PBS NewsHour; June 9, 2011 3:00pm-4:00pm PDT

Captioning sponsored by MacNEIL/LEHRER PRODUCTIONS

>> Brown: SWELTERING TEMPERATURES BLASTED HALF THE COUNTRY TODAY AS A RECORD- BREAKING HEAT WAVE GRIPPED STATES FROM THE SOUTH TO THE GREAT LAKES. GOOD EVENING. I'M JEFFREY BROWN.

>> Woodruff: AND I'M JUDY WOODRUFF. ON THE NEWSHOUR TONIGHT, RAY SUAREZ HAS THE LATEST ON THE EXTREME WEATHER AND THE EFFORTS TO CONTAIN THE MAMMOTH WILDFIRE BLAZING IN ARIZONA.

>> Brown: THEN, WE UPDATE THE TURMOIL IN SYRIA, AS THOUSANDS OF REFUGEES STREAM ACROSS THE BORDER INTO TURKEY TO FLEE THE DEADLY VIOLENCE.

>> Woodruff: WE ZERO IN ON THE BUDGET CHALLENGES AHEAD FOR THE PENTAGON AND THE MAN TAPPED TO HEAD IT NEXT, LEON PANETTA.

>> THE NEXT SEG OF DEFENSE WILL BE REQUIRED TO JUGGLE THE COMPETING DEMANDS ON OUR FORCES WHILE WASHINGTON STRUGGLES WITH AN EXTREMELY CHALLENGING FISCAL ENVIRONMENT.

>> Brown: WE CONTINUE OUR COLLABORATION WITH "THE ECONOMIST" MAGAZINE TO HIGHLIGHT THE ART OF FILMMAKING. TONIGHT, SAVING THE RAINFORESTS IN HONDURAS FROM DESTRUCTIVE FARMING PRACTICES.

>> YOU'RE LOOKING AT A CATASTROPHE, 1 BILLION TONS OF CARBON STRAIGHT UP INTO THE ATMOSPHERE ANNUALLY.

>> Woodruff: AND MARGARET WARNER EXAMINES WHAT DISSENT WITHIN THE RANKS OF OIL PRODUCING NATIONS MEANS FOR OIL PRICES HERE IN THE U.S.

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

>> OIL COMPANIES HAVE CHANGED MY COUNTRY.

>> OIL COMPANIES CAN MAKE A DIFFERENCE.

>> WE HAVE THE CHANCE TO BUILD THE ECONOMY.

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

>> ... AND OUR COMMUNITIES.

>> IN ANGOLA, CHEVRON HELPS TRAIN ENGINEERS, TEACHERS AND FARMERS; LAUNCH HEALTH PROGRAMS.

>> IT'S NOT JUST GOOD BUSINESS.

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

>> IT'S MY COUNTRY'S FUTURE.

>> 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.

>> Brown: A LATE-SPRING HEAT WAVE BURNED ITS WAY INTO THE RECORD BOOKS IN THE EASTERN U.S. TODAY, CAUSING AT LEAST SEVEN DEATHS. AND IN THE WEST, AN INFERNO OF A DIFFERENT KIND-- AN OUT-OF- CONTROL WILDFIRE-- RAGED ON. RAY SUAREZ HAS THE STORY.

>> Suarez: AGAIN AND AGAIN TODAY, TANKER PLANES SWOOPED OVER THE MOUNTAINS OF EASTERN ARIZONA, DROPPING CLOUDS OF REDDISH-ORANGE RETARDANT, AND HOPING TO TAMP DOWN THE SO- CALLED "WALLOW" FIRE. THE MASSIVE BLAZE HAS BURNED AN AREA COMPARABLE IN SIZE TO PHOENIX AND THREATENS SEVERAL SMALL TOWNS IN ITS PATH. FIRE INFORMATION OFFICER JIM WHITTINGTON.

>> WE'RE A LONG WAYS FROM TALKING ABOUT CONTAINMENT. WE'RE JUST TRYING TO CHECK THE SPREAD RIGHT NOW AND WE'RE DOING THE BEST WE CAN ON THAT.

>> Suarez: AS THE FIRE ADVANCED, AUTHORITIES FORCED A MANDATORY EVACUATION OF THE NEARLY 7,000 RESIDENTS OF SPRINGERVILLE AND EAGAR.

>> IS ANYBODY IN HERE?

>> Suarez: AND THERE WAS THE SMOKE, AN ACRID HAZE THAT BLANKETED THE REGION AND MADE BREATHING DIFFICULT. SOME OF THOSE WHO FLED SPRINGERVILLE TOOK TO NEARBY SHELTERS.

>> AND I STILL SMELL SMOKE. I STILL SMELL THAT SMOKE. MY EYES ARE STILL ITCHY AND BURNY, BUT NOT AS BAD.

>> Suarez: HIGH WINDS FULL OF BURNING EMBERS ALSO CARRIED THE THREAT OF FLAMES AND SMOKE FAR FROM THE MAIN BODY OF THE FIRE. CREWS WORKED OVERTIME TO SMOTHER FLARE-UPS NEAR HIGH-VOLTAGE POWER LINES. OFFICIALS SAID THE LINES WERE IN NO IMMEDIATE DANGER. AND THE FIRE INFORMATION OFFICER VOICED HOPE.

>> IN TERMS OF OPTIMISM, TODAY, THE BEST THING I CAN SAY IS THAT THE WEATHER'S GOING TO BE A LITTLE BIT MORE MODERATED THAN WHAT WE'VE SEEN OVER THE LIFE OF THIS FIRE, AND IT'S GOING TO GIVE US AN OPPORTUNITY TO GET SOME WORK DONE ON THAT TOP CORNER. AND WE'RE GOING TO WORK REALLY HARD TO PULL THAT OFF TODAY.

>> Suarez: AT THIS POINT, NO SERIOUS INJURIES FROM THE WALLOW FIRE OR TWO SMALLER FIRES HAVE BEEN REPORTED, BUT FARTHER EAST...

>> IT'S BLAZING! I'M SWEATING BULLETS!

>> Suarez: MUCH OF THE EASTERN HALF OF THE COUNTRY WAS SUFFERING UNDER ROASTING HEAT AGAIN TODAY. TEMPERATURES USUALLY RESERVED FOR AUGUST-- IN THE 90s, AND EVEN OVER 100 DEGREES-- WERE RECORDED IN MANY PLACES.

>> I'M JUST ABOUT DONE, WELL DONE.

>> Suarez: EXCESSIVE HEAT WARNINGS WERE ISSUED IN WISCONSIN AND MINNESOTA, WHERE IT WAS SO HOT ROADS BUCKLED. AND THE SHORES OF LAKE MICHIGAN WERE PACKED IN CHICAGO. TEMPERATURES IN THE WINDY CITY WERE THE HIGHEST IN FIVE YEARS, JUST A FEW MONTHS AFTER A WINTER THAT SAW RECORD COLD AND SNOW.

>> WINTER TIME, I CAN'T WAIT FOR THE SUMMER. BRING IT ON, BRING IT ON. SUMMER GET HERE, I'M READY FOR THE WINTER AGAIN.

>> Suarez: RECORDS ALSO FELL UP AND DOWN THE EAST COAST. IN NEW YORK CITY, THOSE BRAVE ENOUGH TO VENTURE OUT ENDURED 97-DEGREE HEAT.

>> IT'S REALLY ROUGH. IT'S REALLY HOT.

>> IT FEELS LIKE IT'S AUGUST. IT IS HOT AND IT IS WARM.

>> Suarez: AND THERE WAS NOT MUCH RELIEF UNDERGROUND, EITHER.

>> I WAS MANAGING OUT THERE, THEN I GOT HERE, THAT'S WHEN I STARTED SWEATING.

>> Suarez: NEW YORK MAYOR MICHAEL BLOOMBERG VISITED ONE OF THE CITY'S 400 COOLING CENTERS AND URGED CAUTION.

>> IT'S A GOOD TIME TO STOP IN ON A NEIGHBOR, PARTICULARLY SOMEONE WHO IS OLD AND LIVING BY THEMSELVES, AND SAY, "I JUST WANT TO MAKE SURE YOU'RE COOL ENOUGH. AND YOU CAN GO TO A MALL, YOU CAN GO TO THE MOVIES, YOU CAN GO TO A COOLING CENTER."

>> Suarez: OTHERS TOOK TIME OFF AND SWARMED BEACHES IN NEW JERSEY. READINGS WERE ON TRACK TO BREAK 100 IN PHILADELPHIA THIS WEEK, WHERE STICKY AIR SMEARED THE SKIES WITH HAZE. SOME SCHOOLS IN THE NORTHEAST PLANNED TO CLOSE EARLY FOR A SECOND DAY SO STUDENTS WOULDN'T HAVE TO SUFFER.

>> IT'S REALLY, REALLY HOT. IT'S, LIKE, 100 DEGREES AND THE CLASSROOMS ARE BAKING.

>> Suarez: FOR OTHERS, LIKE THESE CONSTRUCTION WORKERS IN VIRGINIA, THERE WAS NO REPRIEVE FROM THE HEAT.

>> TODAY, WE GOT A LITTLE BREEZE, BUT IT'S STILL HOT. IT'S REAL HOT.

>> Suarez: STILL, FORECASTERS SAID THERE WAS SOME RELIEF WAS ON THE WAY. A COLD FRONT WAS EXPECTED TO MOVE INTO THE MIDWEST TONIGHT, AND THEN HEAD EAST.

>> WE TAKE A CLOSER LOOK NOW AT THE HEAT WAVE AND WHAT RELIEF IS IN STORE FOR THE COUNTRY AND THE FIRE-RAVAGED SOUTHWEST WITH EVAN MYERS OF ACCUWEATHER. EVAN, WELCOME. WHAT'S GOING ON OVERHEAD TO CREATE SUCH HIGH TEMPERATURES IN SUCH A BIG CHUNK OF THE COUNTRY?

>> WELL, RAY, THERE'S A COUPLE DIFFERENT REASONS WHAT'S GOING ON. NUMBER ONE, WE CAN JUST TELL IN THE SHORT TERM THERE'S JUST A MASSIVE AREA OF HIGH PRESSURE, A BIG RIDGE IN THE UPPER ATMOSPHERE THAT EXTENDS FROM THE EAST COAST ALL THE WAY BACK INTO THE SOUTHWESTERN STATES. AND IT'S JUST BEEN PUMPING HOT AND DRY AIR OUT OF MEXICO. SO WE KNOW THAT THAT'S THE REASON WHY THIS IS OCCURRING. SOMETHING ELSE IS GOING ON. WE CERTAINLY KNOW THAT SOMETHING GREATER IS HAPPENING. THERE IS A GREATER PERCENTAGE OF WARM YEARS THAT HAVE OCCURRED RECENTLY THAN WOULD BE THE NORMAL DISTRIBUTION. SO WHETHER THAT IS HUMAN INDUCED OR WHETHER IT'S PART OF A NATURAL CYCLE, I DON'T THINK IT REALLY MATTERS. I THINK WE NEED TO BE PRUDENT IN HOW WE MOVE FORWARD IN THE FUTURE AND REALLY THINK ABOUT THE THINGS WE DO THAT MIGHT AFFECT THE CLIMATEMENT BUT CERTAINLY THIS HOT WEATHER ACROSS THE SOUTHERN PART OF THE COUNTRY IS GOING TO STICK AROUND FOR A WHILE.

