PBS NewsHour; October 17, 2012 3:00pm-4:00pm PDT

Captioning sponsored by MacNEIL/LEHRER PRODUCTIONS

>> Woodruff: PRESIDENT OBAMA AND MITT ROMNEY BOTH APPEALED TO WOMEN VOTERS IN SWING STATES TODAY, FRESH OFF LAST NIGHT'S COMBATIVE AND INTENSELY PERSONAL TOWN HALL DEBATE. GOOD EVENING. I'M JUDY WOODRUFF.

>> Ifill: AND I'M GWEN IFILL. ON THE NEWSHOUR TONIGHT, HOW THE TWO MEN PERFORMED, AND WHERE THE RACE STANDS, 20 DAYS OUT FROM ELECTION DAY.

>> Woodruff: PLUS, RAY SUAREZ LOOKS AT THE CHARGES AND COUNTER CHARGES OVER THE FACTS LAST NIGHT.

>> Ifill: JEFFREY BROWN EXAMINES THE REALITY AND THE RHETORIC OVER U.S.-CHINA POLICY AND TRADE.

>> Woodruff: FROM OUR BRAND-NEW SERIES, "AGENTS FOR CHANGE," FRED DE SAM LAZARO PROFILES A GROUP THAT OFFERS REFUGE FOR VICTIMS OF MODERN-DAY SLAVERY IN THE PHILIPPINES.

>> 15% OF THE GROSS DOMESTICS PRODUCTS COMES FROM MONEY SENT HOME BY OVERSEAS FILIPINOS, BUT THERE IS A DARK DOWNSIDE THAT MAKES THESE VULNERABLE.

>> AND SPENCER MICHAEL HAS THE STORY OF

>> Ifill: AND SPENCER MICHELS HAS THE STORY OF HIGH TECH SAILBOATS GEARING UP FOR THE AMERICA'S CUP IN SAN FRANCISCO NEXT YEAR.

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

>> WHEN I WAS IN AN ACCIDENT, I WAS WORRIED, THE HEALTH SYSTEM SPOKE A LANGUAGE ALL ITS OWN, WITH UNITED HEALTH CARE, I GOT HEALTH CARE FOR MY LIFE, INFORMATION ON MY PHONE, AND CONNECTION TO DOCTORS WHO GET WHERE I'M FRIIÍO, AND TOOLS TO ESTIMATE WHAT ARE MY COSTS, SO I MIGHT NEVER MISS A BEAT.

>> WE'RE MORE THAN 78,000 PEOPLE LOOKING OUT FOR MORE THAN 70 MILLION AMERICANS. THAT'S HEALTH IN NUMBERS. UNITED HEALTH CARE.

>> BEIJING, FOR 15 YEARS, VIKING HAS BROUGHT 40 MILLION TRAVELLERS TO ANOTHER WORLD, THE WORLD OF DRAMATIC LANDSCAPES. AND REMARKABLE AREAS. ALL BROUGHT TO LIFE WITH THE MODERN CONCEPT, SO TRAVELLERS CAN SPEND LESS TIME GETTING THERE AND MORE TIME THERE. VIKING CRUISES, EXPLORING THE WORLD IN COMFORT.

>> AND B 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.

>> Ifill: THE PRESIDENTIAL CAMPAIGN MOVED ON TODAY, WITH JUST 20 DAYS TO GO. WITH DEBATE NUMBER TWO IN THE BOOKS, INSTANT POLLS GAVE PRESIDENT OBAMA THE EDGE.

>> I'M STILL SPEAKING.

>> AND THE ANSWER IS I DON'T BELIEVE PEOPLE THINK THAT IS THE CASE. THAT WASN'T A QUESTION. THAT WAS A STATEMENT.

>> A FEISTY SECOND DEBATE THAT SAW THE PRESIDENT AND FORMER GOVERNOR-GENERAL FORM GOVERNOR GET UP CLOSE AND GENERAL. THE PRESIDENT FLEW TO IOWA WHERE HE TOLD SUPPORTERS THAT ROMNEY'S DEBATE PERFORMANCE RAISED SERIOUS QUESTIONS ABOUT HIS ECONOMIC PLAN.

>> President Obama: SO LET'S RECAP WHAT WE LEARNED LAST NIGHT. THE TAX PLAN, HIS JOBS PLAN DOESN'T CREATE JOB. HIS DEFICIT REDUCTION PLAN ADDS TO THE DEFICIT. SO I KNOW EVERYBODY HERE HAS HEARD OF THE NEW DEAL, YOU'VE HEARD OF THE FAIR DEAL, YOU'VE HEARD OF THE SQUARE DEAL. MITT ROMNEY IS TRYING TO SELL YOU A SKETCHY DEAL. WE ARE NOT BUYING IT.

>> ROMNEY HEADED TO ANOTHER BATTLEGROUND STATE, VIRGINIA, WHEN HE SAID THE PRESIDENT FAILED TO EXPLAIN WHY HE DESERVES A SECOND TERM.

>> DON'T YOU THINK IT IS TIME FOR HIM TO FINALLY PUT TOGETHER A VISION OF WHATE WOULD DO IN THE NEXT FOUR YEARS IF HE WERE ELECTED? HE HAS TO COME UP WITH THAT OVER THIS WEEKEND, BECAUSE THERE IS ONLY ONE DEBATE LEFT ON MONDAY. I THINK IT IS PRETTY CLEAR WHEN IT COMES TO HIS POLICIES, HIS ANSWERS AND HIS AGENDA, HE IS PRETTY MUCH RUNNING ON FUMES. AND THE AMERICAN PEOPLE WANT SOME REAL ANSWERS AND A REAL AGENDA. AND THAT'S WHY PAUL RYAN AND I ARE GOING TO BECOME THE NEXT PRESIDENT AND VICE PRESIDENT OF THE UNITED STATES.

>> BOTH CANDIDATES APPEALED TO WOMEN VOTERS TODAY, PICKING UP WHERE THEY LEFT OFF LAST NIGHT, WHEN ONE OF THE TOWNHALL VOTERS ASKED WHERE THEY STAND ON PAY EQUITIES. THE PRESIDENT POINTED TO HIS 2009 FINDING OF THE FAIRER PAY ACT AS AN EXAMPLE OF HIS SUPPORT FOR WOMEN.

>> President Obama: THAT'S AN EXAMPLE OF THE KIND OF ADVOCACY WE NEED BECAUSE WOMEN ARE ARE INCREASINGLY THE BREAD WINNERS IN THE FAMILY. THIS IS NOT JUST A WIN ISSUE, THIS IS A FAMILY ISSUE, A MIDDLE CLASS ISSUE, AND THAT'S WHY WE'VE GOT TO FIGHT FOR IT.

>> ROMNEY TAUGHTED HIS RECORD AS MASSACHUSETTS GOVERNOR, WHERE HE SAID HE WENT OUT OF HIS WAY TO RECRUIT WOMEN FOR HIS CABINET.

>> I WENT TO MY STAFF AND SAID, HOW COME ALL OF THE PEOPLE FOR THESE JOBS ARE ALL MEN. AND THEY SAID THESE ARE THE PEOPLE WHO HAVE THE QUALIFICATIONS. I SAID, GOSH, CAN'T WE FIND SOME WOMEN THAT ARE ALSO QUALIFIED. SO WE TOOK A CONCERTED EFFORT TO GO OUT AND FIND WOMEN WHO HAD BACKGROUNDS THAT COULD BE QUALIFIED TO BECOME MEMBERS OF OUR CABINET. I WENT TO A NUMBER OF WOMEN'S GROUPS AND SAID CAN YOU HELP US FIND FOLKS. THEY BROUGHT US WHOLE BINDERS OF WOMEN.

>> Reporter: THAT LAST REMARK IMMEDIATELY TOUCH OFF A STRING OF PARITIES AMONG DEMOCRATS. IN IOWA, WHILE TALKING ABOUT THE NEED FOR MORE MATH AND SCIENCE TEACHERS, PRESIDENT OBAMA JOINED IN.

