFFICIALS HAVE BEEN TALKING WITH ALL OF LIBYA'S NEIGHBORING GOVERNMENTS, TO MAKE CLEAR THAT QADDAFI MUST BE BROUGHT TO JUSTICE. THE WORLD WEIGHED ON WALL STREET TODAY. STOCKS FELL SHARPLY AT THE OUTSET, OVER CONCERNS ABOUT EUROPE'S DEBT TROUBLES. THE MARKET RECOVERED SOMEWHAT AS THE DAY WENT ON. BUT THE DOW JONES INDUSTRIAL AVERAGE STILL LOST NEARLY 101 POINTS TO CLOSE AT 11,139. THE NASDAQ FELL SIX POINTS TO CLOSE AT 2473. THOSE ARE SOME OF THE DAY'S MAJOR STORIES. NOW, BACK TO JEFF.

>> Brown: AND WE PICK UP WHERE HARI JUST ENDED: INTERNATIONAL MARKETS HAUNTED BY THE SPECTER OF DEBT, PARTICULARLY IN EUROPE. INVESTORS THERE HAVE SOLD HEAVILY THIS WEEK, AMID FEARS THAT THE PROBLEM IS ONLY GETTING WORSE, AND THAT NO ONE HAS A SOLUTION. ACROSS THE CONTINENT, STOCK SHARES FINISHED THE DAY AT THEIR LOWEST CLOSE IN MORE THAN TWO YEARS. THE MAIN FRENCH AND GERMAN MARKET INDICES ENDED WITH LOSSES OF AT LEAST 1% AFTER FAR STEEPER DECLINES ON MONDAY. LONDON WAS THE ONLY MAJOR EUROPEAN INDEX TO BUCK THE TREND, FINISHING UP MORE THAN 1%. THE LOSSES WERE SPURRED IN PART BY RENEWED FEARS FOR THE WORLD'S 11th LARGEST ECONOMY, ITALY. THOUSANDS OF WORKERS IN THAT COUNTRY HIT THE STREETS TODAY TO PROTEST AUSTERITY MEASURES. IN FINANCIAL CIRCLES, SERIOUS DOUBTS REMAIN ABOUT WHETHER POLITICAL LEADERS CAN OR WILL ADDRESS THE CRUCIAL ISSUE OF SOVEREIGN DEBT. THE CHIEF EXECUTIVE OF DEUTSCHE BANK CITING COMPARISONS TO THE FINANCIAL CRISIS OF LATE 2008 SAID YESTERDAY INVESTORS ARE NOT ONLY ASKING THEMSELVES WHETHER THOSE RESPONSIBLE CAN SUMMON THE NECESSARY WILL POWER TO OVERCOME THIS CRISIS BUT INCREASINGLY ALSO WHETHER ENOUGH TIME REMAINS AND WHETHER THEY HAVE THE NEEDED RESOURCES AVAILABLE. MEANWHILE, THE SWISS MOVE TO PROTECT THEIR OWN ECONOMY BY TAKING THE STRONG SWISS FRANK TO THE VALUE OF THE EURO. THE ACTION HELPED SWISS STOCKS MOVE HIGHER DESPITE THE LOSSES ELSEWHERE IN EUROPE. MORE NOW FROM BARRY RITHOLTZ, C.E.O. OF FUSION IQ, AN EQUITY RESEARCH FIRM. HE ALSO WRITES "THE BIG PICTURE," A LEADING FINANCIAL NEWS BLOG, AND IS AUTHOR OF THE BOOK, "BAILOUT NATION." AND JACOB KIRKEGAARD IS AN ECONOMIST AND RESEARCH FELLOW AT THE PETERSON INSTITUTE FOR INTERNATIONAL ECONOMICS. BARRY RITHOLTZ THE WALL STREET JOURNAL HEADLINE TODAY READS YOU'RE EUROPE SIGNALS GLOBAL GLOOM. WHAT ARE THE LATEST SIGNALS THAT HAVE EVERYONE SO WORRIED?

>> WELL, IF WE LOOK AT THE PAST COUPLE OF MONTHS WE'RE SEEING AN ONGOING DECELERATION IN THE ECONOMIC DATA IN THE U.S.; THAT WAS THE FIRST WARNING SIGN. THE NEXT WARNING SIGN WAS THE FAILURE FOR THERE TO BE ANY SORT OF POSITIVE REACTION TO THE RESOLUTION OF THE U.S. DEBT CEILING. IN FACT, WE BROKE A NUMBER OF IMPORTANT TREND LINES. THE TECHNICIANS WILL TELL YOU THAT THE BULL MARKET, THE CYCLICAL BULL MARKET THAT BEGAN IN MARCH '09 IS PRETTY MUCH OVER AND THAT AT THIS POINT WE'RE REALLY JUST GROPING FOR EVALUATION THAT IS FAIR RELATIVE TO THE POSSIBILITY OF RECESSION.

>> Brown: JACOB KIERKEGAARD IN EUROPE AS WE SAID A LOT OF FOCUS TODAY ON ITALY. THE BIGGEST NEW PLAYER TO FACE TROUBLE.

>> YEAH, I MEAN THE FUNDAMENTAL PROBLEM IS THAT EUROPE FACES BOTH THE OBVIOUS ECONOMIC PROBLEMS CENTERED IN GREECE AND NOW IN ITALY. FIRST AND FOREMOST IT FACES A POLITICAL PROBLEM. THAT'S REALLY WHAT WE'RE SEEING MANIFESTED, THAT THE CONSTRAINTS THAT EUROPEAN POLICY MAKERS ARE PUT UNDER TO BE ABLE TO SOLVE THIS CRISIS ARE SO BIG THAT YOU FUNDAMENTALLY NEED SOME DRAMA IN THE MARKET. YOU NEED SOME PRESSURE FOR THIS TO GET DONE.

>> Brown: YOU HAVE DRAMA. NOW YOU HAVE A LOT OF TALK IN EUROPE ABOUT CREATING A NEW POLITICAL AND ECONOMIC INTEGRATION, A KIND OF CENTRAL FINANCIAL AUTHORITY. NOW WHAT WOULD THAT LOOK LIKE AND HOW SERIOUS IS TALK LIKE THAT?

>> I THINK IT'S VERY SERIOUS BUT I THINK WE NEED TO BE CLEAR AS WELL THAT THIS IS ONLY SOMETHING THAT CAN HAPPEN IN THE LONG TERM. I MEAN, IN MY OPINION, THIS IS NOT REALISTIC IN THE NEXT FIVE TO SEVEN YEARS. SO IT'S MORE OF AN ASPIRATIONAL GOAL, THAT EUROPE CLEARLY NEEDS TO MOVE TOWARDS POOLING MORE OF ITS FISCAL RESOURCES BECAUSE EUROPE AS SUCH ISN'T BROKE. IT JUST HAS SOME PROBLEMS DISTRIBUTING ITS FISCAL RESOURCES AROUND THE CONTINUE NEBLT. BUT THAT OF COURSE IS IS THE POLITICAL... POLITICALLY VERY TRICKY BECAUSE GERMANS DON'T WANT TO PAY FOR THE EXPENSE OF THE ITALIAN GOVERNMENT THAT GERMAN VOTER HAS NO, YOU KNOW, SORT OF DEMOCRATIC IMPACT ONY LECHING. THERE'S A WHOLE HOST OF POLITICAL ISSUES THAT YOU NEED TO SOLVE. THAT DOESN'T MEAN THAT YOU CANNOT SORT OF... AT THE POLICY LEVEL TODAY ANNOUNCE THAT THIS IS THE ULTIMATE GOAL TO WHICH YOU'RE HEADING TOWARDS. THAT I THINK WOULD HAVE A VERY BIG STABILIZING EFFECT ON THE MARKETS EVEN TODAY. EVEN IF THE GOAL CAN ONLY BE REACHED SEVERAL YEARS FROM NOW.