>> Suarez: IS IT EARLY IN THE YEAR, UNUSUALLY EARLY IN THE YEAR FOR PLACES, EVEN PLACES THAT EXPECT VERY HOT DAYS AND VERY HOT SUMMERS TO SEE TEMPERATURES LIKE THIS?

>> WELL, IT IS CERTAINLY WE'VE BEEN BREAKING RECORDS. TEMPERATURES IN THE MID 90s AND UPPER 90s FROM BOSTON TO NEW YORK TO PHILADELPHIA TO BALTIMORE AND WASHINGTON IS NOT EXTRAORDINARY THIS TIME OF YEAR. WE'VE GOTTEN CLOSE TO THE RECORDS AND WE'VE BROKEN RECORDS IN SOME CITIES LIKE PHILADELPHIA AND BALTIMORE. IN BALTIMORE TWO DAYS IN A ROW OF 99 DEGREE HEAT. IN WASHINGTON, D.C. 102 DEGREES TODAY. THAT TIED THE ALL-TIME RECORD FOR THIS DATE THAT WAS SET BACK WHEN ULYSSES S. GRANT WAS PRESIDENT BACK IN 1874. SO YOU HAVE TO GO BACK 137 YEARS TO SEE ANYTHING LIKE WHAT WE'VE SEEN THE LAST COUPLE OF DAYS IN THE EASTERN PART OF THE COUNTRY AND BACK INTO THE MIDWEST.

>> Suarez: IS THAT HOT WEATHER STILL GOING TO HANG ON IN PARTS OF THE EAST AND THE NORTHEAST?

>> WELL, LOOKS LIKE IT'S GOING TO HOLD ON FROM NEW YORK CITY ON SOUTHWARD TO THE PHILADELPHIA, BALTIMORE AREA INTO FRIDAY BUT IT IS GOING TO TURN SOMEWHAT COOLER IN THOSE AREAS OVER THE WEEKEND. BUT FROM THE CAROLINA DOWN TO ATLANTA AND BACK WEST THROUGH TEXAS AND EVEN INTO ARIZONA, IT CERTAINLY LOOKS LIKE THE HEAT IS GOING TO HOLD FOR THE FORESEEABLE FUTURE.

>> Suarez: THE OFFICIAL FIRST DAY OF SUMMER IS STILL A COUPLE OF WEEKS AWAY. BUT DOES IT LOOK LIKE IT'S GOING TO BE A TOUGH SUMMER FOR THE UNITED STATES?

>> WELL, REALLY ALL DEPENDS ON WHERE YOU ARE. ACROSS THE CAROLINAS, DOWN INTO THE SOUTHEAST AND ACROSS THE GULF COAST AND THEN BACK INTO THE SOUTHWESTERN STATES AND UP THROUGH THE INNER MOUNT TAKEN WEST IT LOOKS LIKE A HOT AND DRY SUMMER BUT IT LOOKS MOISTER AND COOLER ACROSS THE UPPER MIDWEST AND CENTRAL MISSISSIPPI VALLEY.

>> Suarez: THE SOUTHWEST WHERE THOSE WILDFIRES HAVE BEEN SO HARD TO CONTAIN HAS BEEN LABORING UNDER A DROUGHT FOR SOME TIME. IN THE NEAR TERM IS THERE ANY GOOD NEWS ON THE WAY IN THE FORM OF MOISTER AIR, CALMER WINDS, MAYBE EVEN A LITTLE RAIN?

>> WELL, THERE'S A COUPLE OF THINGS. FOR AT LEAST THROUGH THE WEEKEND IT LOOKS LIKE THE WINDS WILL BE CALMER AND THAT IS CERTAINLY GOOD NEWS. THE MONSOON SEASON WHICH IS THE SEASONAL RAINS THAT SET IN IN JULY AND AUGUST AND SOMETIMES AS EARLY AS THE EARLY PART OR MIDDLE PART OF JUNE, THE MOISTURE THAT COMES OUT OF THE GULF OF MEXICO UP THE RIO GRAND VALLEY INTO THE SOUTHWEST THERE IS NO SIGN THAT THAT IS GOING TO HAPPEN ANY TIME SOON. PHOENIX, ARIZONA, HAS ONLY HAD 1 INCH OF RAIN SO FAR THIS YEAR. THEY DON'T GET A LOT. NORMALLY THEY HAVE UP TO 3 INCHES BUT YOU CAN SEE HOW DRY IT IS AND THERE IS NO SIGN THAT IS GOING TO CHANGE ANY TIME SOON?

>> Suarez: AND HOW LONG HAS IT BEEN SINCE THEY'VE HAD A REGULAR YEAR OF RAIN? IS THERE A PERSISTING YEAR-TO-YEAR TO YEAR CYCLE THAT THE SOUTHWEST IS LABORING UNDER?

>> WELL, THE SOUTHWEST, THE DEEP SOUTHWEST TOWARDS THE MEXICAN BORDER, PLACES LIKE PHOENIX AND TUCSON HAVE BEEN LABORING UNDER VERY DRY CONDITIONS FOR A WHILE. IT'S KIND OF INTERESTING. IF YOU GET FURTHER NORTH INTO THE CENTRAL AND NORTHERN ROCKIES ACTUALLY THIS SPRING AND WINTER WERE VERY MOIST AND THEY HAVE SOME WORRIES ABOUT FLOODING AS IT STARTS TO HEAT UP BECAUSE THEY HAVE A TREMENDOUS SNOW PACK UP IN THAT AREA. JUST A LITTLE BIT FURTHER NORTH FROM ARIZONA.

>> Suarez: EVAN MYERS FROM ACCUWEATHER, THANKS FOR JOINING US.

>> SURE, RAY. GLAD TO BE HERE. PARTS OF DOWNTOWN DETROIT WERE HEAT WHERE BLACKOUTS. CITY HALL, COUNTY COURTHOUSE AND OTHER MAJOR SITES WERE IN THE DARK.

>> Woodruff: STILL TO COME ON THE NEWSHOUR: REFUGEES FLEEING THE CRACKDOWN IN SYRIA; CONFIRMATION HEARINGS FOR THE NEXT DEFENSE SECRETARY; SAVING THE RAINFOREST IN HONDURAS; AND THE DIVIDE AMONG OIL PRODUCING NATIONS. BUT FIRST, THE OTHER NEWS OF THE DAY. HERE'S HARI SREENIVASAN.

>> Sreenivasan: REPUBLICAN PRESIDENTIAL CONTENDER NEWT GINGRICH HAS LOST HIS ENTIRE SENIOR CAMPAIGN STAFF. THE CAMPAIGN MANAGER, OTHER TOP STAFFERS, AND KEY AIDES IN EARLY PRIMARY STATES ALL RESIGNED TODAY. ONE SAID THEY DOUBTED GINGRICH'S ABILITY TO WIN, AND HIS COMMITMENT. THE CANDIDATE ANSWERED WITH A POSTING ON HIS FACEBOOK PAGE THAT SAID: "I AM COMMITTED TO RUNNING THE SUBSTANTIVE, SOLUTIONS-ORIENTED CAMPAIGN I SET OUT TO RUN EARLIER THIS SPRING. THE CAMPAIGN BEGINS ANEW SUNDAY IN LOS ANGELES." THE FORMER HOUSE SPEAKER IS ONE OF SEVEN DECLARED CANDIDATES FOR THE REPUBLICAN NOMINATION. A CHICAGO BUSINESSMAN WAS CONVICTED ON CHARGES IN ONE TERROR PLOT AND ACQUITTED IN ANOTHER. HE WAS FOUND GUILTY IN A CONSPIRACY TO ATTACK A DANISH NEWSPAPER THAT PRINTED CARTOONS OF MOHAMMED PROPHET. AND WAS ACQUITTED IN THE DEADLY ATTACK IN MUM BUY IN 2008. CITIGROUP IS THE LATEST HIGH- PROFILE COMPANY TO FALL PREY TO A CYBER ATTACK. THE BANK REPORTED TODAY HACKERS ACCESSED CREDIT CARD INFORMATION FOR 200,000 ACCOUNTS IN NORTH AMERICA. THE INFORMATION INCLUDED NAMES, ACCOUNT NUMBERS AND CONTACT INFORMATION. CITIGROUP HAS MORE THAN 21 MILLION CREDIT CARD CUSTOMERS ACROSS NORTH AMERICA. LIBYA'S MAIN OPPOSITION GROUP WON PLEDGES TODAY OF MORE THAN $1 BILLION IN FINANCIAL ASSISTANCE. WESTERN AND ARAB NATIONS PROMISED THE FUNDS AT A CONFERENCE IN ABU DHABI. AUSTRALIAN FOREIGN MINISTER KEVIN RUDD SAID THEY ALSO FOCUSED ON WHAT LIES AHEAD FOR LIBYA ONCE THE FIGHTING ENDS.

>> THE ONGOING HUMANITARIAN CRISIS ON THE GROUND IS REAL. AND THEREFORE WE HAVE TWO CHALLENGES RIGHT NOW. TO KEEP PEOPLE ALIVE UNTIL THIS CRISIS CONCLUDES AND TO BE FULLY PREPARED FROM THE NEXT DAY WHICH IS HOW DO YOU PRODUCE SUFFICIENT SUPPORT AND STRUCTURE FOR AN INTERIM GOVERNMENT TO PERFORM ITS FUNCTIONS ONCE QADDAFI GOES. QADDAFI BY THE WAY, IF HE HAS ANY SENSE OF HIS OWN SELF-INTEREST WOULD GO NOW.