>> President Obama: I'VE GOT TO TELL YOU, WE DON'T HAVE TO COLLECT A BUNCH OF BINDERING TO FIND QUALIFIED, TALENTED, DRIVEN YOUNG WOMEN WILLING TO LEARN AND TEACH IN THESE FIELDS RIGHT NOW. [APPLAUSE AND CHEERS]

>> President Obama: AND WHEN YOUNG WOMEN GRADUATE, THEY SHOULD GET EQUAL PAY FOR EQUAL WORK. THAT SHOULD BE A SIMPLE QUESTION TO ANSWER.

>> ROMNEY THOUGHT TO TURN THE TABLES TODAY IN VIRGINIA.

>> WHY IS IT THAT THERE ARE 3.6 MILLION MORE WOMEN IN POVERTY TODAY THAN WHEN THE PRESIDENT TOOK OFFICE? THIS PRESIDENT HAS FAILED AMERICA'S WOMEN. THEY HAVE SUFFERED IN TERMS OF GETTING JOBS. THEY'VE SUFFERED IN TERMS OF FALLING INTO POVERTY. THIS IS A PRESIDENCY THAT HAS NOT HELPED AMERICA'S WOMEN.

>> THE CANDIDATES ALSO SPARRED LAST NIGHT OVER ABORTION RIGHTS AND WEATHER CONTRACEPTION SHOULD BE COVERED BY INSURANCE.

>> President Obama: HE SUGGESTED THAT EMPLOYERS SHOULD BE ABLE TO MAKE THE DECISION AS TO WHETHER OR NOT A WOMAN GETS CONTRACEPTION THROUGH HER INSURANCE COVERAGE. THAT'S NOT THE KIND OF ADVOCACY THAT WOMEN NEED. WHEN GOVERNOR ROMNEY SAYS THAT WE SHOULD ELIMINATE FUNDING FOR PLANNED PARENTHOOD, THERE ARE WOMEN ALL ACROSS THE COUNTRY THAT RELY ON IT NOT JUST FOR CONTRACEPTIVE CARE, BUT FOR MAMMOGRAMS.

>> Reporter: ROMNEY DID NOT RESPOND DIRECTLY ON THE PLANNED PARENTHOOD, BUT HE SAID IT WOULD BE ON THE CHOPPING BLOCK. HE SAID THE PRESIDENT MISCHARACTERIZED HIS POSITION, AND PROVIDING CONTRACEPTION COVERAGE SHOULD NOT BE REQUIRED UNDER THE HEALTH CARE LAW.

>> I DON'T THINK BUREAUCRATS IN WASHINGTON SHOULD TELL SOMEONE IF THEY CAN USE CONTRACEPTIVES OR NOT. EVERY WOMAN IN AMERICA SHOULD HAVE ACCESS TO CONTRACEPTIVES. AND THE PRESIDENT'S STATEMENT IS COMPLETELY AND TOTALLY WRONG.

>> Reporter: ROMNEY SUPPORTED ULTIMATELY UNSUCCESSFUL LEGISLATION TO ALLOW ANY EMPLOYER WITH MORAL OBJECTIONS TO OPT OUT TO BIRTH CONTROL. THE CANDIDATES FACE OFF ONE MORE TIME NEX MONDAY IN FLORIDA.

>> Woodruff: SO WHAT HAPPENS NEXT FOR THE MEN VYING FOR THE PRESIDENCY? WE TAKE A CLOSER LOOK WITH POLITICAL REPORTER KAREN TUMULTY OF THE "WASHINGTON POST" AND JULIE PACE, WHO COVERS THE WHITE HOUSE FOR THE ASSOCIATED PRESS.

>> Woodruff: WELCOME TO YOU BOTH. LET'S TALK FIRST ABOUT HOW THESE COMPAIGNS FEEL THAT THEY DID LAST NIGHT? JULIE, TO YOU FIRST. WHAT WAS IT THAT THE PRESIDENT'S TEAM WANTED TO ACCOMPLISH, AND DO THEY THINK THEY WERE SUCCESSFUL?

>> THE MISSION FOR THE PRESIDENT'S TEAM WAS PRETTY SIMPLE. IT WAS HAVE A BETTER DEBATE THAN THE FIRST TIME AROUND. THEY REALLY PRACTICED WITH THE PRESIDENT ON BEING MORE AGGRESSIVE. ON BEING MORE POINTED IN HIS CRITICISM OF MITT ROMNEY, AND IN TALKING TO AIDES, BOTH LAST NIGHT ON THE DEBATE SIDE AND AGAIN TODAY, THEY REALLY THINK HE DID ACCOMPLISH THIS MISSION. THEY FEEL VERY POSITIVE, VERY UPBEAT. IT IS A VERY DIFFERENT MOOD AROUND THE ABOU OBAMA CANE TODAY THAN AFTER THE LAST DEBATE. WE HAVE TO SEE WHAT THE LONG-TERM IMPACT IS, BUT IN TERMS OF THE MOOD, IT IS A FAR DIFFERENT ATMOSPHERE THAN IT WAS AFTER THE FIRST DEBATE.

>> Woodruff: KAREN, WOULD YOU ADD ANYTHING TO THAT? WHAT ABOUT THE ROMNEY FOLKS?

>> I THINK WHAT THEY WANTED TO DO WAS BUILD ON THE MOMENTUM THEY WERE GETTING OUT OF THAT FIRST DEBATE. NOT TO LOSE ANY OF THAT ENERGY. I THINK THAT GOVERNOR ROMNEY JUST SORT OF WAS THERE TO PARRY BACK EVERY POINT. THEY DISPUTED EVERY POINT. THE ENERGY ANSWER, WHERE ONE WAS UP, AND UP WAS UP AND DOWN WAS DOWN, AND THEY WERE THROWING OUT STATISTICS SO FAST. I THINK BOTH CAMPS CAME AWAY THINKING THEIR OWN SUPPORTERS ARE ENERGIZED AND EXCITED. BUT I DON'T KNOW WHO'S MINDS WOULD BE CHANGED BY LAST NIGHT'S DEBATE.

>> Woodruff: JULIE, WHAT ABOUT THIS FOCUS ON WOMEN VOTERS? WHAT IS IT -- AGAIN, YOU'RE DEALING WITH THE OBAMA CAMPAIGN FOR THE MOST PART. WHAT IS IT THAT THEY FEEL THEY NEED TO SAY THAT THEY HAVEN'T BEEN SAYING ALREADY TO WOMEN'S VOTERS.

>> YOU HERE FROM DEMOCRATS WHO ARE CLOSE TO THIS CONCERN, THAT THERE WAS SOME CONCERN AFTER THE FIRST DEBATE THAT GOVERNOR ROMNEY PRESENTED A SOFTER TONE, A BIT MORE MODERATE TONE, AND PERHAPS APPEALED TO UNDECIDED WOMEN. THAT IS A BIG CONCERN FOR OBAMA'S SUPPORTERS, BECAUSE THEY HAVE LONG HAD THE ADVANTAGE WITH WOMEN. SO THEY WANTED TO SHOW WOMEN VOTERS THAT THIS IS THE SAME GUY THAT YOU'VE KNOWN. THEY WANTED TO TALK ABOUT THIS POSITION ON THE LILY LEDBEDDER FAIR PAY ACT, AND THEY WANTED TO PAINT MITT ROMNEY AS SOMEBODY OUTSIDE OF THE MAINSTREAM, AND IF YOU'RE HEARING HIM GIVE MORE MODERATE POSITIONS ON WOMEN'S POSITIONS, THAT IS ROMNEY HIDING FROM HIS POSITIONS FROM EARLIER AND THE G.O.P. PRIMARY. IF YOU LOOK AT A STATE LIKE COLORADO, THOSE ARE THE SWING VOTERS THAT BOTH THESE COMPAIGNS ARE GOING AFTER. THAT'S WHY YOU'RE SEEING SO MUCH FOCUS ON WOMEN.