>> Brown: BARRY, AS WE WATCHED THAT UNFOLD ON THE GOVERNMENT'S SIDE, A LOT OF THE FOCUS IS ON THE OUR MEAN BANKS. WHAT DO YOU SEE AS THE OVERHANGING PROBLEM THERE AND OF COURSE THE QUESTION ON OUR SIDE OF THE ATLANTIC IS HOW MUCH EXPOSURE DO OUR BANKS HAVE TO THE PROBLEM THERE?

>> SURE. WELL, I THINK THERE'S A COUPLE OF ISSUES THAT WE HAVE TO LOOK AT. THE FIRST IS SOME OF THE MAJOR NATIONS IN EUROPE ARE IN DEEP FINANCIAL PROBLEMS. I DON'T KNOW IF WE'LL SAY THEY'RE INSOLVENT BUT THEY'RE PRETTY CLOSE. WE LOOK AT IRELAND AND PORTUGAL AND SPAIN AND ITALY, AND THEN GREECE. IT'S A FAIR BET THAT HALF THOSE COUNTRIES ARE GOING TO NEED VERY, VERY SIGNIFICANT BAILOUTS TO STAY AFLOAT UNLIKE THE U.S. THEY DON'T HAVE THEIR OWN CURRENCY. THEY DON'T HAVE THEIR OWN CENTRAL BANK. THEY'RE PART OF A CONSORTIUM SO IT'S A LITTLE BIT DIFFERENT. THAT'S THE FIRST ISSUE. THE SECOND ISSUE IS THE BANKS IN EUROPE, MANY OF WHOM HAVE EXTENDED TREMENDOUS CREDIT TO THESE VARIOUS NATIONS AND THE BANKS WITHIN THOSE NATIONS. SO IT'S VERY MUCH A CIRCULAR SORT OF CREDIT SITUATION THAT'S AT RISK. THE KEY QUESTION IN THE U.S. IS WHAT IS OUR BANK EXPOSURE TO EUROPEAN PROBLEMS. BEN BERNANKE JUST CAME OUT WITH A COMMENT EARLIER TODAY WHERE HE THINKS THAT MODEST TO MODERATE. THAT'S REALLY JUST A GUESS. WE REALLY DON'T KNOW WHAT U.S. BALANCE SHEETS LOOK LIKE RELATIVE TO THEIR EXPOSURE TO EUROPE.

>> Brown: WHAT'S YOUR SENSE, JACOB KIERKEGAARD ABOUT THE EXPOSURE OF THE U.S. BANKS AND THE CONNECTIONS?

>> I THINK IF THE EUROPEAN CRISIS IS CONTAINED, IF YOU LIKE, TO GREECE PERHAPS TO IRELAND AND PORTUGAL, THEN I DON'T THINK THE EXPOSURES ARE PARTICULARLY MATERIAL. FOR THE U.S. BANKS. IT'S ONLY IF YOU GET... IF THE PROBLEM SORT OF, YOU KNOW, SPREADS TO SPAIN AND PARTICULARLY ITALY BECAUSE IF THAT HAPPENS, THEN YOU START HAVING PROBLEMS IN THE CORE EUROPEAN BANKING SYSTEM IN ITALY, IN FRANCE, POTENTIALLY EVEN IN GERMANY. AND THE U.S. FINANCIAL SERVICES SECTOR EXPOSURE TO THESE BANKS IS GOING TO BE VERY SUBSTANTIAL. SO IT REALLY REQUIRES THAT THE CRISIS IN BOTH SPAIN AND ITALY BECOMES ACUTE WHICH I HAVE TO PERSONALLY SAY I DON'T THINK WE'RE QUITE THERE YET.

>> Brown: THAT'S HOPEFUL. BARRY RITHOLTZ, YOU MENTIONED BEN BERNANKE. I DID WANT TO ASK YOU ABOUT THE FEDERAL RESERVE. THERE'S SOME CONJECTURE ABOUT THE POSSIBLE EXPOSURE OF THE FED IN EUROPE, TO EUROPEAN BANKS AND GOVERNMENTS.

>> THAT'S RIGHT. THERE WAS RECENTLY A FREEDOM OF INFORMATION ACT LITIGATION BY BLOOMBERG IN ORDER TO FORCE THE FED TO REVEAL WHAT THEIR EXPOSURE WAS, WHO THEY MADE LOANS TO. WE FOUND OUT THAT THE FED WAS DOING LOTS AND LOTS OF LENDING TO VARIOUS EUROPEAN BANKS. BUT ONE THING TO KEEP IN MIND-- AND THIS TIES IN THE FEDERAL RESERVE AND WHAT YOUR OTHER GUEST JUST SAID-- IS THAT DIRTY WORD CONTAINS. IF WE LEARNED ANYTHING ABOUT THE CRISIS IN '08-'09, THINGS ARE SO INTER-CONNECTED, REMEMBER, BEN BERNANKE AND HANK PAULSEN BOTH FAMOUSLY SAID THE CRISIS IS CONTAINED TO SUB PRIME AND EVENTUALLY THAT SPUN OUT OF CONTROL. IT'S VERY CHALLENGING TO CONTAIN THIS TO ANY SPECIFIC BANK, ANY SPECIFIC REGION OR COUNTRY. THE LEVEL OF INTER-CONNECTION, THE POSSIBLE DOMINO EFFECT THAT WE SEE WHEN WON MAJOR BANK FALLS, IT'S VERY, VERY POSSIBLE THAT THIS COULD START IN GREECE, GO TO IRELAND AND EVENTUALLY MAKE ITS WAY TO SPAIN AND ITALY JUST THE WAY THIS STARTED IN SUB PRIME AND WORKS ITS WAY TO BEAR STERNS AND LEHMAN BROTHERS AND EVENTUALLY HIT A.I.G., CITIBANK, AND EVERYBODY ELSE. I'M VERY, VERY CAUTIOUS ANY TIME I HEAR THE WORD CONTAINED BECAUSE WE'VE SEEN VERY LITTLE IN FINANCE IS CONTAINED TO A NARROW BOX.

>> Brown: BRIEFLY, YOU'RE NODDING AT THAT. WE'RE ALL CAUTIOUS. BRIEFLY, WE SAW THE MARKET DOWN 300. I KNOW YOU CAN'T GO BY ANY PARTICULAR DAY BUT WE ARE CLEARLY IN A PERIOD OF UNCERTAINTY, RIGHT? WHERE THESE SWINGS CAN HAPPEN.