>> Sreenivasan: RUDD AND OTHERS SAID THERE'VE BEEN A NUMBER OF OVERTURES FROM PEOPLE CLOSE TO QADDAFI. HE SAID A TRANSITION IN LIBYA MAY COME SOONER THAN ANYONE THINKS. THE GOVERNOR OF ALABAMA TODAY SIGNED WHAT MAY BE THE NATION'S TOUGHEST LAW ON ILLEGAL IMMIGRATION. IT LETS POLICE ARREST ANYONE SUSPECTED OF BEING AN ILLEGAL IMMIGRANT, EVEN IF THEY'RE STOPPED FOR ANY OTHER REASON. IT ALSO REQUIRES THAT PUBLIC SCHOOLS CHECK THE IMMIGRATION STATUS OF STUDENTS, AND IT MAKES IT A CRIME TO KNOWINGLY GIVE AN ILLEGAL IMMIGRANT A RIDE. IN ADDITION, ALABAMA BUSINESSES WILL HAVE TO VERIFY THAT NEW EMPLOYEES ARE LEGAL. MICROSOFT WILL HAVE TO PAY $290 MILLION FOR INFRINGING ON ANOTHER COMPANY'S PATENT. THE U.S. SUPREME COURT UNANIMOUSLY UPHELD THAT JUDGMENT TODAY. THE SOFTWARE GIANT WAS ORDERED TO COMPENSATE A SMALL CANADIAN FIRM FOR USING SOME OF ITS TECHNOLOGY IN MICROSOFT WORD. THE CASE HAS BEEN WORKING ITS WAY THROUGH THE FEDERAL COURTS SINCE 2007. WALL STREET HAS BROKEN A WEEK- LONG SLUMP. STOCKS MOVED HIGHER TODAY ON NEWS THAT U.S. EXPORTS HIT A RECORD IN APRIL. THE MARKET SHRUGGED OFF NEWS THAT NEW CLAIMS FOR JOBLESS BENEFITS WERE ON THE HIGH SIDE AGAIN LAST WEEK. THE DOW JONES INDUSTRIAL AVERAGE GAINED 75 POINTS TO CLOSE AT 12,124. THE NASDAQ ROSE NINE POINTS TO CLOSE ABOVE 2,684. THOSE ARE SOME OF THE DAY'S MAJOR STORIES. NOW, BACK TO JEFF.

>> Brown: NOW, THE BIG CHALLENGES FACING THE MAN POISED TO BECOME HEAD OF THE DEFENSE DEPARTMENT. FOR LEON PANETTA, THE TRANSITION FROM RUNNING THE CIA TO PRESIDING OVER THE PENTAGON WOULD COME IN THE MIDST OF A WAR IN AFGHANISTAN, A NATO MISSION IN LIBYA, AND A LOOMING BATTLE OF A VERY DIFFERENT KIND-- OVER IMPENDING BUDGET CUTS. AT HIS CONFIRMATION HEARING TODAY, SENATORS SPLIT OVER HOW HE SHOULD HANDLE THE CHALLENGES, STARTING WITH THE MILITARY BUDGET. MICHIGAN DEMOCRAT CARL LEVIN CHAIRS THE ARMED SERVICES COMMITTEE.

>> THE NEXT SECRETARY OF DEFENSE WILL BE REQUIRED TO JUGGLE THE COMPETING DEMANDS ON OUR FORCES WHILE WASHINGTON STRUGGLES WITH AN EXTREMELY CHALLENGING FISCAL ENVIRONMENT. THE DEFENSE BUDGET WILL NOT AND SHOULD NOT BE EXEMPT FROM CUTS.

>> Brown: THOSE CUTS IN THE PRESIDENT'S BUDGET ADD UP TO $400 BILLION IN NATIONAL SECURITY SPENDING OVER THE NEXT DOZEN YEARS. BUT ARIZONA REPUBLICAN JOHN McCAIN WARNED AGAINST MAKING THE MILITARY BEAR MOST OF THAT BURDEN.

>> DEFENSE SPENDING IS NOT WHAT IS SINKING THIS COUNTRY INTO FISCAL CRISIS, AND IF THE CONGRESS AND THE PRESIDENT ACT ON THAT FLAWED ASSUMPTION, THEY WILL CREATE A SITUATION THAT IS TRULY UNAFFORDABLE-- THE DECLINE OF U.S. MILITARY POWER.

>> Brown: LAWMAKERS AGREED THAT PANETTA'S PAST ROLE AS BUDGET DIRECTOR BACK IN THE CLINTON ADMINISTRATION MAKES HIM WELL SUITED TO DEAL WITH TOUGH FISCAL DECISIONS. THOSE COULD INCLUDE NEW WEAPONS SYSTEMS LIKE THE JOINT STRIKE FIGHTER. PANETTA AGREED TODAY THAT SOME PROGRAMS MAY SIMPLY PROVE TOO COSTLY IN A TIME OF AUSTERITY.

>> IN THE BRIEFINGS THAT I HAVE HAD, IT'S OBVIOUS THAT THIS AN AREA THAT WE'VE GOT TO PAY A LOT OF ATTENTION TO. WE'VE SEEN THESE WEAPONS SYSTEMS GROW IN COST. IT TAKES AN EXTRAORDINARY AMOUNT OF TIME TO THE TIME ITS FINALLY DEVELOPED AND DEPLOYED. WE HAVE GOT TO IMPROVE THAT PROCESS.

>> Brown: AT THE SAME TIME, PANETTA WOULD INHERIT A MILITARY STRAINED BY TEN YEARS OF NEARLY CONTINUOUS COMBAT ACROSS SEVERAL THEATERS. SOME OF THE STRAIN MIGHT BE LESSENED BY A DRAW-DOWN OF TROOPS IN AFGHANISTAN EXPECTED TO BEGIN NEXT MONTH AND BE COMPLETED BY THE END OF 2014. WITH A DEBATE NOW UNDERWAY OVER POSSIBLY SPEEDING UP THAT DRAW- DOWN, OUTGOING DEFENSE SECRETARY ROBERT GATES-- SPEAKING AT A NATO MEETING IN BRUSSELS-- EMPHASIZED AGAIN TODAY THAT THE PULL-OUT WILL NOT BE ALLOWED TO JEOPARDIZE THE MISSION.

>> EVEN AS THE UNITED STATES BEGINS TO DRAW DOWN NEXT MONTH, I ASSURED MY FELLOW MINISTERS THERE WILL BE NO RUSH TO THE EXITS ON OUR PART, AND WE EXPECT THE SAME FROM OUR ALLIES.

>> Brown: BACK AT THE CONFIRMATION HEARING, SENATOR McCAIN TRIED TO GET PANETTA TO SPELL OUT HIS STANCE.

>> SO WOULD YOU AGREE WITH SECRETARY GATES' REPEATED STATEMENTS THAT WITHDRAWALS IN JULY SHOULD BE "MODEST"?

>> I AGREE THAT THEY SHOULD BE CONDITIONS-BASED. AND I'M GOING TO LEAVE IT UP TO SECRETARY GATES AND GENERAL PETRAEUS AND THE PRESIDENT TO DECIDE WHAT THAT NUMBER SHOULD BE.

>> WELL, IF YOU ARE THE SECRETARY OF DEFENSE WHEN THAT DECISION IS MADE, OBVIOUSLY, YOU WILL HAVE SIGNIFICANT INFLUENCE. YOU JUST CAME FROM A POSITION WHERE YOU HAVE A VERY GOOD ASSESSMENT OF THE MILITARY SITUATION. I THINK IT'S NOT INAPPROPRIATE FOR YOU TO ANSWER WHEN I ASK IF YOU AGREE WITH SECRETARY GATES' ASSESSMENT THAT THE WITHDRAWAL SHOULD BE MODEST.

>> SENATOR, IF I'M CONFIRMED, I'LL HAVE TO, OBVIOUSLY, ARRIVE AT A DECISION MYSELF THAT I'LL HAVE TO ULTIMATELY PRESENT TO THE PRESIDENT. BUT I'M NOT IN THAT POSITION NOW. AND THAT DECISION REALLY DOES REST WITH GENERAL PETRAEUS AND SECRETARY GATES AND THE PRESIDENT.

>> Brown: ROBERT GATES LEAVES THE PENTAGON FOR GOOD LATER THIS MONTH. LEON PANETTA IS EXPECTED TO HAVE AN EASY ROAD TO CONFIRMATION IN THE NEXT FEW WEEKS. TODAY, HE PROMISED THAT, IF CONFIRMED, HE WOULD ENGAGE IN STRONG FISCAL DISCIPLINE WHILE MAINTAINING A STRONG DEFENSE. BUT ALSO STRESSED ONE OF HIS MOST IMPORTANT JOBS WOULD BE AS AN ADVOCATE FOR THE TROOPS AND THEIR FAMILIES. LAST NIGHT, WE DEBATED THE STATE OF PLAY ON THE U.S. ENGAGEMENT IN AFGHANISTAN. TONIGHT, WE FOCUS ON THE OTHER MAJOR CHALLENGE FOR THE NEW DEFENSE SECRETARY-- THE MILITARY BUDGET, WHICH IS $730 BILLION FOR THIS YEAR, MORE THAN DOUBLE WHAT IT WAS IN 2001. FOR THAT WE GET TWO VIEWS: GORDON ADAMS SUPERVISED NATIONAL SECURITY BUDGETS AT THE OFFICE OF MANAGEMENT AND BUDGET IN THE CLINTON ADMINISTRATION. HE NOW TEACHES AT AMERICAN UNIVERSITY AND IS AUTHOR OF THE BOOK, "BUYING NATIONAL SECURITY." MACKENZIE EAGLEN WAS A CONGRESSIONAL STAFFER ON DEFENSE ISSUES AND SERVED AT THE PENTAGON. SHE'S NOW A RESEARCH FELLOW AT THE HERITAGE FOUNDATION.

>> HE WELCOME TO BOTH OF YOU. GORDON ADAMS I WILL START WITH YOU. FRAME THE DEBATE THAT LEONE PANETTA IS STEPPING INTO. IS EVERYONE AGREED THAT SOME STEPS ARE NECESSARY SO IT'S HOW MUCH AND HOW TO DO IT.

>> I THINK ALMOST EVERYBODY NOW BELIEVES WE ARE AT THE EDGE OF A BUILDDOWN IN DEFENSE. AND THE QUESTION IS GOING TO BE HOW FAST DO YOU GO, WHAT THINGS DO YOU CHOOSE TO MAKE A PRIORITY. WHAT PERIOD OF TIME DO YOU COVER WITH IT. I DON'T THINK ANYBODY AT THIS POINT IS REALLY ARGUING WE EITHER CAN OR OUGHT TO INCREASE THE DEFENSE BUDGET. AND FRANKLY WITH THE END OF THE WARS AND WITH ATTENTION ON DEFINITE FIT-- DEFICITS AND THINGS LIKE THAT IN THE GENERAL PUBLIC, LOOKING AT DEFENSE AS PART OF THE EQUATION WE HAVE TO DEAL WITH TO SOLVE THE DEBT AND DEFICIT PROBLEM IS CLEARLY WHERE MUCH OF THE CONGRESS IS AT, WHERE THE ADMINISTRATION IS AT, AND WHERE THE AMERICAN PEOPLE ARE.