>> Woodruff: YOU KNOW WHAT I WAS STRUCK BY, THE POLLING -- SOME POLLS SUGGEST THERE HAS BEEN SOME SLIPPAGE FROM THE PRESIDENT AMONG WOMEN VOTERS, PRIMENARYLY WHITE WOMEN AND HIGHLY EDUCATED AFFLUENT WHITE WOMEN. I WAS REALLY STRUCK BY THE DEGREE TO WHICH THE PRESIDENT AGGRESSIVELY PROMOTED SOME OF THE THINGS HE HAS DONE, LIE CONTRACEPTIVE COVERAGE, AND HIS ECONOMIC ISSUES, AND HEALTH CARE REFORM IS AN ECONOMIC ISSUE, TO REALLY SORT OF TRY TO WEAVE HIS ENTIRE AGENDA INTO THE ECONOMY.

>> SO IT WAS THAT TRANSPARENT?

>> I CANNOT RECALL HIM BEING, AGAIN, THIS ASSERTIVE, TO PUT ALL OF THIS INTO A BIGGER PICTURE FOR HIS AGENDA.

>> Woodruff: WHAT ABOUT A ROMNEY -- IN THE ROMNEY CAMP, THEY MUST FEEL LIKE THEY MADE SOME HEADWAY IN SOME OF THE POLLS SHOWN AMONG WOMEN. WHAT MESSAGE DO THEY NEED TO GET ACROSS TO THESE WOMEN?

>> I THINK IT JUST COMES DOWN TO CLOSING THE DEAL. CONVINCING PEOPLE THAT THE NEXT FOUR YEARS UNDER BARACK OBAMA ARE NOT GOING TO BE ANY BETTER THAN THE LAST FOUR YEARS ARE. SO ONCE AGAIN, WE HAD MITT ROMNEY PROMOTING HIS OWN ABILITIES, HIS BUSINESS BACKGROUND, AND BASICALLY HE KEPT SAYING OVER AND OVER AND OVER AGAIN I KNOW HOW TO DO THIS.

>> Woodruff: AND, JULIE, WE HEARD MITT ROMNEY KEPT BRINGING IT BACK TO THE ECONOMY AND JOBS, AND SAYING IF WE CAN GET THE ECONOMY GOING, THAT IS GOING TO HELP WOMEN. HOW MANY OBAMA FOLKS COUNTERED THAT.

>> THE ECONOMIC DISCUSSION IN THE OBAMA CAMPAIGN IS REALLY INTERESTING RIGHT NOW. BECAUSE OBVIOUSLY THE PRESIDENT'S ECONOMIC RECORD HAS UPS AND DOWNS, AND PERHAPS MORE DOWNS OVER THE PAST FOUR YEARS, BUT WHAT THEY'VE STARTED TO SEE IN PUBLIC POLLING IS THAT MOOD OF THE COUNTRY ON THE ECONOMY IS SHIFTING SLIGHTLY. AND IT IS BECOMING A BIT MORE POSITIVE. WE'VE SEEN THE PRESIDENT START TO EMBRACE MORE FULLY, AND TOUCHED ON HIS ECONOMIC RECORD AND HOW HIS POLICIES ALSO RELATE TO THE ECONOMY, THAN WE HAVE THAN EARLIER IN THE CAMPAIGN. YOU CAN'T SIMPLY RUN AWAY FROM THE ISSUE THAT IS AT THE TOP OF VOTERS' MINDS IN THIS ELECTION. AND THE OTHER PART IS WHAT WE SEE WITH VOTERS FEELING MORE CONFIDENT. THEY WANT THE VOTERS TO SAY I'M FEELING MORE CONFIDENT BECAUSE OF THE POLICIES THAT THE PRESIDENT HAS PUT IN PLACE, BUT NOT FOR ANY OTHER REASON OR ANYTHING THAT I THINK MITT ROMNEY MIGHT DO IN HIS TERM.

>> Woodruff: KAREN, WITH LESS THAN THREE WEEKS LEFT, WHAT IS YOUR SENSE OF THE COMPAIGNS. LET'S START WITH ROMNEY. WHAT DO THEY FEEL THEY HAVE GOT TO DO RIGHT NOW? CLEARLY GETTING THEIR VOTE OUT. BUT WHAT DO THEY NEED TO BE SAYING AND WHERE DO THEY NEED TO BE?

>> I DO THINK THIS LAST DEBATE IS GOING TO BE A BIG ONE. THEY'RE ALL BIG ONES. THIS ONE WE SAW THE BEGINNING OF WHAT I THINK IS GOING TO BE A BIG ARGUMENT NEXT MONDAY NIGHT OVER BENGHAZI. IT IS INTERESTING THAT MITT ROMNEY HAS CHOSEN TO ATTACK THE PRESIDENT IN AN AREA THAT WAS CONSIDERED A GREAT AREA OF STRENGTH FOR HIM. HE IS GOING INTO THE COMMANDER IN CHIEF'S TERRITORY. I THINK THIS IS GOING TO BE A BIG MOMENT. AGAIN, I JUST THINK POUNDING AWAY AT THE COMPETENCE ARGUMENT.

>> Woodruff: AND ONE LAST THING, JULIE. THERE WAS SOME REACTION, ESPECIALLY AMONG WOMEN, THAT THESE MEN WERE SO GOING AT IT, IN EACH OTHER'S FACES. IS THERE ANY CONCERN ON THE PART OF THE OBAMA CAMP THAT MAY BE TURNING PEOPLE OFF, ESPECIALLY WOMEN VOTERS.

>> NO ONE IS SAYING THAT TODAY. THEY'RE STILL ON A HIGH FROM THIS DEBATE. BUT YOU HEAR RUMBLINGS FROM THAT. I WAS IN THE DEBATE HALL LAST NIGHT, AND THERE WAS ONE MOMENT WHERE YOU SAW THESE TWO MEN START TO WALK TOWARDS EACH OTHER. AND THERE WAS A FACE-TO-FACE CONFRONTATION, AND IT WAS TWO ALPHAS FACING OFF. SO IF YOU'RE A WOMAN OUT THERE, HOW DO YOU REACT TO THAT? WE SPOKE TO SOME WOMEN WHO SAID IT DID SEEM A LITTLE AGGRESSIVE AND OVER THE TOP. BUT THESE ARE TWO MEN REALLY IN A TOUGH POLITICAL FIGHT, FIGHTING FOR THEIR POLITICAL LIVES, AND THAT'S WHAT YOU SAW ON STAGE.

>> Woodruff: AND KAREN, A FINAL THOUGHT?

>> THE OTHER ARGUMENT MITT ROMNEY MADE, HE CONTINUED THIS ARGUMENT I'M DIFFERENT. ONE OF THE MOST INTERESTING ANSWERS WHEN SHE WAS ASKED WHAT IS DIFFERENT ABOUT YOU FROM GEORGE W. BUSH? I THINK HE WAS NOT ONLY SOFTENING, BUT TRYING TO CONVINCE PEOPLE HE IS A DIFFERENT MODEL REPUBLICAN. BECAUSE BARACK OBAMA WAS TRYING TO HANG ALL OF THE REPUBLICAN POLICIES IN THE PAST AROUND MITT ROMNEY'S NECK.

>> Woodruff: WE'VE ONLY GOT FIVE DAYS, SIX DAYS UNTIL THE NEXT DEBATE. KAREN AND JULIE, THANK YOU BOTH. COMING UP, THERE IS MORE ON POLITICS, INCLUDING DISPUTING THE FACTS IN LAST NIGHT'S DEBATE. AND SPARRING OVER TRADE AND U.S./CHINA RELATIONS. PLUS, HELPING VICTIMS OF HUMAN TRAFFICKING; AND GETTING READY FOR THE AMERICA'S CUP. BUT FIRST, WITH THE OTHER NEWS OF THE DAY, HERE'S HARI SREENIVASAN.