>> ABSOLUTELY. FUNDAMENTALLY WE ARE IN A NEW NORMAL, IF YOU LIKE, WHERE UNLIKE PREVIOUS ERAS, IN MY OPINION, THIS FUNDAMENTAL SOLVENCY OF INDUSTRIALIZED COUNTRY GOVERNMENTS IS ACTUALLY BEING QUESTIONED. YOU KNOW, WE SAW THE FULL FAITH AND CREDIT OF THE UNITED STATES BEING QUESTIONED JUST A FEW WEEKS AGO. CLEARLY THAT'S TRUE IN ITALY. CERTAINLY THAT'S TRUE IN SPAIN. OR SORRY IN GREECE AS WELL. WHEN THAT HAPPENS IN THE CASE OF EUROPE AT LEAST AS SOON AS YOU QUESTION THE SOLVENCY OF THE GOVERNMENT YOU IMMEDIATELY HAVE TO QUESTION THE SOLVENCY OF ALL ITALIAN BANKS, FOR INSTANCE. THAT'S WHAT GIVES THE CONTAGION EFFECT THAT BARRY JUST TALKED ABOUT.

>> Brown: THANK YOU BOTH VERY MUCH.

>> PLEASURE.

>> THANKS FOR HAVING US.

>> Ifill: NOW, TO PRESIDENTIAL POLITICS. A SLEW OF NEW POLLS OUT TODAY SHOW AMERICANS WITH DEEP AND GROWING CONCERNS ABOUT THE PRESIDENT'S ECONOMIC LEADERSHIP. IN ADVANCE OF PRESIDENT OBAMA'S ADDRESS TO CONGRESS LATER THIS WEEK, REPUBLICAN PRESIDENTIAL CONTENDER MITT ROMNEY SAID TODAY HE CAN DO BETTER. JUDY WOODRUFF HAS OUR STORY.

>> Woodruff: WHETHER IT'S HIS OVERALL JOB APPROVAL RATING OR HIS STEWARDSHIP OF THE ECONOMY, PRESIDENT OBAMA TODAY FACED THE WORST POLLING NUMBERS OF HIS PRESIDENCY. THE NBC NEWS WALL STREET JOURNAL POLL FOUND 44% OF RESPONDENTS APPROVED OF THE PRESIDENT'S JOB PERFORMANCE. WHILE 51% DISAPPROVED. AN ABC NEWS "WASHINGTON POST" SURVEY SHOWED 62% OF THOSE QUESTIONED DISAPPROVE OF THE PRESIDENT'S HANDLING OF THE ECONOMY WHILE JUST 36% APPROVE. IN BOTH SURVEYS, JUST A FIFTH OF AMERICANS SAID THEY BELIEVE THE COUNTRY IS HEADED IN THE RIGHT DIRECTION. A RECORD LOW DURING MR. OBAMA'S TIME IN OFFICE. AT THE WHITE HOUSE THIS AFTERNOON, PRESS SECRETARY JAY CARNEY SAID MR. OBAMA WAS FOCUSED ON JOBS NOT POLLS.

>> HE FULLY UNDERSTANDS THE ANXIETY THAT IS OUT THERE AMONG THE AMERICAN PEOPLE ABOUT THE ECONOMY. THE FRUSTRATION AT THE PACE OF GROWTH, THE FRUSTRATION AT THE PACE OF JOB CREATION. AND THAT'S WHY HE FEELS THAT IT'S SO URGENT TO TAKE ACTION NOW AND NOT TO SIMPLY SAY, OH, WE SHOULDN'T DO ANYTHING AND THEN LET IT ALL BE DECIDED NEXT YEAR AFTER AN ELECTION.

>> Woodruff: THE POLL NUMBERS FOLLOWED FRIDAY'S REPORT THAT NET JOB GROWTH GROUND TO A HALT IN AUGUST. THEY ALSO RAISED THE STAKES HIGHER STILL WITH THE PRESIDENT'S JOB SPEECH TO CONGRESS ON THURSDAY NIGHT. TODAY THE TWO TOP REPUBLICANS IN THE HOUSE, SPEAKER JOHN BOEHNER AND MAJORITY LEADER ERIC CANTOR, SENT A LETTER TO THE PRESIDENT. THEY SAID NEITHER SIDE SHOULD APPROACH ECONOMIC POLICY AS AN ALL-OR-NOTHING SITUATION.

>> COMPETITION IS ALWAYS A GOOD THING.

>> Woodruff: IN THE MEANTIME ONE OF THE REPUBLICANS CAMPAIGNING FOR THE PRESIDENT'S JOB, MITT ROMNEY, PUT FORWARD HIS OWN PLAN IN LAS VEGAS. ROMNEY'S CAMP RELEASED A BOOKLET WITH 59 IDEAS AIMED AT JUMP-STARTING THE ECONOMY. THEY INCLUDE LOWERING THE CORPORATE TAX RATE TO 25%, DOWN FROM THE CURRENT 35%. AND CUTTING FEDERAL DISCRETIONARY SPENDING EXCEPT FOR DEFENSE AND HOMELAND SECURITY BY 5% IMMEDIATELY TO REDUCE THE ANNUAL BUDGET BY $20 BILLION. ROMNEY WOULD ALSO MAKE FEDERAL AGENCY'S OFFSET THE COST OF ANY NEW REGULATIONS ON BUSINESS BY DIALING BACK EXISTING RULES. THE FORMER MASSACHUSETTS GOVERNOR INSISTED HIS PLAN WOULD GET THE ECONOMY MOVING AGAIN.

>> IN THE FIRST FOUR YEARS, THIS WILL GROW THE ECONOMY AT APPROXIMATELY 4% PER YEAR FOR EACH OF THOSE FOUR YEARS. IT WILL ADD 11.5 MILLION NEW JOBS FOR AMERICANS. THIS IS A BUSINESS PLAN FOR THE AMERICAN ECONOMY. WE HAVE TO RECOGNIZE THAT OUR NATION IS IN COMPETITION WITH OTHER NATIONS AROUND THE WORLD. IF WE WANT TO CREATE JOBS WE HAVE TO HAVE THE BEST BUSINESS PLAN IN THE WORLD.

>> Woodruff: THE OBAMA RE-ELECTION CAMPAIGN RELEASED A STATEMENT SHORTLY AFTER ROMNEY'S REMARKS. IT READ WHILE MITT ROMNEY SPOKE TODAY ABOUT THE STRUGGLES OF THE MIDDLE CLASS, HE OFFERED A PLAN THAT WOULD TIP THE SCALES AGAINST HARD- WORKING AMERICANS. ROMNEY AND HIS FELLOW REPUBLICAN HOPEFULS GET ANOTHER OPPORTUNITY TO SELL THEIR IDEAS TOMORROW NIGHT WHEN THEY DEBATE IN CALIFORNIA. WE'RE JOINED NOW FROM LAS VEGAS BY ARI SHAPIRO FROM NPR. GOOD TO SEE YOU AGAIN.

>> THANKS FOR HAVING ME.

>> Woodruff: SO WE JUST HIGHLIGHTED A FEW OF THE POINTS IN THE ROMNEY PLAN. WHAT DO YOU THINK IS SIGNIFICANT ABOUT WHAT HE'S PUT OUT THERE NOW.