>> Brown: CAN WE GET AN AGREEMENT ON THIS PART? AND HOW WOULD YOU FRAME WHERE THINGS ARE AT?

>> WELL, I WOULD SAY THOUGH THAT WE'RE ALMOST THERE. PRESIDENT OBAMA WHEN HE LAID OUT HIS DEFICIT REDUCTION GOALS IN HIS SPEECH IN APRIL SAID 400 BILLION FROM SECURITY SPENDING OF WHICH WE EXPECT THE MILITARY TO BEAR THE MAJORITY OF THAT. BUT HE KNEW THAT HE HAD TO HAVE CHANGES IN FOREIGN POLICY TO JUSTIFY ANY FUNDAMENTAL CUTS, BEYOND SORT OF THE TINK ERG WITH THE DEFENSE BUDGET THAT WE HAVE SEEN UNDER SECRETARY GATES HERE AND THERE. BECAUSE FUNDAMENTALLY THIS PRESIDENT HAS SURGED IN AFGHANISTAN, SENT TROOPS TO LIBYA, HELPED JAPAN AND HAITI FOR HUMANITARIAN RELIEF MISSION. SO WHAT WE ARE ACTUALLY ASKING THE MILITARY TO DO HAS GROWN EVERY SINGLE YEAR SINCE 9/11. AND SO YOU CANNOT PRECIPITOUSLY START CUTTING WITHOUT JUSTIFYING OR CHANGING SOMETHING IN OUR FOREIGN POLICY, EVEN PRESIDENT OBAMA ACKNOWLEDGES THAT.

>> Brown: AND JUST AGAIN HELP PEOPLE UNDERSTAND THIS BUDGET. ARE THOSE THINGS YOU JUST NAMED, IS THAT THE REASON WHY THE BUDGET HAS GONE UP? WHY HAS THE BUDGET GONE UP SO MUCH IN TEN YEARS?

>> WELL, PARTLY BECAUSE WE TOOK A BUDGET HOLIDAY IN THE 1990s IN TERMS OF BUYING EQUIPMENT THAT THE TROOPS NEEDED. FOR EXAMPLE, WE SAW THIS MANIFESTED IN IRAQ WHEN SERVICE MEMBERS FAMILY'S WERE SENDING BODY ARMOUR, THE VEHICLES WERE UPARMOURED TO COMBAT IMPROVISED EXPLOSIVE DEVICES, FOR EXAMPLE. SO WE HAVE SEEN THE BUDGET GROW SIGNIFICANTLY SINCE 9/11 BUT LARGELY ON WHAT WE CALL CONSUMABLES, MOSTLY RELATED TO CURRENT OPERATIONS AS OPPOSED TO INVESTING IN THE FUTURE.

>> Brown: WOULD YOU AGREE WITH THAT? BECAUSE THIS IS IMPORTANT IN TERMS OF THINKING ABOUT WHERE WE GO IN THE FUTURE.

>> IT'S VERY IMPORTANT. IN FACT I DON'T FULLY AGREE WITH THAT MACKENZIE IS RIGHT WE TOOK A PROCUREMENT HOLIDAY IN THE 1990s IT WAS A RIGHT TIME TO TAKE IT BECAUSE WE HAD GOOD EQUIPMENT, AIR TANKS AND SHIPS BOUGHT BACK DURING THE REAGAN ADMINISTRATION IN THE '80s. THE REASON THE DEFENSE BUDGET HAS DOUBLED AND IS HIGHER IN CONSTANT DOLLARS WHICH MEANS SETTING INFLATION ASIDE THAN AT ANY POINT IN OUR HISTORY SINCE THE END OF THE SECOND WORLD WAR, THE REAL REASON IS WE WENT TO WAR. WE FUND TLAD WAR THROUGH EXTRA BUDGET APPROPRIATIONS CALLED SUPPLEMENTALS TO THE DEFENSE BUDGET. BUT BECAUSE WE WERE AT WAR, CONGRESS WAS QUITE UNPREPARED TO TAKE A HARD LOOK AT THE BASIC DEFENSE BUDGET ASIDE FROM WHAT WE WERE PAYING FOR WAR. AND SO THOSE COSTS ALSO CENT UP AT THE SAME TIME AS WE WERE SPENDING MONEY ON THE WAR. SO IN FACT WE'VE MORE THAN DOUBLED THE DEFENSE BUDGET OVER THE LAST TEN YEARS. WE'VE DONE IT WITHOUT SERIOUS SCRUTINY SO AT THIS POINT IT IS TIME FOR SCRUTINY AND MUCH OF THAT CAN HAPPEN WITHOUT JEOPARDIZING OUR NATIONAL SECURITY.

>> SO WHEN THE PRESIDENT TALKS ABOUT THE 400 BILLION OVER 12 YEARS, IS THAT REASONABLE? OR IS THAT NOT EVEN ENOUGH?

>> NOT ONLY IS THAT REASONABLE, BUT I WOULD SUGGEST THAT IT MAY BE THE BEST THAT THE PENTAGON IS GOING TO DO. THE PRESIDENT SAID $400 BILLION OVER 12 YEARS. ALL THESE COMMISSIONS THAT HAVE BEEN STUDYING THE DEBTS AND DEFICIT AND MAKING PROPOSALS ABOUT WHAT TO DO AMONG OTHER THINGS ABOUT DEFENSE HAVE BEEN SAYING SOMEWHERE BETWEEN $500 BILLION AND A TRILLION DOLLARS OVER TEN YEARS, WHICH IS SHORTER THAN THE PRESIDENT'S 12 YEARS. NOW YOU CAN DO THAT. IN FACT YOU CAN PROBABLY DO WHAT THE PRESIDENT SAID AND STILL LET THE DEFENSE BUDGET GROW WITH INFLATION. BUT YOU COULD GET THOSE DEEPER CUTS AS WELL AS WELL WITHOUT JEOPARDIZING AMERICAN NATIONAL SECURITY AND GIVEN THE DEBT DEFICIT CONCERNS, GIVEN THE END OF THE WARS, I THINK WE'RE LIKELY ON A DEEPER TRAJECTORY OF CUTTING THAN THE PRESIDENT HAS SAID SO FAR?

>> Brown: DO YOU THINK THAT IS DOABLE AND A GOOD THING TO DO, TO GO MORE THAN $400 BILLION?

>> THERE ARE ABSOLUTELY SAVINGS TO BE FOUND INSIDE THE DEFENSE BUDGET. STARTING WITH, TROOP DRAW DOWNS IN IRAQ AND AFGHANISTAN. THAT IS MONEY THAT CAN BE REINVESTED ELSEWHERE IN THE FEDERAL BUDGET OR APPLIED TOWARDS DEBT AND DEFICIT REDUCTION. INSIDE THE DEFENSE BUDGET, YES. THERE ARE AREAS RIPE FOR EXAMINATION AND SCRUTINY. AND I THINK THAT'S THE ONLY THING YOU CAN DO WITH TAXPAYER MONEY IS THAT EVERY PROGRAM SHOULD STAND ON ITS MERITS. THE CHALLENGE HERE IS THAT SECRETARY GATES HAS MADE WHAT HE ACKNOWLEDGES WERE THE EASY CUTS BECAUSE HE SAID THE ONLY ONES LEFT ARE HARD. THE EASY CUTS TEND TO BE THINGS LIKE WEAPONS SYSTEMS AND EQUIPMENT FOR OUR FORCES. BUT THAT IS ONLY ONE SEVENTH OF THE DEFENSE BUDGET. AND USUALLY WHILE YOU KILL THAT PROGRAM, YOU DON'T ELIMINATE THE NEED FOR SOMETHING TO BE BOUGHT IN ITS PLACE. I WOULD ARGUE THE REAL CHALLENGES HERE ARE STRUCTURAL AND THEY'RE HARDER TO GET AT. THEY'RE IN THINGS LIKE OVERHEAD, THEY'RE IN PERSONNEL, THEY'RE IN COMPENSATION, THEY'RE IN AGENCY AND BUSINESS PROCESSES, LOGISTICS. A LOT OF THE-- YOU CAN'T JUST GO INTO A LINE ITEM IN THE BUDGET AN FIND IT. YOU ACTUALLY HAVE TO MAKE CHANGES FUNDAMENTALLY. AND THESE ARE THE THINGS THAT EVEN WILL ON PANETTA MAY NOT HAVE TIME TO DO WITH JUST A YEAR AND A HALF IN OFFICE.

>> Brown: DOING THESE THINGS WHILE MAINTAINING NATIONAL SECURITY.

>> I THINK IT'S IMPORTANT TO KEEP IN MIND IN ALL OF THIS ATMOSPHERE WE HAVE DOUBLED THE DEFENSE BUDGET AND WE HAVE THE ONLY MILITARY IN THE ENTIRE GLOBE THAT IS CAPABLE OF GLOBAL OPERATIONS, GLOBAL DEPLOYMENTS, GLOBAL FLYING, GLOBAL SAILING, GLOBAL COMMUNICATIONS, GLOBAL INFRASTRUCTURE, WE'RE THE ONLY MILITARY THAT CAN DO THAT AND FRANKLY EVEN WITH A MILLION DOLLARS OVER TEN YEARS WHICH IS ONLY 15% OF THE CURRENTLY PROJECTED BUDGETS, WE WILL STILL AT THE END OF THAT PROCESS HAVE ALL THOSE SAME GLOBAL ADVANTAGES. SO WE'RE STARTING FROM A VERY STRONG POINT. I THINK MACKENZIE IS RIGHT THERE ARE A LOT OF THINGS INTERNALLY YOU CAN DO IN THE BUDGET. WE'VE GOT NEARLY A THIRD OF THE FORCE THAT'S NEVER DEPLOYED BECAUSE THEY ARE OPERATING THE BACK OFFICE, THE INFRASTRUCTURE IN THE DEFENSE DEPARTMENT. YOU CAN DO AN AWFUL LOT TO CLEAN THAT UP AND MAKE SAVINGS.

>> Brown: BUT DO YOU AGREE THAT WE CAN MAINTAIN ALL THAT WE WANT TO DO, ALL THAT WE SHOULD BE DOING, ALL THAT POLITICALLY THERE WILL BE CALLS TO DO WHILE MAKING THE VERY LARGE CUT. HE'S TALKING ABOUT-- YOU'RE TALKING ABOUT MUCH LARGER CUTS THAN THE PRESIDENT.