>> Sreenivasan: THE F.B.I. HAS ARRESTED A BANGLADESHI MAN IN NEW YORK FOR ALLEGEDLY PLOTTING TO BLOW UP THE FEDERAL RESERVE BUILDING IN MANHATTAN. THAT'S JUST BLOCKS AWAY FROM THE WORLD TRADE CENTER SITE. AGENTS SEIZED THE MAN THIS MORNING AFTER HE PARKED A VAN OUTSIDE THE FED BUILDING. THEY SAID HE BELIEVED IT CARRIED A 1,000-POUND BOMB. IN FACT, THE EXPLOSIVES WERE INERT, PROVIDED AS PART OF A STING. LANCE ARMSTRONG STEPPED DOWN TODAY AS CHAIRMAN OF HIS CANCER- FIGHTING CHARITY, THE LIVESTRONG FOUNDATION. HE SAID HE WANTED TO SPARE THE GROUP FROM FALLOUT OVER A DOPING SCANDAL. SEPARATELY, NIKE SEVERED TIES WITH ARMSTRONG TODAY. IT CITED THE U.S. ANTI-DOPING AGENCY'S REPORT, DETAILING ALLEGATIONS OF EXTENSIVE DOPING BY ARMSTRONG AND HIS TEAMMATES. IN RUSSIA, INVESTIGATORS OPENED A CRIMINAL PROBE AGAINST A LEFTIST LEADER ACCUSED OF PLANNING MASS RIOTS AGAINST PRESIDENT VLADIMIR PUTIN. IT WAS THE LATEST MOVE IN A KREMLIN CRACKDOWN ON POLITICAL OPPONENTS. THIS NEW INVESTIGATION FOCUSES ON SERGEI UDALTSOV, THE LEADER OF THE LEFT FRONT OPPOSITION MOVEMENT. TODAY, OUTSIDE HIS MOSCOW HOME,

>> HOLD ON UNTIL THE END. DON'T BE SILENT. THAT'S THE MOST IMPORTANT THING. DON'T BE SILENT. IT IS A NEW WAVE OF OPPRESSION. IT IS PRECISELY A NEW WAVE OF OPPRESSION. IT IS ILLEGAL, AND IT IS THE REVENGE OF THIS GOVERNMENT FOR OUR ACTIVISM. I ASK ALL CITIZENS NOT TO BE SILENT, BUT RATHER TO BE ANGERED BY THIS.

>> Sreenivasan: UDALTSOV HAS LED ANTI-PUTIN PROTESTS FOR SEVERAL YEARS AND BEEN ARRESTED MORE THAN 100 TIMES DURING HIS POLITICAL CAREER. SEVERAL OTHER ACTIVISTS ARE ALSO UNDER SCRUTINY IN THE INVESTIGATION. THE U.S. HOUSING MARKET SHOWED NEW SIGNS OF A REBOUND IN SEPTEMBER. THE COMMERCE DEPARTMENT SAID CONSTRUCTION ON NEW HOMES ROSE 15%, THE MOST SINCE JULY OF 2008. BUT WALL STREET FAILED TO MAKE MUCH HEADWAY TODAY AFTER A DISAPPOINTING SALES REPORT FROM IBM. THE DOW JONES INDUSTRIAL AVERAGE GAINED JUST FIVE POINTS TO CLOSE AT 13,557. THE NASDAQ ROSE ABOUT THREE POINTS TO CLOSE AT 3104. FOUR MINOR PARTY PRESIDENTIAL CANDIDATES WILL HOLD THEIR OWN DEBATE IN CHICAGO NEXT TUESDAY. IT WILL BE MODERATED BY FORMER CNN TALK SHOW HOST LARRY KING, AND SHOWN ON THE INTERNET. THE CANDIDATES PLANNING TO TAKE PART ARE GARY JOHNSON OF THE LIBERTARIAN PARTY, JILL STEIN OF THE GREEN PARTY, VIRGIL GOODE OF THE CONSTITUTION PARTY, AND ROCKY ANDERSON OF THE JUSTICE PARTY. THOSE ARE SOME OF THE DAY'S MAJOR STORIES. NOW, BACK TO GWEN.

>> Ifill: AND WE RETURN TO LAST NIGHT'S DEBATE BY LOOKING MORE CLOSELY AT SOME OF THE DEBATABLE ARGUMENTS MADE BY BOTH CANDIDATES, AND SORTING THROUGH THE RHETORIC. RAY SUAREZ PICKS UP THAT PART OF THE STORY.

>> THE CONFRONTATIONS IN LAST NIGHT'S DEBATE CAME EARLY AND OFTEN, WITH CHARGES AND DENIALS FLYING. SO WE SPENT PART OF THIS DAY EXAMINING THE CANDIDATES' STATEMENTS FOR CONTEXT AND CONTRADICTIONS ON THREE KEY ISSUES. FIRST, LIBYA, AND THE ATTACK THAT KILLED THE U.S. AMBASSADOR AND THREE OTHER AMERICANS ON SEPTEMBER 11th. PRESIDENT OBAMA AND MITT ROMNEY SPARRED HEATEDLY OVER WHETHER THE ADMINISTRATION WAS HONEST ABOUT WHAT HAPPENED. THE PRESIDENT STRONGLY CRITICIZED ROMNEY'S INITIAL RESPONSE TO THE ATTACK.

>> President Obama: WHILE WE WERE STILL DEALING WITH OUR DIPLOMATS BEING THREATENED, GOVERNOR ROMNEY PUT OUT A PRESS RELEASE. TRYING TO MAKE POLITICAL POINTS. AND THAT'S NOT HOW A COMMANDER IN CHIEF OPERATES. YOU DON'T TURN NATIONAL SECURITY INTO A POLITICAL ISSUE. CERTAINLY NOT RIGHT WHEN IT'S HAPPENING.

>> Reporter: ROMNEY FIRED BACK THAT THE PRESIDENT'S TEAM BLAMED THE ATTACK ON AN ANTIMUSLIM VIDEO EVEN AFTER THEY KNEW IT WASN'T SO.

>> IT WAS A TERRORIST ATTACK, AND IT TOOK A LONG TIME FOR THAT TO BE TOLD TO THE AMERICAN PEOPLE. WHETHER THAT WAS SOME MISLEADING, OR, INSTEAD, WHETHER WE JUST DIDN'T KNOW WHAT HAPPENED. I THINK YOU HAVE TO ASK YOURSELF WHY DIDN'T WE KNOW FIVE DAYS LATER WHEN THE AMBASSADOR WENT ON TV TO SAY THIS WAS A DEMONSTRATION.

>> Reporter: THAT WAS IN REFERENCE TO SUSAN RICE'S STATEMENT ON SEPTEMBER 16th.

>> OUR CURRENT ASSESSMENT IS WHAT HAPPENED IN BENGHAZI WAS A REACTION TO WHAT HAD TRANSPIRED HOURS BEFORE IN CAIRO. ALMOST A COPYCAT OF THE DEMONSTRATIONS AGAINST OUR FACILITY IN CAIRO, WHICH WERE PROMPTED, OF COURSE, BY THE VIDEO.

>> Reporter: STATE DEPARTMENT OFFICIALS SAID LAST WEEK THEY NEVER BELIEVED THE VIDEO HAD CAUSED THE ATTACK. THE PRESIDENT SAID LAST NIGHT THE ATTACK IS STILL UNDER INVESTIGATION, BUT INSISTED THAT THERE WAS NO ATTEMPT TO DECEIVE.

>> President Obama: THE DAY AFTER THE ATTACK, GOVERNOR, I STOOD IN THE ROSE GARDEN, AND I TOLD THE AMERICAN PEOPLE AND THE WORLD THAT WE ARE GOING TO FIND OUT EXACTLY WHAT HAPPENED. THAT THIS WAS AN ACT OF TERROR. AND THE SUGGESTION THAT ANYBODY IN MY TEAM, WHETHER THE SECRETARY OF STATE, OUR U.N. AMBASSADOR -- ANYBODY ON MY TEAM WOULD PLAY POLITICS OR MISLEAD WHEN WE HAVE LOST FOUR OF OUR OWN, GOVERNOR, IS OFFENSIVE.

>> Reporter: AND THAT LED TO THIS EXCHANGE, ULTIMATELY INVOLVING THE MODERATOR.