>> YOU KNOW, THE BROAD OUTLINES OF THE PLAN HIT SOME OF THE KEY THEMES OF THE REPUBLICAN PARTY FOR THE LAST SEVERAL YEARS: CUTTING TAXES, LIMITING REGULATIONS, SHRINKING GOVERNMENT, NEW DOMESTIC OIL AND GAS DRILLING. THOSE BROAD OUTLINES ARE THINGS WE'VE HEARD BEFORE. SOME OF THE SPECIFIC WAYS HE PROPOSES ACCOMPLISHING THOSE ARE NEW. FOR EXAMPLE, HE WANTS TO GIVE CONGRESS THE AUTHORITY TO GIVE A THUMBS UP OR THUMBS DOWN TO ANY REGULATION THAT'S PROPOSED BY AN EXECUTIVE AGENCY. SIMILARLY HE WANTS ANY NEW REGULATION TO BE MATCHED BY A ROLLBACK OF A REGULATION OF EQUAL SIZE. ANOTHER THING HE SAID TODAY THAT WE HADN'T HEARD FROM THE OTHER REPUBLICAN CANDIDATES IS HE WANTS TO IMPOSE SANCTIONS ON CHINA. HE CALLED CHINA A CHEAT, A CURRENCY MANIPULATOR. HE SAID THEY'RE STEALING AMERICAN INTELLECTUAL PROPERTY. SO WHILE THE BROAD OUTLINES OF THIS JOB CREATION PLAN LOOK PRETTY FAMILIAR, SOME OF THE SPECIFIC DETAILS ARE THINGS THAT WE HAVEN'T SEEN BEFORE.

>> Woodruff: I WAS CURIOUS ABOUT THE CHINA ASPECT OF WHAT HE PROPOSED. ARI, IS THIS SOMETHING... WHAT OF ECONOMISTS AND OTHER POLITICAL ANALYSTS, WHAT HAVE THEY BEEN SAYING ABOUT THAT? IS THAT SOMETHING THAT PEOPLE THINK COULD HAVE THE EFFECT THAT ROMNEY SAYS IT WOULD?

>> ROMNEY SAYS HE DOESN'T WANT TO START A TRADE WAR BUT HE DOESN'T WANT TO SURRENDER RIGHT OFF THE BAT. YOU KNOW, CHINA IS THE LARGEST HOLDER OF AMERICAN DEBT. SO WHEN IT COMES TO THE U.S. ECONOMY, CHINA HAS SIGNIFICANT CLOUT, SIGNIFICANT POWER. THAT'S WORRISOME TO AMERICANS. I THINK THERE'S SOME DISAGREEMENT ABOUT WHAT THE BEST APPROACH TO CHINA TO TAKE WOULD BE. BUT THE APPROACH THAT MITT ROMNEY LAID OUT TODAY SEEMS TO BE A BIT MORE AGGRESSIVE THAN THE OTHER REPUBLICANS ARE SUGGESTING.

>> Woodruff: ARE HIS PROPOSALS DIFFERENT FROM PRESIDENT OBAMA'S?

>> YOU KNOW WHAT WAS INTERESTING TO ME IS THAT WHILE THERE IS A LOT OF DIFFERENCE, THERE WERE A FEW AREAS WHERE I DON'T THINK PRESIDENT OBAMA OR MITT ROMNEY WOULD EMPHASIZE THIS BUT THERE WAS SOME COMMONALITY. FOR EXAMPLE ROMNEY SAID TODAY THAT CONGRESS NEEDS TO RIGHT AWAY PASS A FREE TRADE DEAL WITH COLOMBIA, PANAMA AND SOUTH KOREA. THOSE HAVE BEEN SITTING ON THE SHELF. PRESIDENT OBAMA HAS BEEN CALLING ON CONGRESS TO PASS THOSE FREE TRADE DEALS. ROMNEY SAID REPEATEDLY THAT HE BELIEVES BEING THE LEAD INNOVATOR IS GOING TO BE THE KEY TO AMERICA'S ECONOMIC FUTURE. HE SAID MANUFACTURING HAS TO BE THE CORE OF AMERICA'S ECONOMIC REBOUND. WELL, THOSE ARE BOTH THINGS THAT PRESIDENT OBAMA HAS TALKED ABOUT AS WELL. THE KEY DIFFERENCE IS THAT PRESIDENT OBAMA BELIEVES THAT GOVERNMENT INVESTMENTS AND GOVERNMENT SPENDING CAN BE SORT OF THE JUMP-START THAT GETS THE PRIVATE SECTOR GOING. MITT ROMNEY IN CONTRAST SAYS YOU HAVE TO SHRINK GOVERNMENT GET GOVERNMENT OUT OF THE WAY AND THEN GIVE THE PRIVATE SECTOR THE ROOM TO GROW.

>> Woodruff: LISTENING TO THE CONVERSATION, I DON'T KNOW IF YOU WERE ABLE TO HEAR THAT MY COLLEAGUE GEOFFREY BROWN JUST HAD ON THE INTERNATIONAL ECONOMY, WE'RE REMINDED AGAIN THERE ARE QUESTIONS ABOUT HOW THE STRUCTURAL... THE STRUCTURE OF THE ECONOMY IS CHANGING. IS THAT SOMETHING THAT THE PEOPLE AROUND MITT ROMNEY ACKNOWLEDGE AND TALK ABOUT OR ARE THEY JUST FOCUSED ON THE MISTAKES OF THE OBAMA ADMINISTRATION?

>> WELL, I THINK THEY'RE DOING BOTH. MITT ROMNEY USEDED A METAPHOR TODAY THAT WAS VERY EFFECTIVE WITH THE AUDIENCE WHERE HE SAID PRESIDENT OBAMA IS TAKING A PAY PHONE APPROACH TO A SMART PHONE ECONOMY. HE JOKED THAT PRESIDENT OBAMA KEEPS PUTTING THE QUARTERS IN THE PAY PHONE WONDERING WHY IT'S NOT WORKING. HE SAID MR. PRESIDENT THE PAY PHONE IS DISCONNECTED. IT WAS... IT RESONATED REALLY STRONGLY WITH THE AUDIENCE. IT WAS LAUGHING AND APPLAUDING. I THINK IT WAS A METAPHOR TO EMPHASIZE THAT HE THINKS THE ECONOMY HAS OUTPACED THE OBAMA ADMINISTRATION AND THAT NEW APPROACHES ARE NECESSARY. NOW THAT SAID, MANY OF THE APPROACHES THAT MITT ROMNEY SUGGESTED ARE APPROACHES THAT THE REPUBLICAN PARTY HAS BEEN SUGGESTING FOR SOME TIME.

>> Woodruff: WE KNOW YOU'VE COVERED THE WHITE HOUSE. YOU'VE COVERED PRESIDENT OBAMA. ANY SENSE RIGHT NOW OF HOW THEY'RE DEALING WITH THE JUST SORT OF RELENTLESS BAD NEWS ON THE ECONOMY AND HOW THAT IS AFFECTING THEIR APPROACH TO THIS CAMPAIGN?