>> RIGHT THAT MAY BE THE AREA WHERE WE DISAGREE THE MOST. I WOULD BE WORRIED THAT YOU WOULD CUT PAST THE FAT AND MUSCLE-- AND INTO MUSCLE AND BONE AT THAT TYPE WITH THOSE TYPES OF CUTS. NOW IF IT IS DONE RATIONALLY ON THE OVERHEAD SIDE. BUT I'M CONCERNED THATS THOSE CORE CAPABILITIES, WHAT'S BASICALLY MADE US A SUPERPOWER AS THE UNITED STATES A LOT OF THE INVESTMENT THAT WAS MADE IN THE 80s, '90s IN TECHNOLOGY AND EVEN THIS DECADE. THE THINGS THAT GIVE OUR MILITARY ITS GLOBAL STRENGTH AND REACH, THOSE ARE BIRTH RIGHTS. THEY HAVE TO CONTINUOUSLY BE REINVESTED AND YOU HAVE TO CONTINUOUSLY INNOVATE AND COME UP WITH NEW TECHNOLOGIES AND DEVELOPMENTS, ALL OF THESE THINGS FOR THE FUTURE, WE STILL HAVE TO DO THAT TODAY. AND SO I WOULD BE WORRIED THAT WE WOULD OVERFOCUS ON WHAT I SAID WAS JUST ONE SEVENTH OF THE BUDGET WHICH IS BASICALLY THE EQUIPMENT WITHOUT LOOKING AT THE REST OF THE AREAS IN THE BUDGET WHICH AGAIN, WHERE WE DO AGREE.

>> AND JUST BRIEFLY BECAUSE YOU BOTH WATCHED THE POLITICAL PROCESS, ALL OF THESE THINGS ARE EXTREMELY POLITICALLY CHARGED. WE SEE IT EVERY TIME.

>> THIS IS ENORMOUSLY DIFFICULT TO DO. THE SERVICES DON'T LIKE TO GIVE THINGS UP. THE INDUSTRY DOESN'T LIKE TO GIVE THINGS UP. MEMBS OF CONGRESS HAVE GOT THINGS BEING MADE IN THEIR DISTRICT THAT THEY DON'T LIKE TO GIVE UP. BOMBER SHIPS, WHATEVER THEY ARE. BASES WHERE PEOPLE OPERATE. IT'S REALLY HARD TO DO. IF THERE IS ANYBODY WHO CAN PULL THIS OFF, PANETTA IS A VERY GOOD CHOICE BECAUSE HE UNDERSTANDS BUDGETS.

>> YOU WORKED WITH HIM.

>> I WORKED WITH HIM FOR THREE YEARS AND I FOE HIM VERY WELL. HE UNDERSTANDS BUDGETS. HE UNDERSTANDS SECURITY, ESPECIALLY AFTER HIS STINT AT THE CIA. AND HE UNDERSTANDS THE CONGRESSES. HE HIMSELF SAID TODAY HE'S A CREATURE OF CONGRESS. THEY LOVE HIM UP THERE. HE'S VERY EFFECTIVE UP THERE.

>> BUT BRIEFLY HE WILL RUN OPPOSITION IN CONGRESS.

>> YES, BUT WHAT WE'VE SEEN UNDER SECRETARY GATES IS THAT YOU CAN CUT THE DEFENSE BUDGET AND GET BY HIM, BASICALLY FROM CAPITOL HILL. THE SECRETARY STARTED HIS OWN REFORM EFFORTS WITH A GOAL TO SAVE $100 BILLION. THE WHITE HOUSE THIS YEAR ASKS FOR $78 BILLION OVER A FIVE YEAR PERIOD AND HE WENT ALONG WITH THAT. I DON'T KNOW ABOUT HOW HE FEELS ABOUT THE 400 BILLION SINCE HE IS LEAVING. BUT YOU CAN ACTUALLY GET THE HILL TO GO ALONG WITH IT WHEN THERE ARE SMART CUTS.

>> OKAY, ALL RIGHT, MACKENZIE, GORDON, THANK YOU VERY MUCH.

>> THANK YOU.

>> Woodruff: NEXT TONIGHT, SYRIA AND THE THREAT OF AN INTENSIFIED CRACKDOWN ON ANTI-GOVERNMENT DEMONSTRATORS. A WARNING TO VIEWERS-- THIS STORY CONTAINS DISTURBING IMAGES. THE STREETS OF JISR AL-SHUGHOUR IN NORTHERN SYRIA ARE DESERTED. ITS REMAINING RESIDENTS ARE BRACED FOR AN IMMINENT ASSAULT BY THE SYRIAN MILITARY. PRESIDENT BASHAR AL-ASSAD'S GOVERNMENT ALLEGES 120 OF ITS SECURITY FORCES WERE KILLED THIS WEEK IN THE REBELLIOUS TOWN, AND AIRED AMATEUR VIDEO ON STATE TELEVISION PURPORTING TO SHOW ITS DEAD TROOPS. NOW, ELITE UNITS BELIEVED TO BE COMMANDED BY ASSAD'S BROTHER APPEAR POISED TO EXACT VENGEANCE. THIS AMATEUR VIDEO, SURREPTITIOUSLY SHOT FROM A FLEEING MOTORIST, APPEARED TO SHOW CONVOYS OF MILITARY VEHICLES MASSED OUTSIDE THE TOWN YESTERDAY. THE BBC'S OWEN BENNET JONES IS ON THE TURKISH SIDE OF THE BORDER WITH SYRIA, AND SAYS THERE ARE REPORTS THAT THOUSANDS OF YOUNG MEN REMAIN IN THE TOWN.

>> Reporter: I THINK THE WOMEN AND CHILDREN HAVE BASICALLY EITHER GONE TO OTHER LOCATIONS, EITHER IN SYRIA OR COME HERE. AND THE PEOPLE WHO REMAIN ARE PROBABLY THE ONES WHO WANT TO FIGHT-- YOU KNOW, THAT ARE PREPARED TO FIGHT IT OUT.

>> Woodruff: ONLY ONE ROUTE OUT IS OPEN, AND TOWNSFOLK ARE TAKING IT, FLEEING IN DROVES. AT LEAST 2,400 SYRIANS, AND MORE BY THE HOUR, HAVE CROSSED INTO SOUTHERN TURKEY, PASSING THROUGH LUSH GROVES AND INTO TEMPORARY ENCAMPMENTS.

>> Reporter: THERE'S A CAMP-- I WAS JUST THERE THIS AFTERNOON. THERE ARE MANY, MANY TENTS ORGANIZED BY THE RED CRESCENT IN COOPERATION WITH THE AUTHORITIES, AND THEY JUST TRIED TO BUILD AN EXTENSION TO THAT BECAUSE OF THE NUMBERS COMING IN. AND I'M TOLD THEY'RE LOOKING FOR A NEW SITE BECAUSE THEY REALIZE THAT MORE ARE COMING.

>> Woodruff: SOME OF THE NEW REFUGEES HAVE SHARED HARROWING STORIES IN INTERVIEWS POSTED ONLINE

>> ( translated ): THE FORCES ATTACKED US, RUINED OUR HOMES, THEY POISONED OUR WATER. I HAVE 12 KIDS-- NO WATER, HUNGER, THIRST.

>> Woodruff: TURKISH PRIME MINISTER ERDOGAN SAID TODAY HIS NATION WOULD ACCEPT ALL WHO SEEK SAFETY THERE. BUT THE TURKS ARE LOATHE TO CRITICIZE THEIR SOUTHERN NEIGHBOR DIRECTLY.

>> Reporter: THE TURKS ARE IN AN AWKWARD POSITION. THEY DON'T WANT TO EMBARRASS SYRIA TOO MUCH, AND THEY DO OBVIOUSLY HAVE AN IMPORTANT BILATERAL RELATIONSHIP WITH SYRIA, SO THEY ARE TENDING TO PLAY DOWN WHAT IS HAPPENING. AT THE SAME TIME, THEY ARE LETTING PEOPLE IN AND THEY ARE LOOKING OUT FOR THEM

>> Woodruff: THE THREE-MONTH SYRIAN UPRISING SHOWS NO SIGNS OF ABATING; RATHER, IT'S BEEN GALVANIZED AGAIN BY ANOTHER GRUESOME VIDEO OF A DEAD CHILD, ALLEGEDLY TORTURED AND MURDERED BY SECURITY FORCES. 15-YEAR-OLD TAMER AL-SHAREI DISAPPEARED FROM THE SOUTHERN CITY OF DARAA IN APRIL, ON THE SAME DAY, AND IN THE SAME PLACE, AS 13-YEAR-OLD HAMZA AL-KHATIB. VIDEO OF HIS BRUTALIZED CORPSE WAS RELEASED LAST WEEK. THE GROWING TERROR AND BLOODSHED HAVE PROMPTED NEW FEARS THAT THE EFFECTS WILL REACH BEYOND SYRIA'S BORDERS. SECRETARY OF STATE HILLARY CLINTON SPOKE TODAY IN ABU DHABI.

>> SADLY, UNDER PRESIDENT ASSAD, IT IS BECOMING A SOURCE OF INSTABILITY IN REGION. I DON'T THINK ANYONE LOOKING AT THE SITUATION CAN CONCLUDE THAT THIS WILL END WELL UNLESS THERE IS A CHANGE IN THE BEHAVIOR OF THE GOVERNMENT.

>> Woodruff: THE SYRIAN UPRISING AND THE REGIME'S BRUTAL RESPONSE ALSO TOPS THE AGENDA AT THE UNITED NATIONS. BRITAIN AND FRANCE SOUGHT SUPPORT FOR A SECURITY COUNCIL RESOLUTION CONDEMNING THE ASSAD GOVERNMENT. BRITISH PRIME MINISTER DAVID CAMERON OUTLINED THE STAKES YESTERDAY IN A SPEECH BEFORE THE HOUSE OF COMMONS.

>> THE VIOLENCE BEING METED OUT TO PEACEFUL PROTESTERS AND DEMONSTRATORS IS COMPLETELY UNACCEPTABLE. OF COURSE, WE MUST NOT STAND SILENT IN THE FACE OF THESE OUTRAGES, AND WE WON'T. IF ANYONE VOTES AGAINST THAT RESOLUTION OR TRIES TO VETO IT, THAT SHOULD BE ON THEIR CONSCIENCE.

>> Woodruff: BUT HISTORIC ALLIANCES WITH SYRIA LED RUSSIA, CHIEFLY, TO OPPOSE THE RESOLUTION. GIVEN MOSCOW'S VETO POWER IN THE COUNCIL, THAT COULD DOOM THE MEASURE BEFORE IT CAN BE BROUGHT TO A VOTE.