>> I THINK IT IS INTERESTING THE PRESIDENT JUST SAID SOMETHING THAT IS ON THE DAY AFTER THE ATTACK, HE WENT IN THE ROSE GARDEN AND SAID THIS WAS AN ACT OF TERROR. YOU SAID IN THE ROSE GARDEN, THE DAY AFTER THE ATTACK, IT WAS AN ACT OF TERROR. IT WAS NOT A SNTANEOUS DEMONSTRATION. I WANT TO MAKE SURE WE GET THAT FOR THE RECORD. BECAUSE IT TOOK THE PRESIDENT 14 DAYS BEFORE HE CALLED THE ATTACK IN BENGHAZI AN ACT OF TERRORISM.

>> President Obama: GET THE TRANSCRIPT.

>> HE DID, IN FACT, SIR. LET ME CALL THAT AN ACT OF TERRORISM.

>> President Obama: CAN YOU SAY THAT AGAIN.

>> HE DID CALL IT AN ACT OF TERROR. IT DID, AS WELL, TAKE TWO WEEKS OR SO FOR THE WHOLE IDEA OF THERE BEING A RIOT OUT THERE ABOUT THIS TAPE TO COME OUT. YOU'RE CORRECT ABOUT THAT.

>> Reporter: ACCORDING TO THE WHITE HOUSE TRANSCRIPT, MR. OBAMA SAID THE FOLLOWING ON SEPTEMBER 12th, "NO ACTS OF TERROR WILL EVER SHAKE THE RESOLVE OF THIS GREAT NATION, ALTER OUR CHARACTER OR ECLIPSE THE LIGHT OF THE VALUES WE STAND FOR." THE TWO WEEKS LATER REFERENCE WAS TO A STATEMENT BY WHITE HOUSE PRESS SECRETARY JAY CARNE. ON SEPTEMBER 26, HE SAID FOR THE FIRST TIME, "IT IS CERTAINLY THE PRESIDENT'S VIEW THAT IT WAS A TERRORIST ATTACK." AS CONTENTIOUS AS THE LIBYA DISCUSSION WAS LAST NIGHT, THE EXCHANGES OVER ENERGY POLICY PROVED EQUALLY SHARP. THE REPUBLICAN NOMINEE POINTED TO THE PRICE OF GASOLINE AS EVIDENCE OF PRESIDENTIAL FAILURE.

>> THE PROOF IF THE STRATEGY IS WORKING OR NOT IS WHAT THE PRICE IS THAT YOU'RE PAYING AT THE PUMP. IF YOU'RE PAYING LESS THAN YOU PAID A YEAR OR TWO AGO, THEN THE STRATEGY IS WORKING. BUT YOU'RE PAYING MORE. WHEN THE PRESIDENT OFFICE, THE PRICE HERE WAS ABOUT $1.86 A GALLON. NOW IT IS $4 A GALLON.

>> Reporter: BUT PRESIDENT OBAMA WARNED THAT PROMISES OF LOWER GAS PRICES ARE NOT RISK-FREE.

>> President Obama: THE GOVERNOR SAID WHEN I TOOK OFFICE, THE PRICE OF GASOLINE WAS $1.80, WHY IS THAT? BECAUSE THE ECONOMY WAS ON THE VIRGE OF COLLAPSE. BECAUSE WE WERE ABOUT TO GO THROUGH THE WORST RECESSION SINCE THE GREAT DEPRESSION. AS A CONSEQUENCE, OF SOME OF THE SAME POLICIES GOVERNOR ROMNEY IS NOW PROMOTING. IT IS CONCEIVABLE THAT GOVERNOR ROMNEY COULD BRING DOWN GAS PRICES, BECAUSE WITH HIS POLICIES, WE COULD BE BACK IN THE SAME MESS.

>> Reporter: ONE OF THOSE WATCHING THAT BACK AND FORTH, AS WELL AS THE ARGUMENT OF DRILLING ON FEDERAL LAND WAS JULIA ALPRIN, WITH THE "WASHINGTON POST."

>> OBAMA MADE A LEGITIMATE POINT THAT WE WERE IN THE DEPTHS OF RECESSION, WHICH LED TO A LOWER GAS PRICE.

>> Reporter: AND SHE SAID ROMNEY'S CHARGE THAT THE PRICE FELL DURING THE PRESIDENTS TENURE, BUT THAT DURING THE OIL SPILL.

>> THE FIRST THREE YEARS OF THE OBAMA HAS SEEN AN INCREASE IN THE OIL PRODUCTION SINCE THE BUSH ADMINISTRATION. 13% IN TERMS OF OIL PRODUCTION, AND 6% IN TERMS OF NATURAL GAS PRODUCTION. SO THERE ACTUALLY HAS NOT BE A FALLOFF DURING THE COURSE OF HIS ADMINISTRATION. IT IS TRUE, THE ROMNEY ADMINISTRATION, IF ELECTED, WOULD PURSUE POLICIES THAT ARE MORE BELIEVE FAVORABLE TO OIL AND GAS COMPANIES AND COULD OPEN UP AREAS OF PRODUCTION THAT THE OBAMA ADMINISTRATION CLOSED OFF. YOU COULD SEE AN OIL AND GAS CONSTRUCTION IN THE UNITED STATES. WHETHER THAT WOULD SHIFT THE PRICE AT THE PUMP REMAINS UNCLEAR.

>> Reporter: ON ANOTHER ISSUE, TAX CUTS, THE TWO MEN ALSO PRESENTED SHARPLY COMPETING IDEAS. GOVERNOR ROMNEY INSISTED HE CAN CUT MARGINAL TAX RATES ACROSS THE BOARD BY 20%, AND LIMITING SOME LOOPHOLES THAT WOULD BE BENEFIT NEUTRAL.

>> WHY AM I LOWERING TAXES IN THE MIDDLE CLASS? BECAUSE UNDER THE LAST FOUR YEARS THEY HAVE BEEN BURIED. AND I WILL NOT, I WILL NOT, UNDER ANY CIRCUMSTANCES, REDUCE THE SHARE THAT IS BEING PAID BY THE HIGHEST INCOME TAXPAYERS. AND I WILL NOT, UNDER ANY CIRCUMSTANCES, INCREASE TAXES OF THE MIDDLE CLASS. THE PRESIDENT'S SPENDING, THE PRESIDENT'S BORROWING, WILL CAUSE THIS NATION TO HAVE TO RAISE TAXES ON THE AMERICAN PEOPLE. NOT JUST AT THE HIGH END.

>> Reporter: BUT THE PRESIDENT POINTED TO ANALYSES THAT FOUND ROMNEY'S INITIAL TAX PROPOSALS COULD COST NEARLY 5 TRILLION-DOLLAR OVER 10 YEARS, THAT DID NOT TAKE INTO ACCOUNT $2 TRILLION MORE FROM SPENDING AND OTHER TAX PROPOSALS.

>> President Obama: GOVERNOR ROMNEY WAS A VERY SUCCESSFUL INVESTOR. IF BE SOMEBODY CAME TO YOU WITH A PLAN THAT SAID, HERE, I WANT TO SPEND 7- OR $8 TRILLION, AND WE'RE GOING TO PAY FOR IT, BUT WE CAN'T TELL YOU UNTIL AFTER THE ELECTION HOW WE'RE GOING TO DO IT, YOU WOULDN'T HAVE TAKEN SUCH A SKETCHY PEOPLE, AND NEITHER SHOULD YOU, THE AMERICAN PEOPLE, BECAUSE THE MATH DOESN'T ADD UP.

>> Reporter: TODAY WE CAUGHT UP WITH DONALD MARIN, AN AUTHOR OF ONE OF THE ANALYSES QUOTED BY THE PRESIDENT AND OTHERS.

>> GOVERNOR ROMNEY HAS LAID OUT FOUR TO FIVE DIFFERENT PRINCIPLES IN HIS TAX REFORM. WHAT OUR STUDY CONCLUDES IS IT IS NOT POSSIBLE TO ACCOMPLISH ALL OF THEM. IF HE IS GOING TO RAISE TAXES ON CAPTAIN GAINS AND BUSINESSES, IT MAY BE POSSIBLE. BUT THAT'S WHY WE HAVEN'T SEEN ONE.