>> YOU KNOW, PRESIDENT OBAMA HAS BEEN TRYING FOR THE LAST TWO YEARS TO CREATE NEW JOBS. HIS PROBLEM NOW IS THAT ON THURSDAY HE HAS TO DELIVER A SPEECH THAT NEEDS TO PERSUADE THE AMERICAN PEOPLE THAT SUDDENLY THERE ARE MORE NEW IDEAS TO CREATE MORE JOBS AND ALSO THAT THESE IDEAS COULD CONCEIVEABLE GET THROUGH CONGRESS. THAT'S AT LEAST WHAT HE HAS TO DO IF THE GOAL IS TO ACTUALLY CREATE NEW JOBS. IF THE GOAL IS TO DISTINGUISH HIMSELF FROM THE REPUBLICAN PARTY AND ARGUE THAT THE DEMOCRATIC PARTY AND THE OBAMA RE-ELECTION CAMPAIGN HAS THE ANSWER WHILE THE REPUBLICANS DO NOT, WELL THEN THESE PROPOSALS DON'T HAVE TO GET THROUGH CONGRESS. THEY JUST HAVE TO WIN OVER THE AMERICAN PEOPLE. ONE WAY OR THE OTHER THOUGH AFTER TWO YEARS OF THE OBAMA ADMINISTRATION AND THESE REALLY DIFFICULT ECONOMIC NUMBERS COMING WEEK AFTER WEEK, MONTH AFTER MONTH, IT'S A VERY, VERY TALL ORDER FOR HIM.

>> Woodruff: ALL RIGHT. ARI SHAPIRO, WE'LL BE WATCHING THAT. WE'LL BE WATCHING YOUR COVERAGE OF MITT ROMNEY. WE'VE BE WATCHING ALL THESE REPUBLICAN CANDIDATES AS WELL. THANK YOU. GOOD TO SEE YOU AGAIN.

>> GOOD TO TALK TO YOU.

>> Brown: NEXT, THE SECOND IN OUR SERIES OF REPORTS ON HOW THE ATTACKS OF 9/11 HAVE AFFECTED PEOPLE IN THIS COUNTRY AND AROUND THE WORLD. TONIGHT, WE LOOK AT THE DESIGN AND ENGINEERING OF SKYSCRAPERS, THEN AND NOW. NEWSHOUR SCIENCE CORRESPONDENT MILES O'BRIEN HAS OUR STORY, PRODUCED IN COLLABORATION WITH THE PBS PROGRAM, "NOVA." WE MET ON THE SIDEWALK IN FRONT OF 90 WEST. BUILT IN 1907 IT IS NOW AN APARTMENT BUILDING. NORMAN STILL MARVELS AS HOW WELL IT ENDURED THE CONFLAGRATION TEN YEARS AGO.

>> THIS BUILDING HAD ONE STEEL BEAM THAT WAS EFFECTED BY HEAT. IT DROPPED A TOTAL OF 1.5 INCHES. THAT WAS A HORIZONTAL COLUMN SO IT'S NOT A CRITICAL LOAD- BEARING MEMBER. THE ENTIRE STRUCTURAL SKELETON REMAINED FINE. AS YOU SEE, IT'S STILL IN USE TODAY.

>> Reporter: ONE BEAM SAGED? THAT'S IT.

>> ONE BEAM.

>> Reporter: 90 WEST SURVIVED 9/11 BECAUSE SKY SCRAPERS OF THAT VINTAGE WERE BUILT LIKE FORTRESSES.

>> EVERYTHING WAS REINFORCED. YOU HAD A STRUCTURAL, A HEAVY STRUCTURAL STEEL SKELETON MUCH LIKE THE TOWERS. BUT THESE WERE PROTECTED WITH POURED CONCRETE OR TERRACOTTA BLOCK TILE WHICH GIVES TREMENDOUS RESISTANCE TO FIRE. IT'S BASICALLY A REDUNDANT SYSTEM.

>> Reporter: OF COURSE SKY SCRAPER DESIGN AND CONSTRUCTION HAS EVOLVED OVER THE YEARS. THE NEWER GLASS SKY SCRAPERS ARE HALF AS HEAVY PER SQUARE FOOT AS THE OLD CONCRETE FORTRESSES. IS IT POSSIBLE TO DO BOTH, TO BUILD THE GLEAMING GLASS TOWERS AND PUT ENOUGH TECHNOLOGY IN THEM TO MAKE THEM AS SAFE AS THIS BUILDING?

>> THE GLASS TOWERS ARE A PROBLEM. THE GLASS SKIN IS A WEAK POINT. BUT YOU CAN BUILD BUILDINGS THAT ARE STRUCTURALLY STABLE AND CAN WITHSTAND THE FIRE LONG ENOUGH TO ALLOW THE FIRE DEPARTMENT TO SUPPRESS IT. WITHOUT GIVING IN TO THE PRESSURES OF THE ECONOMY. YES, THAT'S POSSIBLE.

>> Reporter: THAT IS PRECISELY WHAT THEY'RE TRYING TO PROVE WITH THE DESIGN AND CONSTRUCTION OF THE $3 BILLION ONE WORLD TRADE CENTER. DAVID CHILDS IS THE ARCHITECT.

>> IT IS VERY IMPORTANT THAT WE DID REBUILD. IT GAVE US A CHANCE TO REBUILD BETTER.

>> Reporter: CHILDS AND HIS TEAM HAVE AIMED TO STRIKE A BALANCE BETWEEN ECONOMICS, AESTHETICS, SAFETY AND SECURITY. HOW THOSE COMPETING MANDATES ARE SHAPING THIS LANDMARK BUILDING IS THE FOCUS OF A PBS NOVA PROGRAM, ENGINEERING GROUND ZERO, WHICH CHRONICLES THE RISE OF ONE WORLD TRADE FROM THE INSIDE OUT. AT THE CORE OF THIS STORY, THE CORE OF THE BUILDING.

>> THE OUTSIDE OF THE CORE, THIS WHOLE CENTER SPINE OF THE BUILDING, IS OUT OF CONCRETE.

>> Reporter: IT IS SIX FEET THICK. IT'S NOT JUST ANY CONCRETE. A NEW FORMULATION THAT MAKES IT MUCH STRONGER. THE END RESULT? CONCRETE THAT CAN WITHSTAND LOADS OF 14,000 FEET PER SQUARE INCH, THREE TIMES THE STRENGTH OF THE GARDEN VARIETY. BOB MACKY IS AN ENGINEER WITH THE PORT AUTHORITY OF NEW YORK AND NEW JERSEY.

>> THIS IS A CONCRETE SPECIMEN THAT WILL BE USED FOR TOWER ONE AT THE WORLD TRADE CENTER. IF YOU COULD SET THIS SHRILL INDEPENDENTER AND PUT A PLATFORM ON IT, YOU CAN ACCOMMODATE 1,000 AMERICANS STANDING ON THIS CYLINDER, YOU KNOW, NORMAL PEOPLE 175 POUNDS SOME WEIGHT. 1,000 PEOPLE CAN BE SUPPORTED BY THIS FOUR-INCH DIAMETER CYLINDER.

>> Reporter: THE COLLAPSE OF THE TWIN TOWERS SERVED AS A STARK AND STUNNING REMINDER TO ARCHITECTS AND ENGINEERS OF THE VALUE OF USING CONCRETE TO PROTECT SKY SCRAPERS FROM THE RAVAGES OF FIRE.