>> Brown: WE TURN NOW TO A STORY ABOUT CHANGING AGE-OLD FARMING PRACTICES IN THE TROPICS. IT'S PART OF "THE ECONOMIST FILM PROJECT," A NEWSHOUR COLLABORATION WITH "THE ECONOMIST" MAGAZINE. TOGETHER, WE SHOWCASE INDEPENDENTLY-PRODUCED DOCUMENTARIES THAT TAKE US PLACES WE DON'T ORDINARILY GO. HERE'S AN EXCERPT FROM "UP IN SMOKE" BY FILMMAKER ADAM WAKELING. HE FOLLOWED ECOLOGIST MICHAEL HANDS AS HE INTRODUCED HONDURAN FARMERS TO THE INGA TREE, HIS SOLUTION TO THE PROBLEMS CAUSED BY SO-CALLED SLASH AND BURN AGRICULTURE.

>> ( translated ): LETS START THE FIRE THERE.

>> OKAY, THIS IS WHY WE BURN. THE WEEDS AND TRUNKS ARE THICK. WE CAN'T PLANT AMONGST ALL THAT, SO WE BURN IT ALL. I KNOW THIS DESTROYS THE SOILS, THE FERTILITY DISAPPEARS, I KNOW THIS. BUT THERE IS NO OTHER WAY TO EAT. DO YOU UNDERSTAND?

>> Reporter: YOU ARE LOOKING AT A SLOWLY ENACTED CATASTROPHE, ONE BILLION TONS OF CARBON STRAIGHT UP INTO THE ATMOSPHERE ANNUALLY.

>> ( translated ): FIRE IT NOW.

>> Reporter: IN HONDURAS, TALKING TO SLASH AND BURN FARMERS BOTH DOWN IN THE VALLEY AND ON THE MOUNTAIN SLOPES, I FOUND THINGS WEREN'T VERY SIMPLE, BECAUSE WHAT THEY WANT IS ACCESS TO FRESH FOREST EVERY YEAR-- FOR A FRESH BURN TO GUARANTEE A FRESH CROP OF MAIZE, AND THEN TO MOVE ON THE FOLLOWING YEAR. THE RAINS WASH AWAY THE SOILS,

>> ( translated ): SO WE JUST CLEAR MORE FURTHER UP. DO YOU SEE? THERE'S NO OTHER OPTION FOR US. SO WE BURN TWO HECTARES THIS YEAR, THEN ANOTHER TWO THE NEXT FOR MAIZE OR FOR BEANS. WE PLANT WHEREVER WE CAN.

>> Reporter: YOU HAVE TO LEARN FROM WHAT THE FOREST IS DOING. IT IS THE MOST SUSTAINABLE, MOST PRODUCTIVE ECOSYSTEM ON THE PLANET. YOU HAVE GOT TO LISTEN TO IT.

>> WE'VE CRACKED A PROBLEM. WE'VE BLOODY CRACKED IT.

>> Reporter: YOU ARE SEEING A CROPPING SYSTEM THAT TAKES PLACE BETWEEN ROWS OF TREES. THE SYSTEM IS CALLED "ALLEY CROPPING," BECAUSE THE ROWS LOOK LIKE ALLEYWAYS, ROWS OF TREES PLANTED CLOSE TOGETHER IN WHAT WAS A GRASS-DOMINATED SITE. AND THE TREES HAVE GROWN AND HAVE NOW COMPLETELY SHADED OUT ALL OF THE GRASS. AT THE APPROPRIATE TIME, THEY WILL BE PRUNED DOWN TO ABOUT THE HEIGHT OF ONE'S CHEST, AND THE MULCH, THE GREEN MATERIAL FROM THE LEAVES WILL BE PLACED ON THE GROUND AS A PHYSICAL PROTECTION AND AS SLOWLY DECOMPOSING GREEN MANURE. ONCE THE LIGHT HAS BEEN LET IN AND THE GROUND HAS BEEN COVERED WITH MULCH, THE CROP CAN BE SOWN. IT HAS GOT ENOUGH STRENGTH TO COME UP FROM UNDERNEATH THE COVER OF MULCH, WHICH WILL LARGELY BE SUPPRESSING ALL THE REGROWTH OF THE WEEDS. DURING THE COURSE OF THE GROWTH OF THE CROP, THE TREES WILL REGROW. THERE WILL BE A LITTLE BIT OF LIGHT PRUNING OF THE REGROWTH TO CONTROL THE SHADE. AT THE POINT OF CROPPING, THE TREES ARE REGROWING. THEY'LL COVER THE CANOPY AND THEY WILL BE AVAILABLE FOR PRUNING AND CROPPING THE FOLLOWING YEAR. WHAT INGA APPEARS PARTICULARLY CAPABLE OF DOING IS TO AT LEAST, RETRIEVE, RETAIN AND RECYCLE THE KEY NUTRIENTS. IT HAS TO BE DEMONSTRATED-- YOU CANNOT PREACH IT, YOU CAN'T DESCRIBE IT. PEOPLE HAVE TO BE ABLE TO GET THEIR HANDS ON IT, SEE IT. SECONDLY, YOU HAVE TO TEST A SYSTEM THAT HAS BEEN DEVELOPED BY AN ACADEMIC TO SEE IF IT HAS ANY MEANING AT ALL FOR REAL PEOPLE.

>> ( translated ): WHEN THE FOREST DISAPPEARS, THE TEMPERATURE RISES AND THE PLANTS SUFFER MORE. THE MORE WE WEED AND BURN THE SOILS, THE WORSE THINGS GET.

>> ( translated ): ONE ADVANTAGE OF THIS SYSTEM IS THAT YOU CAN GROW ORGANIC CROPS, COMPLETELY HEALTHY FOOD.

>> WHAT DO YOU THINK SO FAR?

>> ( translated ): SERIOUSLY SURPRISING.

>> REALLY? WHAT DO YOU MEAN?

>> THE INGA.

>> THE ROOTS HOLD THE SOIL, IT DOESN'T WASH AWAY. YOU HAVE SEEN HOW STEEP OUR LAND IS.

>> THE TASK WE HAVE, WHICH IS CAPTURING HEARTS AND MINDS, WHICH IS CRUCIAL. IT'S FUNDAMENTAL. WHAT'S GOING ON IN ALADINO'S MIND? ITS GOING TO TAKE SOME TIME TO CHANGE THAT.

>> ( translated ): WERE TRYING TO KEEP PEOPLE ON ONE PLOT OF LAND AND NOT KEEP MOVING ON. FARMER TO FARMER, IT'S EASIER TO EXPLAIN. THAT'S HOW THE WORD SPREADS. ALL THOSE MOUNTAINS USED TO GROW ONIONS AND MAIZE, BANANAS, EVEN RICE. BUT WHEN THE SOILS FAILED, PEOPLE ABANDONED THEM AND MOVED THERE INTO FRESH FOREST. IF WE HAD HAD THIS SYSTEM, THEN WE WOULDN'T LACK WATER OR FOREST NOW.

>> Reporter: THIS IS GOING TO BE DONE FAMILY BY FAMILY, PEOPLE LIKE ALADINO, ONE AT A TIME.

>> Woodruff: WE HAVE MORE ON THE MAKING OF "UP IN SMOKE" ON OUR WEB SITE. OUR NEXT INSTALLMENT OF THE ECONOMIST FILM PROJECT WILL FEATURE "SKATE-ISTAN," A LOOK AT YOUNG SKATEBOARDERS IN WAR-TORN AFGHANISTAN.

>> Brown: WE'LL BE BACK SHORTLY WITH A LOOK AT DISSENT WITHIN THE RANKS OF THE OIL PRODUCING NATIONS AND WHAT THAT MEANS FOR GAS PRICES IN THE U.S. BUT FIRST, THIS IS PLEDGE WEEK ON PBS. THIS BREAK ALLOWS YOUR PUBLIC TELEVISION STATION TO ASK FOR YOUR SUPPORT, AND THAT SUPPORT HELPS KEEP PROGRAMS LIKE OURS ON THE AIR.

>> Woodruff: FOR THOSE STATIONS NOT TAKING A PLEDGE BREAK, A SECOND LOOK AT A STORY ABOUT A BATTLE TO PROTECT THE OCEAN AND HOW THAT'S PLAYING OUT IN CALIFORNIA. IT'S REPORTED BY NEWSHOUR CORRESPONDENT SPENCER MICHELS, AND IS PART OF A JOINT PROJECT WITH KQED'S SCIENCE PROGRAM "QUEST." JUST BEFORE DOESING THIS TIME OF YEAR THE FISHING BOATS RETURN TO SAN FRANCISCO FROM THE PAS CIVIC. THEIR CARGO OF DUNGEONESS CRABS HEADED FORSTORES AND RESTAURANTS A ALL ALONG THE PAS CIVIC COAST. BUT FISHERMAN ARE NERVOUS THAT NEWLY CREATED OCEAN SANCTUARIES ARE ABOUT TO EKE INTO THEIR CATCH.

>> YOU GET TO A POINT WHERE YOU SAY IS THIS FISHERY VIABLE ANY LONGER S IT WORTH IT FOR ME TO GO OUT AND CAMP A HANDFUL OF FISH.

>> THIS FISHERMAN AND OTHERS ARE WORRIED ABOUT DOZENS OF AREAS OFF THE COAST THAT CALIFORNIA HAS EITHER DESIGNATED OFF LIMITS TO FISHING OR HAS LIMITED THE TAKE. ENVIRONMENTALISTS SAY THESE MARINE PROTECTED AREAS AS THEY'RE CALLED, ARE NECESSARY BECAUSE OF OVERFISHING AND POLLUTION.

>> OUR BIGGEST CHALLENGE IS 90% OF 9 BIG FISH ON THE PLANET ARE ALREADY GONE. YOU KNOW, 75% OF THE FISH SPECIES IN MOST. WORLD'S OCEANS ARE FISHED TO THEIR ABSOLUTE LIMITS.

>> HUMAN DISTURBANCE, THIS POLLUTION, IT'S DEVELOPMENT ALONG OUR SHORES THAT WERE ENCROACHING ON HABITATS.

>> MARIA BROWN IS SUPERINTENDENT OF THE NATIONAL MARINE SANCTUARY OFF SAN FRANCISCO.

>> THE OCEAN ISN'T LIMITLESS. IT IS THE SUPPLY OF THE PLANET AND IT IS BEING AFFECTED OVERAND OVER AGAIN BY DEATH BY A MILLION CUTS.

>> IN DECEMBER THE STATE FISH AND GAME COMMISSION NARROWLY VOTED TO ESTABLISH 36 PROTECTED AREA AS LONG THE STATE'S SOUTHERN COASTLINE. MORE THAN 350 SQUARE MILES. THAT'S MORE THAN 15% OF SOUTHERN COASTAL WATERS WHERE COMMERCIAL AND SPORT FISHING IS EITHER RESTRICTED OR FORBIDDEN. PLANS FOR NORTHERN WATERS WILL BE IN PLACE BY 2012.