>> Reporter: FOR HIS PART, GOVERNOR ROMNEY SAYS THERE ARE SIX STUDIES THAT SHOW HE CAN FULFILL HIS TAX CUT PLEDGES. BUT WHILE SOME OF THE ANALOGIES SUGGEST THAT ROMNEY'S PLANS MIGHT BE PLAUSIBLE, UNDER CERTAIN CONDITIONS NOT ACKNOWLEDGED BY THE GOVERNOR, FOUR ARE OP-ED POSTS WRITTEN BY CONSERVATIVE ECONOMISTS.

>> Woodruff: YOU CAN WATCH THE ENTIRE DEBATE ON OUR HOME PAGE.

>> Ifill: YOU CAN WATCH THE ENTIRE DEBATE ON OUR HOME PAGE, OR, IF YOU CHOOSE, EIGHT MINUTES OF HIGHLIGHTS. WE POSTED THE MOST MEMORABLE EXCHANGES TO GIVE YOU A CHANCE TO VOTE ON HOW THE CANDIDATES PERFORMED. PLUS, YOU CAN WATCH OUR AFTERHOURS LIVESTREAM CONVERSATION, WHERE POLITICAL EDITOR CHRISTINA BELLANTONI AND HARI SREENIVASAN ANSWERED THE QUESTIONS YOU ASKED ON TWITTER AND FACEBOOK.

>> Woodruff: BESIDES JOUSTING OVER DOMESTIC POLICY ISSUES AND LIBYA LAST NIGHT, THE CANDIDATES ALSO ZEROED IN ON CHINA. JEFFREY BROWN REPORTS.

>> I'LL CRACK DOWN ON CHINA. PRESIDENT BUSH DIDN'T.

>> President Obama: GOVERNOR ROMNEY INVESTED IN COMPANIES THAT WERE PIONEER OF OUTSOURCING TO CHINA.

>> Brown: AGAIN AND AGAIN LAST NIGHT, CHINA WAS A FOCUS OF THE TWO CANDIDATES, AS THEY TRADED ACCUSATIONS OVER ALLEGED UNFAIR PRACTICES BY THE WORLD'S SECOND- LARGEST ECONOMY, AND OVER WHAT CAN OR SHOULD BE DONE TO PRESERVE AMERICAN JOBS. MITT ROMNEY REPEATEDLY ACCUSED CHINA OF KEEPING ITS CURRENCY ARTIFICIALLY LOW, TO MAKE ITS EXPORTS MORE COMPETITIVE.

>> CHINA HAS BEEN A CURRENCY MANIPULATOR FOR YEARS AND YEARS AND YEARS. AND THE PRESIDENT HAS A REGULAR OPPORTUNITY TO LABEL THEM AS A CURRENCY MANIPULATOR, BUT REFUSES TO DO SO. ON DAY ONE, I WILL LABEL CHINA A CURRENCY MANIPULATOR, WHICH WILL ALLOW ME, AS PRESIDENT, TO BE ABLE TO PUT IN PLACE, IF NECESSARY, TARIFFS.

>> Brown: PRESIDENT OBAMA COUNTERED THAT HIS ADMINISTRATION HAS BEEN TOUGH ON THIS ISSUE, TOO.

>> AND AS FAR AS CURRENCY MANIPULATION, THE CURRENCY'S ACTUALLY GONE UP 11% SINCE I'VE BEEN PRESIDENT BECAUSE WE HAVE PUSHED THEM HARD.

>> Brown: BOTH CANDIDATES POINTED TO THE LOSS OF AMERICAN JOBS TO CHEAPER CHINESE LABOR. THE PRESIDENT TOUTED HIS 2009 IMPOSITION OF TARIFFS ON LOW- PRICED CHINESE TIRES.

>> WHEN I SAID THAT WE HAD TO MAKE SURE THAT CHINA WAS NOT FLOODING OUR DOMESTIC MARKET WITH CHEAP TIRES, GOVERNOR ROMNEY SAID I WAS BEING PROTECTIONIST, THAT IT WOULDN'T BE HELPFUL TO AMERICAN WORKERS. WELL, IN FACT WE SAVED A THOUSAND JOBS.

>> Brown: GOVERNOR ROMNEY SAID MORE NEEDS TO BE DONE.

>> THE PLACE WHERE WE'VE SEEN MANUFACTURING GO HAS BEEN CHINA. CHINA IS NOW THE LARGEST MANUFACTURER IN THE WORLD. IT USED TO BE THE UNITED STATES OF AMERICA. A LOT OF GOOD PEOPLE HAVE LOST JOBS. THAT'S TOTAL OVER THE LAST FOUR YEARS.

>> Brown: IT'S A THEME BOTH HAVE HIT HARD IN ADS. THE OBAMA CAMPAIGN HAS ALSO ATTACKED ROMNEY FOR INVESTING IN COMPANIES THAT SENT JOBS TO CHINA WHILE HE WAS BAIN CAPITAL, AND FOR INVESTING IN CHINESE COMPANIES THEMSELVES.

>> EVEN TODAY, PART OF ROMNEY'S FORTUNE IS INVESTED IN CHINA.

>> Brown: LAST NIGHT THE PRESIDENT AGAIN MADE THAT POINT, LEADING HIS OPPONENT TO ASK THE PRESIDENT WHERE HIS INVESTMENTS GO.

>> ANY INVESTMENTS I HAVE OVER THE LAST EIGHT YEARS HAVE BEEN MANAGED BY A BLIND TRUST. AND I UNDERSTAND THEY DO INCLUDE INVESTMENTS OUTSIDE THE UNITED STATES, INCLUDING IN CHINESE COMPANIES. MR. PRESIDENT, HAVE YOU LOOKED AT YOUR PENSION? HAVE YOU LOOKED AT YOUR PENSION?

>> Brown: THE PUNCHING-BAG TONE OF THE DEBATE DID NOT SIT WELL IN CHINA. TODAY THE STATE-RUN NEWS AGENCY ISSUED A STATEMENT SAYING: "THE PRESIDENTIAL CAMPAIGN REFLECTS AN ALARMING SCENARIO IN WHICH CHINA-BASHING HAS BECOME A RITUAL. THIS RITUAL, HOWEVER, NEGATIVELY IMPACTS CHINA-U.S. RELATIONS AND LEAVES AMERICANS WITH THE IMPRESSION THAT CHINA IS RESPONSIBLE FOR THEIR COUNTRY'S DECLINE." AND A FOREIGN MINISTRY SPOKESMAN DENIED HIS COUNTRY MANIPULATES EXCHANGE RATES, AND SAID HE HOPED THE ELECTION CAMPAIGN WOULD NOT HARM CHINA-U.S. RELATIONS. TWO VIEWS NOW. KENNETH LIEBERTHAL WAS SENIOR DIRECTOR FOR ASIA ON THE NATIONAL SECURITY COUNCIL STAFF IN THE CLINTON ADMINISTRATION. HE'S NOW A SENIOR FELLOW AT THE BROOKINGS INSTITUTION FOCUSING ON CHINA. AND GORDON CHANG WROTE "THE COMING COLLAPSE OF CHINA." HE WAS A LAWYER IN CHINA AND HONG KONG FOR 20 YEARS, AND NOW CONTRIBUTES TO FORBES.COM.

>> GORDON AND CHANG, LET'S JUMP INTO ONE OF THE ISSUES. MITT ROMNEY SAYS HE WILL BRAND CHINA A CURRENCY MANIPULATOR ON DAY ONE. WHAT DOES THAT MEAN TO BE A MANIPULATOR, AND IS IT A GOOD IDEA TO BRAND THEM ONE?

>> IT CERTAINLY IS A GOOD IDEA TO DO SO BECAUSE U.S. LAW REQUIRES THE TREASURY TO BRAND A COUNTRY A CURRENCY MANIPULATOR IF IT MANIPULATES ITS CURRENCY TO GAIN AN ADVANTAGE. EVERY DAY THE CHINA CENTRAL BANK INTERVENES IN THE BUSINESS. IN SEPTEMBER, 2010, IN NEW YORK CITY, THE PREMIER AND CHINA'S ECONOMIC CZAR SAID CHINA KEEPS ITS CURRENCY LOW IN ORDER TO GIVE A TRADE ADVANTAGE TO ITS MANUFACTURERRERS. MANUFACTURERS. WE SHOULD BRAND IT AS A CURRENCY MANIPULATOR.