>> SO THIS IS THE RECONSTRUCTION OF THE FIRES IN THE WORLD TRADE CENTER. AIRCRAFT IMPACT. HOW THE PLANES HIT. WHAT DAMAGE THEY DID.

>> Reporter: STRUCTURAL ENGINEER CHARLIE THORNTON IS A TOWERING PRESENCE IN THE WORLD OF TOWERING BUILDINGS. HE HAS ENGINEERED MANY OF THE WORLD'S ICONIC BUILDINGS INCLUDING THE TOWERS IN MALAYSIA, THE TALLEST TWIN SKY SCRAPERS IN THE WORLD. HE HELPED WRITE THE DETAILED ENGINEERING REPORT OF HOW AND WHY THE WORLD TRADE CENTER TOWERS COLLAPSED, SOMETHING NO ONE, INCLUDING HIM, EVER IMAGINED.

>> THE PLANES KNOCKED OUT MAYBE 15% OF THE VERTICAL CAPACITY OF THE BUILDING. IF YOU LOOK AT THE PICTURES, THEY KNOCKED OUT ABOUT 35 COLUMNS LET'S SAY ON THE NORTH SIDE OF THE NORTH WALL. A COUPLE OF INSIDE COLUMNS PROBABLY.

>> Reporter: IT WAS FIRE THAT BROUGHT THE BUILDINGS DOWN. BUT WHY? SKY SCRAPERS HAVE BECOME REAL LIFE TOWERING INFERNOS ON SEVERAL OCCASIONS OVER THE YEARS. NONE OF THEM CAME EVEN CLOSE TO CRUMBLING. THE STEEL CORES OF THE TWIN TOWERS WERE COVERED IN DRY BALL RATHER THAN CONCRETE. NO MATCH FOR THE IMPACT OF THE AIRLINERS.

>> WHERE THE PLANES HIT, THAT SHEET ROCK WAS NOT STRONG ENOUGH TO TAKE THAT PUNCHING SHEER WHICH OF COURSE THE CONCRETE IS.

>> Reporter: BUT THERE IS MORE TO CHILDS' CORE DESIGN THAN A LOT OF SUPER STRONG CONCRETE. THE STAIRS ARE MUCH WIDER, AND THE AIR INSIDE WILL BE KEPT AT A HIGHER PRESSURE THAN THE REST OF THE BUILDING TO KEEP SMOKE OUT IN A FIRE. THE FIRST 19 STORIES OF THIS BUILDING ARE BUILT LIKE A BUNKER TO PROTECT THIS STRUCTURE FROM THE FORCE OF A CAR BOMB. EVENTUALLY THEY'LL BE COVERED OVER WITH GLASS. BOMB-RESISTANT GLASS.

>> BECAUSE OF THE NATURE OF THE DESTRUCTION THAT WAS HERE BEFORE, YOU DON'T WANT TO GIVE THE IMPRESSION THAT THIS IS A PLACE OF REFUGE AND OF FEAR. YOU WANT IT TO BE A SENSE OF OPENNESS TO IT. THIS BUILDING NEEDS TO APPEAR OPEN.

>> Reporter: BUT ARE ALL THE SAFETY FEATURES ENOUGH? FORMER FDNY FIRE CHIEF DAN DAILY IS LEARY. HE OFFERS A VERY PERSONAL ENDORSEMENT OF THE OLD-STYLE BUILDINGS.

>> WHEN WE GOT HERE, WE FOUND OUT THERE WAS A FIRE ON THE 51st FLOOR.

>> Reporter: IN 1990 HE FOUGHT A FIRE AT THE EMPIRE STATE BUILDING.

>> THE FIRE TOOK SEVERAL HOURS TO GO OUT. IT PROBABLY BURNED ITSELF OUT. I MEAN EACH TYPE OF BUILDING YOU HAVE THICK CONCRETE WALLS AND FLOORS. IT WAS REALLY LIKE A PIZZA OVEN. ALL THE HEAT WAS CONTAINED WITHIN THAT FLOOR. IT WASN'T PASSING UP TO THE OTHER FLOORS AND SPREADING AROUND THE BUILDING BUT WHAT HAPPENS IN A FIRE LIKE THAT IS IT'S SUPER HEATED INSIDE. EVERYTHING BECOMES INCINERATED IN THAT AREA.

>> Reporter: IT DIDN'T SPREAD BEYOND THE 51st FLOOR. WHY DON'T THEY BUILD THEM LIKE THIS ANYMORE?

>> ECONOMICS. ECONOMICS AND AESTHETICS. THE AMOUNT OF MONEY IT WOULD COST TO BUILD ONE OF THESE THESE DAYS IS PROBABLY TWICE AS MUCH AS OTHER CONSTRUCTION. PEOPLE DON'T WANT TO BUILD A FORTRESS. THEY WANT SOMETHING WITH LIGHT AND GLASS AND AIRY.

>> Reporter: LOTS OF GLASS AND WIDE OPEN FLOOR PLANS ARE WHAT DEVELOPERS WANT SO ARC TETS AND BUILDERS DELIVER. ARCHITECTURE PROFESSOR SAYS THERE IS NO TURNING BACK TO THE PRE-MODERN ERA BUT HE SAYS ONE WORLD TRADE IS REALLY A CONCRETE FORTRESS IN GLASS CLOTHING.

>> WHEN EVENTS LIKE 9/11 OCCUR, THEY ACCELERATE AND INTENSIFY THAT ONGOING INNOVATION. SO I THINK THAT CONTEXT NEEDS TO BE APPRECIATED. SO WHAT DID IT AWAKEN IN US? WHAT DID WE START? WHAT WERE WE... WHAT BECAME MISSION CRITICAL TO AVOID FRANKLY THE PROFESSIONAL IMPAIRMENT AND THE CATASTROPHE THAT COULD HAPPEN IN OTHER BUILDINGS LIKE THE WORLD TRADE CENTER AROUND THE WORLD?

>> CHARLIE THORNTON IS PUSHING AN OVER-THE-TOP SKY SCRAPER BUILDING TECHNIQUE THAT TAKES THE NOTION OF A STURDY INNER FORTRESS, AN OPEN FLOOR PLAN AND A GLASS SKIN TO A NEW LEVEL.

>> BUT THESE CORES ARE CONCRETE CORES SO THEY'RE LIKE BUNKERS. THEY GO UP AT THE RATE OF A FOOT AN HOUR. 24 HOURS A DAY.

>> Reporter: USING A TECHNIQUE CALLED SLIP FORMING, THE CONCRETE CORES ARE POURED FIRST. AND THEN THE FLOORS ARE BUILT ENTIRELY ON THE GROUND, HOISTED UP AND BOLTED INTO PLACE. THE CORES ELIMINATE COLUMNS AND THUS POTENTIAL POINTS OF FAILURE.

>> YOU WOULD SUGGEST THIS IS CLEARLY A BETTER WAY TO BUILD A BUILDING?

>> I BELIEVE IT'S FASTER. I BELIEVE THE QUALITY IS BETTER. I BELIEVE THE LATERAL LOAD RESISTING FOR EARTHQUAKES AND WIND IS BETTER. BECAUSE WITH NO COLUMNS ALL OF THE WEIGHT OF THE BUILDING IS COMPRESSING THE CORE.