>> WHEN IT ALL GETS DONE IT WILL BE A WATERSHED MOMENT FOR THE STATE, ACCORDING TO KEN WISEMAN, EXECUTIVE DIRECTOR OF THE CALIFORNIA MARINE LIFE PROTECTION ACT INITIATIVE, A PARTNERSHIP BETWEEN THE STATE AND PRIVATE GROUPS.

>> THERE ARE BIG RESERVES AND THERE ARE SPECIFIC ONES IN FLORIDA OR IN NEW ZEALAND BUT NEVER BEFORE HAVE WE DONE THE ENTIRE NETWORK WHERE THE WHOLE STATE IS CONNECT ADD LONG ALL 1200 MILES OF THE COASTLINE. AND I THINK IT'S GOING TO REALLY SET A TREND AND HAVE A HEALTHIER OCEAN.

>> CALIFORNIA ACTUALLY BEGAN TRYING TO PRESERVE THE OCEAN NEARLY 100 YEARS AGO. BUT THE AREAS CHOSEN FOR PROTECTION WERE TOO SMALL AND DIDN'T WORK VERY WELL. THIS TIME THE ZONES ARE BIGGER AND TEAMS OF SCIENTISTS HAVE ADVISED THE STATE ON WHICH AREAS TO PROTECT, WHICH SPECIES ARE CRUCIAL, AND HOW TO MONITOR THE ZONES TO SEE IF THEY ARE WORKING. THERE ARE NO MARKERS OR BOUNDARY LINES ON THE SURFACE OF THE OCEAN. FISHERMAN AND OTHERS ARE EXPECTED TO READ NOTICES AND USE GPS TO STAY OUT OF PROTECTED AREAS. AS FOR THE FISH, I ASKED STEVE WISEBURG. A BIOLOGIST WITH THE CALIFORNIA OCEAN PROTECTION COUNSEL.

>> YOU THINK A FISH IS GOING TO KNOW THAT THIS IS A PROTECTED AREA AND OVER THAT LINE THEY COULD CATCH ME?

>> THERE ARE, THERE ARE MPAs THAT HAVE BEEN DONE IN OTHER PARTS OF THE WORLD WHERE SCIENTISTS HAVE GONE AND TAGGED THE FISH AND AFTER A WHILE THE FISH DO FIGURE OUT WHERE THE BOUNDARIES ARE AND YOU ACTUALLY SEE THEM MAINTAINING THEMSELVES WITHIN THE BOUNDARIES.

>> MARK CARR A PROFESSOR OF MARINE ECOLOGY AT THE UNIVERSITY OF CALIFORNIA AT SANTA CRUZ HAS ADVISED THE STATE ON MARINE PROTECTED AREAS SINCE THE PROGRAM GOT GOING SEVERAL YEARS AGO.

>> THERE REALLY MORE LIKE THE NATIONAL PARKS ON LAND. WHERE PEOPLE ONLY GO THERE TO ENJOY THE NATURAL ENVIRONMENT AND TO RECOGNIZE THAT WE ARE PROTECTING INTACT ECOSYSTEMS FOR FUTURE GENERATIONS.

>> CARR ALSO THINKS THE PROTECTED AREAS WILL BE USEFUL AS A BASELINE TO SEE HOW A HEALTHY REGION COMPARES TO THE REST OF THE OCEAN. ONE OF CARR'S MAIN THERES IS UNDERWATER KELP FORESTS WHOSE HEALTH HE CONSIDERS A MAJOR FACTOR IN SUPPORTING SEA LIFE.

>> WE WANT TO MAKE SURE THERE'S PLENTY OF KELP THAT PRODUCES PLENTY OF HABITAT TO SUPPORT ALL OF THE OTHER FISH AND THE INVERT BRATS IN THE SYSTEM. AND SO WE SEND THESE CREWS IN THAT ARE TRAINED TO COUNT THE INVERTBRATES, ALGAE AND FISHES USING SCUBA TO CHARACTERIZE THE RELATIVE NUMBERS OF EACH OF THE DIFFERENT SPECIES.

>> WHILE ENVIRONMENTALISTS ARE THRILLED AT THE EXPANSION OF PROTECTED AREAS, MANY FISHERMAN REMAIN UNHAPPY. IN THE TWO YEARS OF COUNTLESS MEETINGS UP AND DOWN THE COAST, FISHERMAN, SURFERS, BUSINESSMEN, CONSERVATIONISTS HAVE SPARRED.

>> FISHERMAN ARE NOT TRYING TO HIDE ANYTHING. WE JUST WANT TO MAKE A LIVING, THAT'S ALL. JUST FEED OUR FAMILIES AND PUT FOOD ON THE TABLE.

>> AMONG THOSE WHO TESTIFIED AGAINST PROT TECTED AREAS IS LARRY COLLINS, PRESIDENT OF THE CRAB BOAT OWNERS ASSOCIATION.

>> THERE ARE PLACES THAT I HAVE PUT MY CRAB TRAPS IN FOR THE LAST 20 YEARS THAT I'M NOT GOING TO BE ABLE TO SET MY CRAB TRAPS THERE ANY MORE. IT'S JUST LISTENS YOUR OPTIONS.

>> Reporter: BESIDES CREATING PROBLEMS FOR FISHERMAN LIKE HIM, COLLINS THINKS THE MARINE PROTECTED AREAS WON'T DO MUCH GOOD.

>> THERE'S NO NEED FOR THEM. THERE'S NO NEED FOR THEM AT ALL IT DOESN'T MAKE ANY SENSE TO PROTECT ONE LITTLE PART OF THE OCEAN. YOU GOT TO PROTECT THE WHOLE THING.

>> Reporter: BUT PROTECTING CRUCIAL ZONE DOESN'T AFFECT-- DOES IN EFFECT PROTECT THE WHOLE THING ARGUES BIOLOGIST MARK CARR.

>> MARINE PROTECTED AREAS ARE THOUGHT TO BE SUCH A CRUCIAL TOOL FOR WHAT IS CALLED ECOSYSTEM-BASED MANAGEMENT BECAUSE PROTECTED AREA WILL PROTECT ALL THE SPECIES THAT INTERACT WITH ONE ANOTHER WITHIN A ECOSYSTEM RATHER THAN JUST ONE LITTLE PIECE AT A TIME, SPECIES BY SPECIES.

>> Reporter: EVEN SO KEN WISEMAN SAYS HE TAKES SERIOUSLY THE CONCERNS OF FISHERMAN LIKE LARRY COLLINS.

>> I SAY TO LARRY AND HIS COLLEAGUES WHO WE INVITED TO COME ON DOWN AND SAY LET'S FIGURE OUT HOW WE CAN MINIMIZE THAT DAMAGE TO YOUR INDUSTRY AT THE SAME TIME LET'S TALK ABOUT HOW WE CAN DO THE LONG-TERM INVESTMENT THAT MAKES SURE YOU HAVE FISH FOR YOU AND YOUR GRANDKIDS. BUT I THINK WE WORKED PRETTY HARD TO MAKE SURE THAT NOBODY WAS PUT OUT OF BUSINESS.

>> Reporter: DESPITE DISAGREEMENTS AND SOME LEGAL ACTION, THE ZONESES ARE BECOMING LAW. SCIENTISTS SAY IT WILL TAKE AT LEAST FIVE YEARS OF CLOSE MONITORING BEFORE THEY KNOW HOW EFFECTIVE MARINE PROTECTED AREAS ARE IN RESTORING HEALTH TO THE OCEAN.

>> Woodruff: FINALLY TONIGHT, CONFLICT AMONG THE WORLD'S OIL PRODUCERS DRIVES UP PRICES. MARGARET WARNER HAS OUR STORY.

>> Warner: THE PRICE OF OIL CLIMBED TO NEARLY $102 A BARREL TODAY, UP NEARLY 3% IN TWO TRADING DAYS, AFTER A BITTERLY DIVIDED ORGANIZATION OF PETROLEUM EXPORTING COUNTRIES, OR OPEC, FAILED TO AGREE TO INCREASE OIL PRODUCTION. SAUDI ARABIA LED THE PUSH TO RAISE PRODUCTION QUOTAS YESTERDAY, BUT IRAN AND OTHERS BALKED. AFTER YESTERDAY'S SESSION IN GENEVA, THE SAUDI OIL MINISTER CALLED IT "ONE OF THE WORST MEETINGS WE'VE EVER HAD." WE LOOK AT WHAT WAS BEHIND THIS, AND THE LIKELY IMPACT, WITH ED CROOKS, THE U.S. INDUSTRY AND ENERGY EDITOR OF "THE FINANCIAL TIMES." AND ED CROOKS, WELCOME. THIS IS THE VERY FIRST TIME, AT LEAST IN DECADES THAT OPEC HAS GONE TO A MEETING LIKE THIS AND FAILED TO COME OUT WITH SOME AGREEMENT. WHAT HAPPENED?

>> YEAH, AS YOU SAY IT IS A VERY, VERY DRAMATIC MEETING, VERY UNUSUAL DEVELOPMENT PARTICULARLY IN THE SENSE THAT SAUDI ARABIA WAS DEFEATED. SAUDI ARABIA CLEARLY WENT INTO THE MEETING WANTING AN INCREASE IN PRODUCTION. SAUDI ARABIA SAID THE PRICE OF OIL IS TOO HIGH, AT AROUND $100 IT WOULD LIKE TO SEE IT COME DOWN PERHAPS EVEN TO THE $80 REGION AND IT WANTED TO INCREASE PRODUCTION IN ORDER TO MAKE THAT HAPPEN. AND USUALLY WHAT SAUDI ARABIA WANTS, IT ET GOES. IT'S THE BIGGEST MEMBER OF OPEC, THE MOST POWERFUL, THE WORLD'S BIGGEST OIL EXPORTER. AND SO USUALLY THEY'RE ABLE TO SWING THE OTHER COUNTRIES BEHIND THEM AND GET THEM TO GO ALONG WITH WHAT THEY WANT. NOT THIS TIME. AS YOU WERE SAYING IN YOUR INTRODUCTION, THERE WAS A COALITION OF COUNTRIESES, PROBABLY LEAD BY IRAN BUT WITH A NUMBER OF VERY OTHER, A NUMBER OF OTHER COUNTRIES VERY PROMINENT IN THERE, VENEZUELA, ANOTHER NOTORIOUS OPEC HARD-LINER BUT ALSO SOME COUNTRIES THAT YOU MIGHT THINK OF RATHER MORE CENTRIST AND MODERATE INCLUDING ANGOLA AND IRAQ, ACTUALLY ALSO VOTING AGAINST THIS. AND AT GERIA, ANOTHER ON ONE-- ALGERIA, ALL OPPOSING THE SAUDI PROPOSAL SAYING THEY DIDN'T WANT PRICES TO-- THEY WEREN'T GOING TO PRODUCE MORE OIL SO IT WAS DEFEATED.