>> YOU HEARD THE PRESIDENT SAY THE CURRENCY HAS DEPRECIATED?

>> I THINK IT IS A SERIOUS PROBLEM TO BRAND THEM A CURRENCY MANIPULATOR. A LOT OF COUNTRIES INTERVENE TO AFFECT THE VALUE OF THEIR CURRENCY. JAPAN HAS MANY TIMES, AND SO HAS MANY OTHERS. WE HAVEN'T BRANDED ANY OF THEM A CURRENCY MANIPULATOR EVER. SECONDLY, THE CHINESE CURRENCY IS WHAT THE MARKET PRICE WOULD BE. YOU SEE THAT REFLECTED IN CHINA'S CURRENT ACCOUNT BALANCE. THE BOTTOM LINE IS THE CURRENT ACCOUNT BALANCE IS WELL WITHIN THE STANDARDS THAT WE, OURSELVES, HAVE ADVOCATED, SAYING IF IT IS WITHIN THOSE STANDARDS IT REALLY IS NOT A BIG PROBLEM. THE OBAMA ADMINISTRATION HAS PRESSURED CHINA FROM THE START ON CURRENCY VALUES. THEY ARE NOW CLOSE TO THE MARKET RATE. BUT THE ISSUE IS TWO-FOLD: ONE, CURRENCY VALUE IS NOT, BY ANY MEANS, THE BIGGEST ISSUE IN U.S./CHINA TRADE RELATIONS. SO IT DIVERTS ATTENTION FROM THE BIG ISSUES. AND SECONDLY, TO BRAND THEM A MANIPULATOR, WOULD BE TO SINGLE THEM OUT IN A WAY THAT WOULD START OFF THE NEXT ADMINISTRATION ON A VERY BAD FOOT AND RISK A TRADE WAR.

>> Reporter: WHEN IT COMES TO GETTING TOUGH, TALKING TOUGH, GETTING TOUGH, WHETHER IT IS CURRENCY OR ON OTHER TRADE ISSUES, WHAT IS THE BEST APPROACH. WHAT HAS BEEN THE MOST EFFECTIVE? YOU HEARD THE PRESIDENT TALK ABOUT A TARIFF ON TIRES. CHINA PUSHED BACK. AND THERE WAS AN ARGUMENT PRICES FOR U.S. CONSUMERS GOES UP WHEN WE DO THAT. WHAT IS THE MOST EFFECTIVE WAY TO BE TOUGH?

>> I THINK THE BEST THING WE CAN DO, AT LEAST THE FIRST THING WE SHOULD DO IS ENFORCE OUR OWN LAW. BECAUSE IF WE DON'T DO THAT, IT SENDS A SIGNAL TO CHINA. OF COURSE, I AGREE WITH KEN, THERE ARE A LOT OF MORE IMPORTANT THINGS WE NEED TO TALK TO CHINA ABOUT IN TERMS OF TRADE AND INVESTMENT AND COMMERCE. BUT IF WE'RE NOT WILLING TO ENFORCE OUR OWN LAW, THE CHINESE WILL BECOME MORE INTRANSIGENT ON THOSE ISSUES. AND ALTHOUGH CHINA'S SURPLUS HAS COME DOWN, IT DOESN'T MEAN CHINA'S CURRENCY HAS REACHED AN ECOEQUILIBRIUM. JUST BECAUSE THERE IS A SLIGHT ALTERATION DOESN'T MEAN IT IS MANIPULATED. CHINA COULD SOLVE THIS BY ALLOWING THE CURRENCY TO FLOAT. AND WE WOULDN'T NEED TO TALK ABOUT THAT.

>> SO, KENNETH LIEBERTHAL, WHERE DO WE START? YOU HEARD THEM BOTH TALKING TOUGH LAST NIGHT. WHAT IS THE BEST APPROACH TO DO WITHOUT, AS YOU SAID, ON THE CURRENCY MANIPULATION SITUATION WITHOUT ENDANGERING THE SITUATION.

>> FIRST OF ALL, YOU HAVE TO KEEP IN MIND OUR RELATIONSHIP WITH CHINA IS EXTRAORDINARILY WIDE RANGE, SURROUNDING NORTH KOREAN WEAPONS, TERRITORIAL ISSUES IN EAST ASIA --

>> THINGS THAT WEREN'T TALKED ABOUT LAST NIGHT?

>> EXACTLY. BUT THE PRESIDENT DOESN'T HAVE THE OPTION TO ACT ON ONE ISSUE, LIKE CURRENCY, AND NEGLECTING WHAT THAT DOES TO GET CHINA'S COOPERATION ON THE NEXT U.N. POSITION ON IRAN WEAPONS. I THINK THIS ADMINISTRATION HAS DONE A VERY SOLID JOB IN TERMS OF ENGAGING THE CHINESE, AND PRIVATELY BEING VERY TOUGH WITH THEM. I KNOW ON ECONOMIC TRADE ISSUES, HE IS LIVID ON MANY OF THE THINGS CHINA DOES. BUT HE HAS TRIED TO KEEP THEM ON BOARD FOR OTHER THINGS THAT ARE EXTREMELY IMPORTANT TO THE AMERICAN PEOPLE. SO THIS IS A BALANCE AND IT'S A PROCESS. THERE IS NO ON-OFF SWITCH.

>> GORDON CHANG, WHAT ABOUT THAT INVESTMENT EXCHANGE WE HEARD ABOUT? THE PRESIDENT, ON THE ONE HAND, SEEMS TO BE ACCUSING MITT ROMNEY OF HYPOCRISY, I GUESS, ABOUT HIS INVESTMENTS AS A MEMBER OF BAIN, AND THEN ROMNEY TURNS BACK TO THE PRESIDENT AND SAYS, HAVE YOU LOOKED AT YOUR PENSION? WHERE ARE YOU INVESTING?

>> I THINK THERE ARE CERTAINLY DIFFERENT INCENTIVES FOR A PERSON WHO IS A CHIEF EXECUTIVE OF AN INVESTMENT COMPANY, AND THE INCENTIVES THAT APPLIES TO THE LEADER OF THE FREE WORLD. YES, OF COURSE, MITT ROMNEY, WHEN HE WAS CHAIRMAN OF BAIN, DID CERTAIN THINGS THAT ARE NOW SOMEWHAT EMBARRASSING TO HIM IN THIS PRESIDENTIAL CAMPAIGN, BUT I DON'T THINK THEY REALLY SPEAK TO HOW HE WOULD GOVERNOR AS PRESIDENT. I THINK THE NEXT PRESIDENT, WHETHER IT IS THE GOVERNOR OR IT IS PRESIDENT OBAMA, IS GOING TO BE ACTING UNDER CERTAIN INCENTIVES, AND CERTAINLY THEY'RE GOING TO BE QUITE DIFFERENT. THE CHINESE, DESPITE ALL OF THE PRESSURE THAT PRESIDENT OBAMA HAS PUT ON THEM IN THE LAST FOUR YEARS, THEY HAVE GOTTEN WORSE ON A RANGE OF ISSUES, BOTH POLITICAL AND TRADE. SO WE DO NEED A NEW APPROACH, AND WE NEED TO TALK TO THE CHINESE ABOUT THREE PROLIFERATION OF NUCLEAR WEAPONS TECHNOLOGY TO IRAN, JUST AS WE NEED TO TALK TO THEM ABOUT CURRENCY MANIPULATION.

>> AND THE LARGER QUESTION IS WHY IS CHINA SO MUCH A FOCUS AT A MOMENT LIKE THIS IN A CAMPAIGN? AND IS IT A HEALTHY RELATIONSHIP OR -- I SAW ONE CHARACTERIZATION THAT THEY HAVE SIMPLISTIC RHETORIC FOR THIS RELATIONSHIP WE HAVE.