>> Reporter: THORNTON SAYS HIS TECHNIQUE COSTS UP TO 30% LESS. HE HAS ABOUT 15 CUSTOMERS IN THE DESIGN PHASE. HE BELIEVE IT IS JUST A MATTER OF TIME BEFORE SOMEONE BUILDS A MILE-HIGH TOWER THREE TIMES HIGHER THAN ONE WORLD TRADE WILL BE.

>> IT'S LIKE BEING THE JETTISONS.

>> YEAH. ALL THAT STUFF FROM THE JETSONS WILL HAPPEN.

>> Reporter: DO YOU THINK?

>> ABSOLUTELY.

>> Reporter: CAN THAT POSSIBLY BE SAFE? FIREFIGHTERS SAY ONCE BUILDINGS GOT TAUMER THAN THEIR LADDERS, ABOUT TEN STORIES, THE ONUS OF SAFETY SHIFTED TO THE ARCHITECTS, ENGINEERS AND DEVELOPERS. JOHN NORMAN WONDERS IF THEY REALLY LISTEN TO THE PEOPLE WHO CLIMB UP THE STEPS WHEN THE REST OF US ARE HEADED DOWN.

>> THERE WAS A LINE IN THE MOVIE THE TOWERING INFERNO WHERE STEVE McQUEEN COMES OUT OF THE BURNING BUILDING AND THE ARCHITECT IS SITTING THERE ON THE CURB.

>> YOU KNOW, ONE OF THESE DAYS, YOU'RE GOING TO KILL 10,000 IN ONE OF THESE FIRE TRAPS. AND I'M GOING TO KEEP EATING SMOKE AND BRINGING OUT BODIES. UNTIL SOMEBODY ASKS US HOW TO BUILD 'EM.

>> THAT'S VERY TRUE. I MEAN, WE KNOW THE ANSWERS. THE QUESTION IS, WILL THEY WANT TO HEAR THE ANSWERS?

>> Reporter: TEN YEARS AFTER 9/11 ONE WORLD TRADE CENTER SEEMS TO PROVE SOMEONE IS. ANYTHING LESS WOULD BE AN INSULT TO THE 3,000 PEOPLE WHO DIED HERE. AND IF IT IS A SUCCESS, IT MAY BE A MODEL FOR HOW TALL BUILDINGS ARE BUILT EVERYWHERE.

>> Brown: NOVA HAS HAD BEHIND THE SCENES ACCESS TO THE CONSTRUCTION OF ONE WORLD TRADE CENTER AND TO THE NEW 9/11 MEMORIAL. ITS DOCUMENTARY "ENGINEERING GROUND ZERO" AIRS TOMORROW NIGHT ON MOST PBS STATION. CHECK YOUR LOCAL LISTINGS FOR THE TIME.

>> Ifill: FINALLY TONIGHT, THE NEW FUROR OVER WIKILEAKS. RAY SUAREZ HAS THAT STORY.

>> Suarez: FOR NEARLY TWO YEARS, THE ONLINE ORGANIZATION WIKILEAKS AND FIVE MEDIA PARTNERS IN THE U.S. AND EUROPE HAVE BEEN PUBLISHING U.S. DIPLOMATIC CABLES THAT OFFERED SOME INSIGHTS INTO POLICY-MAKING AND TITILLATING GOSSIP ABOUT WORLD LEADERS. BUT THE LATEST DOCUMENT DUMP OF MORE THAN A QUARTER MILLION CABLES HAS BROUGHT NEW CONTROVERSY. BECAUSE OF WHAT WAS DESCRIBED AS A SERIES OF TECHNICAL ERRORS, THE LATEST RELEASE DISCLOSED THE NAMES OF PEOPLE-- ACTIVISTS, HUMAN RIGHTS ADVOCATES, AND DISSIDENTS-- WHO HAD SPOKEN CONFIDENTIALLY TO U.S. DIPLOMATS. WIKILEAKS' MEDIA PARTNERS, INCLUDING THE "NEW YORK TIMES," BRITAIN'S "GUARDIAN," AND SEVERAL NONGOVERNMENT AND HUMAN RIGHTS ORGANIZATIONS-- CONDEMNED THE DISCLOSURES, SAYING THEY COULD PUT SOURCES AT RISK. FOR MORE, WE GO TO KIM ZETTER, WHO HAS BEEN COVERING THE STORY FOR "WIRED" MAGAZINE. KIM, HOW IS THIS RELEASE DIFFERENT FROM THE PATTERN SET UP EARLIER BY WIKILEAKS?

>> WELL, WHEN WIKILEAKS AND ITS MEDIA PARTNERS BEGAN PUBLISHING THE CABLES BACK IN NOVEMBER, THEY USED WHAT WIKILEAKS CALLED HARM ONIZATION WHICH WAS BLACKING OUT THE NAMES OF INTELLIGENCE SOURCES, INFORMANTS WHO HAD SPOKEN WITH U.S. DIPLOMATS. IN THIS LATEST DUMP OF THE CABLE DATABASE, WIKILEAKS HASN'T BLACKED OUT ANY OF THOSE NAMES SO WHAT WE HAVE ARE ABOUT BETWEEN 2,000 AND 3,000 NAMES OF PEOPLE IDENTIFIED BY U.S. DIPLOMATIC SOURCES WHOSE IDENTITY SHOULD HAVE BEEN PROTECTED. WE HAVE ABOUT 150 WHISTLE BLOWERS IDENTIFIED. ABOUT 1,000 ACTIVISTS NAMED IN THE DOCUMENTS. SO PREVIOUSLY ALL OF THESE WOULD HAVE BEEN BLACKED OUT AND PROTECTED.

>> Suarez: HOW DOES WIKILEAKS EXPLAIN THIS DIFFERENT APPROACH?

>> WELL, WIKILEAKS IS SAYING THAT THEY ARE RELEASING THE STATE A BASE BECAUSE IT'S ALREADY OUT THERE ANYWAY. IT WAS RELEASED INADVERTENTLY IN PART BY WIKILEAKS SUPPORTERS AND IT WAS... THERE WAS A PHRASE THAT WAS PROTECTING THE DOCUMENT BUT THAT WAS ALSO PUBLISHEDED. WIKILEAKS WAS SAYING THE CAT IS OUT OF THE BAG. SO WE'RE JUST GOING TO RELEASE IT ANYWAY.

>> Suarez: BRITAIN'S GUARDIAN NEWSPAPER WAS CRITICIZED BY WIKILEAKS FOR SORT OF MIDWIFING THIS RELEASE. HAS WIKILEAKS PIVOTED, TAKEN THE EMPHASIS OFF THE GUARDIAN AND STARTED TO SAY, WELL, THIS IS WHAT IT INTENDED TO DO ANYWAY, SORT OF CHANGED ITS TONE?