>> HOW MUCH OF THIS WAS OVER DIFFERENCES IN THE ECONOMICS OF THE WORLD OIL MARKET AND HOW MUCH WAS DRIVEN BY POLITICS?

>> BOTH. AND THE TWO THINGS I THINK VERY MUCH PLAY TOGETHER. ON THE ECONOMIC SIDE, THERE ARE DIFFERENCES OF INTEREST IN TERMS OF THE WAY THE OIL MARKET WORKS BUT A LOT OF THE COUNTRIES CERTAINLY THIS IS TRUE OF IRAN AND VENEZUELA, THEY'RE BASICALLY PRODUCING ABOUT AS MUCH OIL AS THEY CAN AT THE MOMENT ALREADY, REGARD WILL OF THE OPEC QUOTA SO AN INCREASE IN OPEC LIMIT WOULDN'T HAVE HELPED THEM. THEY WOULDN'T BE ABLE TO SELL ANY MORE OIL SO THEY DIDN'T HAVE MUCH INTEREST IN THAT. WHERE SAUDI ARABIA ON THE OTHER HAND COULD PRODUCE MORE OIL. SAUDI ARABIA ALSO HAS THE WORLD'S LARGEST OIL RESERVES. AND SO IT HAS VERY MUCH AN INTEREST IN NOT PUTTING THE PRICE OF OIL SO HIGH THAT IT ENCOURAGES ALTERNATIVES TO IL O. SAUDI ARABIA DOESN'T WANT THE REST OF THE WORLD MOVING TO ELECTRIC CARS, USING MORE BIOFUELS, USING PERHAPS NATURAL GAS IN THEIR VEHICLES AND SO ON. SO SAUDI ARABIA GETS WORRIED IF THE PRICE IS TOO HIGH AND ALSO IF IT LOOKS LIKE THE PRICE OF OIL IS GOING TO TIP THE WORLD ECONOMY INTO RECESSION WHICH CERTAINLY LOOKS LIKE A REAL RISK AT THE MOMENT SO THOSE ARE ALL THE ECONOMIC FACTORS. THEN YOU'VE ALSO GOT THESE POLITICAL DIVISIONS. LONG RUNNING POLITICAL TENSION AND SUSPICION BETWEEN SAUDI ARABIA AND IRAN, VERY MUCH INFLAMED AT THE MOMENT BECAUSE OF BAHRAIN. BAHRAIN A SMALL ISLAND STATE IN THE PERSIAN GULF IN SWEEN AUDI/ -- SAUDI ARABIA AND IRAN, PROTESTS THERE, PROTESTS AGAIN THE GOVERNMENT, VIOLENCE, MASS AEST ARES AND SO ON. AND THE ISSUE THERE IS THAT SAUDI ARABIA BACKS THE BAHRAINI GOVERNMENT, SENT TROOPS TO HELP THE BAHRAINI GOVERNMENT BUT THE MAJORITY POPULATION IN BAHRAIN IS SHIITE AND THEREFORE HAS TIES TO IRAN. WHICH HAS A MINORITY SHIITE POPULATION. AND THERE IS A STRONG SUSPICION IN BAHRAIN THAT IRAN IS ACTUALLY TOMENTING DISCONTENT, STOKING UP THE PROTESTS AGAINST THE GOVERNMENT AND SO ON. THIS HAS BEEN A FLASHPOINT IN THIS VERY SENSITIVE AREA BECAUSE THAT IS WHERE A LOT OF THE OIL IS ACTUALLY PROUD. WHERE A LOT OF THE OIL TRAVELS THERE THROUGH THE PERSIAN GULF THAT CAUSED A GREAT DEAL OF POLITICAL TENSION INSIDE OF OPEC AS WELL.

>> Warner: THIS IS THE FIRST OPEC MEETING SINCE THE ARAB UPRISING BEGAN AROUND AT RAB WORLD. HOW MUCH OF THAT WAS A FACTOR MAYBE IN ANOTHER WAY. FOR INSTANCE SAUDI REALLY WANTING TO PUMP IN SOME OIL RIGHT NOW?

>> YEAH, ABSOLUTELY. THAT IS ANOTHER FACTOR FOR QUITE A LOT OF COUNTRIES. SAUDI A ARABIA HAPPY TO SEE LITERAL PRICES, A LOT OF OTHER COUNTRIES WANT TO SEE OIL AT $100 AND WILL BE CONCERNED IF IT FELL BELOW THAT BECAUSE THEY HAVE THESE VERY LARGE SOCIAL PROGRAMS THAT THEY WANT TO SPEND THEIR MONEY ON. THEY ARE CONCERNED ABOUT POLITICAL INABILITY. AS YOU SAY THEY LOOK AT THE ARAB SPRING AROUND THE ARAB WORLD. THEY SEE GOVERNMENTS BEING OVERTHROWN. THEY SEE PROTESTS IN VERY MANY COUNTRIES. THEY DON'T WANT THAT TO HAPPEN TO THEM. THEY WANT TO SPEND AS MUCH MONEY AS POSSIBLE ON SOCIAL BENEFITS, ON PENSIONS, ON SCHOOLS, WHATEVER IT MAY BE.

>> TO KEEP PEOPLE HAPPY.

>> THEY NEED THE OIL REVENUES TO KEEP PEOPLE HAPPY AND SO THEY WOULD LIKE TO KEEP ALL OF THAT HIGH LEVEL OF $100 OR MORE.

>> LET ME ASK YOU FINALLY THE QUESTION THAT IS OF MOST INTEREST PROBABLY TO OUR VIEWERS WHICH IS WHAT IS THIS GOING TO MEAN FOR OIL PRICES IN THE SHORT AND MEDIUM TERM AND GAS PRICES HERE IN THE U.S.?

>> WELL, I THINK THERE IS KIND OF A GOOD NEWS AND BAD NEWS. I THINK POSSIBLY THE GOOD NEWS IS THAT WE MAY WELL SEE SAUDI A ARABIA JUST IGNORING WHAT OPEC DECIDED AND PUMPING MORE OIL THEY HAVE ALREADY BEEN PUMP A LITTLE MORE OVER THE PAST FEW MONTHS. WE MAY WELL THEM GOING FURTHER DUMPING OIL ON TO THE MARKET FOR THAT REASON, THAT THEY WANT TO LOWER OIL PRICES SORK WE COULD WELL SEE OIL PRICES COME DOWN FROM WHERE THEY ARE, AND THAT WOULD MEAN CHEAPER GASOLINE AT THE PUMPS. BUT THERE IS A KIND OF DOWNSIDE, DARK SIDE OF THAT WHICH IS THE ISSUE OF SPARE CAS PATE. THE AMOUNT OF LEEWAY IN THE WORLD OIL SYSTEM. BECAUSE SAUDI ARABIA IS ESSENTIALLY THE ONLY COUNTRY THAT HAS A SIGNIFICANT AMOUNT OF SPARE CAPACITY THAT COULD PUMP MORE OIL IF IT WERE NEEDED, IF THERE WERE PROBLEMS ELSEWHERE IN THE SYSTEM. SO THE MORE PRODUCTION THAT SAUDI ARABIA HAS, THE LESS SPARE CAPACITY, THE LESS MARGIN FOR ERROR IN THE WORLD OIL SYSTEM. AND THAT COULD KEEP THE MARKETS WORRIED. SO MY SENSE IS THAT ALTHOUGH WE PROBABLY WILL SEE OIL PRICES COMING DOWN FOR A BIT FROM NOW, IT MAY NOT LAST VERY LONG AND I CERTAINLY THINK WE WILL HAVE TO GET USED TO THESE KIND OF LEVELS, OIL AT ABOUT $100, GASOLINE AT ABOUT $4 FOR THE FORESEEABLE FUTURE.

>> ED CROOKS OF "THE FINANCIAL TIMES", THANK YOU VERY MUCH.

>> Brown: AGAIN, THE MAJOR DEVELOPMENTS OF THE DAY: A HEAT WAVE BLISTERED MUCH OF THE EASTERN U.S. WITH RECORD READINGS IN SEVERAL CITIES. AND A HUGE WILDFIRE RAGED ON IN ARIZONA, THREATENING SEVERAL SMALL TOWNS. REPUBLICAN PRESIDENTIAL CONTENDER NEWT GINGRICH LOST HIS ENTIRE SENIOR CAMPAIGN STAFF, BUT HE VOWED TO STAY IN THE RACE. AND HUNDREDS OF SYRIANS FLED INTO TURKEY AS SYRIAN GOVERNMENT TROOPS ENCIRCLED A REBELLIOUS NORTHERN TOWN. AND TO HARI SREENIVASAN FOR WHAT'S ON THE NEWSHOUR ONLINE. HARI.

>> Sreenivasan: WE'VE POSTED NEW SATELLITE IMAGERY OF THE ARIZONA WILDFIRE THAT ILLUSTRATES THE SCOPE OF THE BLAZE. AND WHAT DOES THE EDGE OF OUR SOLAR SYSTEM LOOK LIKE? A NASA COMPUTER MODEL OFFERS SURPRISING NEW DETAILS-- FIND THAT ON OUR "SCIENCE" PAGE. AND JEFF TALKS TO THE U.S. COMMISSIONER OF THIS YEAR'S VENICE BIENNALE ART EXHIBITION ABOUT USING OLYMPIC ATHLETES AS PART OF THE ART. ALL THAT AND MORE IS ON OUR WEB SITE, newshour.pbs.org. JEFF.

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

>> Woodruff: AND I'M JUDY WOODRUFF. WE'LL SEE YOU ONLINE, AND AGAIN HERE TOMORROW EVENING WITH MARK SHIELDS AND DAVID BROOKS, AMONG OTHERS. THANK YOU AND GOOD NIGHT. MAJOR FUNDING FOR THE PBS NEWSHOUR HAS BEEN PROVIDED BY: CHEVRON. WE MAY HAVE MORE IN COMMON THAN YOU THINK. AND BY THE ALFRED P. SLOAN FOUNDATION. SUPPORTING SCIENCE, TECHNOLOGY, AND IMPROVED ECONOMIC PERFORMANCE AND FINANCIAL LITERACY IN THE 21ST CENTURY. AND WITH THE ONGOING SUPPORT OF THESE INSTITUTIONS AND FOUNDATIONS. AND... THIS PROGRAM WAS MADE POSSIBLE BY THE CORPORATION FOR PUBLIC BROADCASTING. AND BY CONTRIBUTIONS TO YOUR PBS STATION FROM VIEWERS LIKE YOU. THANK YOU. Captioning sponsored by MacNEIL/LEHRER PRODUCTIONS Captioned by Media Access Group at WGBH access.wgbh.org

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