>> NO. IT STILL IS LAYING BLAME AT THE GUARDIAN'S FEET. WHAT HAPPENED HERE WAS LAST YEAR WIKILEAKS HAD MADE AVAILABLE THIS CACHE OF CABLES TO THE GUARDIAN WHEN THEY WERE DISCUSSING COLLABORATION. THEY HAD TOLD THE GUARDIAN EDITOR THAT THE FILE ITSELF WOULD BE ON A WIKILEAKS SUB DIRECTORY SERVER AND IT WOULD BE AVAILABLE ONLY FOR A SHORT PERIOD OF TIME. THE FOUNDER JULIAN ASSANGE HAD GIVEN THE EDITOR A PASS PHRASE TO OPEN THE FILE. THE EDITOR ASSUMED THAT THE PASS PHRASE ITSELF, THE PASSWORD WOULD EXPIRE AFTER A CERTAIN TIME ALONG WITH THE FILE. OF COURSE THAT'S NOT THE CASE. THAT'S NOT HOW IT WORKS. WIKILEAKS WAS SUPPOSED TO REMOVE THE DOCUMENTS OR WAS SUPPOSED TO REMOVE THE FILE FROM THAT SERVER AFTER THE GUARDIAN ACCESSED IT AND NEVER DID SO THE FILE WAS ALWAYS LEFT ONLINE.

>> Suarez: JUST TO BE CLEAR. THE ENTIRE PILE OF DOCUMENTS AND THE PASSWORD WERE AT ONE TIME JUST SITTING THERE ON THE INTERNET IF SOMEBODY WANTED TO LOOK AT IT.

>> THE PASSWORD WASN'T ON THE WIKILEAKS SERVER. THE FILE WAS. WHAT HAPPENED WAS THE GUARDIAN ACTUALLY PUBLISHED THE PASSWORD IN A BOOK THAT IT PUBLISHED BACK IN FEBRUARY ABOUT ITS COLLABORATION WITH WIKILEAKS. IT'S UNCLEAR EXACTLY WHY THEY FELT IT NECESSARY TO DISCLOSE THE PASSWORD AT THAT POINT BUT THEY THOUGHT THAT IT WAS NO LONGER A RELEVANT PASSWORD.

>> Suarez: EARLIER YOU TALKED ABOUT THE NAMES OF SOURCES AND OTHER PEOPLE THAT DIPLOMATS HAVE SPOKEN TO OVER THE YEARS. HAS THIS FOR SOME OF THEM MOVED BEYOND ANNOYANCE OR EMBARRASSMENT TO SOMETHING THAT MAY EVEN PUT THEM IN JEOPARDY?

>> YEAH. IT'S UNCLEAR PRESENTLY IF IT HAS ACTUALLY AFFECTED ANYONE BUT THE RISK IS THERE. I MEAN THESE PEOPLE HAVE BEEN IDENTIFIED. MANY OF THEM ARE IN REPRESSIVE REGIMES WHO COULD ARREST THEM AND TORTURE THEM. IT'S REALLY UNCLEAR AT THIS POINT WHAT MIGHT HAPPEN TO THEM. THE U.S. DIPLOMATIC... THE U.S. STATE DEPARTMENT HAD BEEN NOTIFYING PEOPLE PRIOR TO PUBLICATION GTS PRIOR TO THIS LATEST PUBLICATION ABOUT THE RISK THAT THEIR NAMES MIGHT BE EXPOSED BUT IT'S UNCLEAR WHETHER OR NOT THOSE PEOPLE CAN ACTUALLY BE PROTECTED.

>> Suarez: AFTER THE BLAST FROM WIKILEAKS, THE GUARDIAN FOR ITS PART SAID THE DECISION TO PUBLIC WAS ASSANGE'S AND HIS ALONE BUT THEY ADDED INTERESTINGLY WE'RE LEARNING IN NUMEROUS WAYS HOW HARD IT IS IN A DIGITAL AGE TO KEEP CONTROL OF INFORMATION. DO YOU FIND THAT'S TRUE?

>> YEAH. YOU KNOW, IT'S KIND OF CLEAR THAT THIS WAS AN INEVITABILITY IN REGARDS TO WIKILEAKS BECAUSE WIKILEAKS IS SUCH A DISJOINTED ORGANIZATION. PEOPLE JOIN IT. THEY LEAVE IT ON A REGULAR BASIS. SO IT'S UNCLEAR EXACTLY HOW THEY CAN MAINTAIN CONSTANT AND CONSISTENT CONTROL OVER THE DATA THAT THEY HAVE ESPECIALLY IF THEY'RE SHARING IT WITH MEDIA PARTNERS.

>> Suarez: NOW THAT IT'S ALL OUT THERE, WHAT HAVE THEY GOT LEFT? DOES IT LOSE SOME OF ITS POWER ONCE IT'S ALL RELEASED?

>> WELL, I THINK IT'S 250,000 CABLES AND PEOPLE ARE STILL GOING THROUGH THEM. I THINK PEOPLE WILL BE FINDING GEMS WITHIN THEM FOR MANY WEEKS MAYBE EVEN MONTHS TO COME. IT'S UNCLEAR WHAT ELSE WIKILEAKS HAS IN ITS CACHE BESIDES THESE DOCUMENTS. IF THIS IS, YOU KNOW, THE FINAL SORT OF BURST OF WIKILEAKS' SECRETS, THEN IT REMAINS TO BE SEEN WHAT ELSE MIGHT BE EXPOSED FROM THEM.

>> Suarez: KIM ZETTER OF WIRED MAGAZINE, THANKS FOR JOINING US.

>> THANKS FOR HAVING ME.

>> Brown: AGAIN, THE MAJOR DEVELOPMENTS OF THE DAY. THE U.S. POSTMASTER GENERAL WARNED THAT HIS AGENCY IS NOW ON THE "BRINK OF DEFAULT." WARNINGS FROM THE REMNANTS OF TROPICAL STORM LEE EXTENDED ALL THE WAY INTO NEW ENGLAND AS THE SYSTEM PUSHED NORTH. AND STOCKS TOOK ANOTHER HIT AMID RENEWED FEARS ABOUT EUROPEAN DEBT. THE DOW JONES INDUSTRIAL AVERAGE LOST MORE THAN 100 POINTS. WE GO TO HARI SREENIVASAN FOR MORE ABOUT OUR 9/11 COVERAGE ONLINE.

>> Sreenivasan: YOU MAY HAVE SEEN OUR VIDEO QUILT PROJECT, WHERE PEOPLE AROUND THE COUNTRY COMMENT ON WHAT'S CHANGED, A DECADE AFTER THE ATTACKS. ON OUR SITE FOR STUDENTS AND TEACHERS, YOUNG PEOPLE REFLECT ON HOW THE EVENT AFFECTED THEIR GENERATION. ON THE PBS PROGRAM "P.O.V." TONIGHT IS THE DOCUMENTARY "BETTER THIS WORLD." IT'S THE TALE OF A FAILED PLOT TO FIREBOMB A POLITICAL CONVENTION. WE TALKED TO THE FILMMAKERS EARLIER THIS YEAR. FIND THAT ON THE RUNDOWN. ALL THAT AND MORE IS ON OUR WEB SITE, newshour.pbs.org. JEFF?

>> Brown: AND THAT'S THE NEWSHOUR FOR TONIGHT. ON WEDNESDAY, WE'LL LOOK AT A SECURITY EFFORT TO SPOT TERRORISTS AT ONE OF AMERICA'S BIGGEST SHOPPING MALLS. I'M JEFFREY BROWN.

>> 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. BNSF.

>> 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.