>> THERE IS A LONG POLITICAL RELATIONS, DATING BACK TO THE END OF THE 1970s, THAT THE CHALLENGER TO AN INCUMBENT FOR THE PRESIDENCY ALMOST ALWAYS RAISES THE CHINA ISSUE, AND SAYS THE INCUMBENT HAS BEEN TOO SOFT ON CHINA. WHEN HE COMES IN, HE WILL SHOW THEM THERE IS A NEW SHERIFF IN TOWN AND THEY BETTER SHAPE UP.

>> AND WHAT HAPPENS IF HE COMES INTO OFFICE?

>> IF HE ACTS ON HIS RHETORIC, YOU GET OFF TO A ROCKY START. OVER A PERIOD OF TIME -- FOR PRESIDENT CLINTON, IT TWO THREE YEARS, AND FOR PRESIDENT REAGAN, A LITTLE SHORTER. BUT THEY COME TO REALIZE THEIR PREDECESSOR'S POLICIES WERE NOT SO BAD AFTER ALL. THEY INCH BACK TO WHERE THEY TAKE THEM OVER AND THEY BUILD ON THEM. AND THE REASON FOR THAT IS THIS RELATIONSHIP AFFECTS TOO MANY U.S. INTERESTS TO ALLOW RHETORIC AND KIND OF POLITICAL ONE UPSMANSHIP TO GUIDE WHAT YOU ARE DOING.

>> GORD CHANG AND KENNETH LIEBERTHAL, THANK YOU VERY MUCH.

>> THANK YOU.

>> THANK YOU.

>> Ifill: NEXT, WE BEGIN A SERIES WE'RE CALLING "AGENTS FOR CHANGE," A LOOK AT PEOPLE AROUND THE WORLD WORKING TO IMPROVE THE LIVES OF OTHERS. IN OUR FIRST STORY, SPECIAL CORRESPONDENT FRED DE SAM LAZARO TRAVELS TO THE PHILIPPINES. THAT'S WHERE ONE GROUP IS TRYING TO RESCUE GIRLS WHO-- LACKING JOBS AND INCOME-- BECOME PRIME TARGETS FOR HUMAN TRAFFICKING.

>> ABOUT 11 MILLION FILIPINOS, MORE THAN 10% OF THIS COUNTRY'S ENTIRE POPULATION, WORKS OVERSEAS. EVERYTHING FROM DOCTORS AND NURSES, MANY IN THE UNITED STATES, TO SUBSTANTIAL NUMBERS OF FEMALE DOMESTIC WORKERS WHO GO TO OTHER PARTS OF ASIA, AND ESPECIALLY TO THE PERSIAN GULF AND ARAB COUNTRIES.

>> THEY GO BECAUSE JOBS ARE IN SHORT SUPPLY, AND THOSE THAT ARE AVAILABLE PAY VERY LITTLE. A HOUSE MAID IN HONG KONG OR DU DUBAI EARNS MORE THAN A COLLEGE GRADUATE. 50% OF THE GROSS DOMESTIC PRODUCT COMES FROM MONEY SENT HOME BY OVERSEAS FILIPINOS. BUT THERE IS A DARK DOWNSIDE THAT MAKES THESE MIGRANTS VULNERABLE.

>> THE PHILIPPINES AS A MIGRANT COUNTRY IS VULNERABLE TO HUMAN TRAFFICKING.

>> Reporter: CECILIA, WHO FOUNDED THE FOUNDATION FOR THE LARGEST ANTITRAFFICKING GROUP, SA IT OFTEN BEGINS IN AREAS LIKE THIS MANILA SLUM.

>> THIS IS FERTILE GROUND TO LURE GIRLS INTO HUMAN TRAFFICKING. THEY PROMISE GOOD JOBS, AND THEY GIVE PEOPLE HOPE AND ASPIRATIONS OF THE POOR PEOPLE. AND SOMETIMES THEY EVEN GIVE AN INCENTIVE, AND THEY PUT SOME RESOURCES UP FRONT.

>> O IA GREW UP IN POVERTY AND WORKED AS A CHILD. LATER SHE JOINED THE RESISTANCE TO FERDINAND MARCOS AND WAS IMPRISONED. THEY PROVIDED REFUGE FOR TRAFFICKING PEOPLE OF ALL AGES AND CIRCUMSTANCESS FROM PROSTITUTION TO OTHER FORMS OF FORCED LABOR.

>> SOME WERE ARRESTED FROM BROTHELS. A LOT OF THESE GIRLS ARE ACTUALLY UNDERAGE FOR TRAFFICKERS, AND THEIR FAMILIES ARE HARASSED.

>> Reporter: THIS IS ONE OF THE FORUM'S SEVEN FACILITIES ACROSS THE PHILIPPINES, SUPPORTED BY VARIES INTERNATIONAL GOVERNMENTS AND FOUNDATION DONORS. THE YOUNG WOMEN ARE GIVEN EXTENSIVE PSYCHOTHERAPY, AND UNITED WITH FAMILY, WHEN POSSIBLE, OR GIVEN JOB TRAINING. PARADOXICALLY, MANY USE THEIR JOB TRAINING AS A TICKET OUT OF THE COUNTRY. THE ONLY WAY MANY SEE TO A BETTER LIFE.

>> MY FAMILY DOESN'T HAVE ANYTHING HERE IN THE PHILIPPINES. MY MOTHER DOESN'T HAVE A JOB. MY FATHER DOESN'T HAVE ONE. WE ARE SIX SIBLINGS IN THE FAMILY.

>> I WANT TO SEND MY SIBLINGS TO SCHOOL, AND I WANTED TO HELP MY MOTHER BECAUSE SHE IS THE ONLY ONE TAKING CARE OF US NOW BECAUSE MY FATHER IS DEAD.

>> Reporter: THESE WOMEN JUST RETURNED FROM SYRIA. THEIR WORK CUT SHORT, NOT JUST BY THE POLITICAL SITUATION THERE, BUT ALSO BY ABUSE.

>> I WAS PHYSICALLY ABUSED, AND THEY DIDN'T PAY ME. I WASN'T PAID FOR ONE YEAR AND SIX MONTHS. I WAS THERE FOR TWO YEARS AND ONE MONTH, BUT THEN THE SITUATION IN SYRIA BECAME WORSE, AND I WAS ALSO AFRAID FOR MY OWN SAFETY GIVEN THE SITUATION. THEY WOULD HANG ME, SO I DECIDED TO ESCAPE.

>> Reporter: AGNES NEARLY DIED FLEEING EMPLOYERS WHO ARE ANGERED BECAUSE THE CHILD SHE WAS CARING FOR WAS BRUISED IN A PLAYGROUND ACCIDENT, SHE SAYS.

>> THERE WAS A FIRE ESCAPE, SO I USED IT TO ESCAPE FROM MY EMPLOYER'S HOUSE. AND I WENT DOWN TO THE THIRD FLOOR, AND ACCIDENTALLY FELL FROM THERE TO THE GROUND FLOOR.

>> Reporter: SHE HAS A BROKEN JAW. STORIES OF ABUSE AND UNPAID WAGES ARE SO WIDESPREAD THAT THE PHILIPPINE GOVERNMENT HAS EVEN CONSIDERED BARRING ITS CITIZENS AS WORKING AS DOMESTICS IN SOME COUNTRIES. TO PREVENT MORE WOMEN FROM FALLING PREY, THE FORUM WORKS WITH THE NATIONAL BUREAU OF INVESTIGATION TO CONDUCT UNDERCOVER STINGS THAT HAVE BEEN ENCOURAGED BY THE GOVERNMENT OF ACQUINO, WHICH IS PLEDGED TO CRACK DOWN ON THESE ILLICIT RECRUITERS. ON THIS STING, THE ALLEGED TRAFFICKER WAS TO BE GIVEN THE EQUIVALENT OF $1500 AND UP FRONT FEES, ALL IN UNMASHED BILLS. PICTURES WERE ENCLOSED OF WOMEN APPLYING FOR SUPPOSEDLY WAITRESS JOBS IN THE NATION OF PALAU. SOME OF THE WOMEN WHO EVENTUALLY WENT THERE, INSTEAD OF BEING WAITRESSES, THEY WERE FORCED TO SIT WITH COSTUMERS, HAVE A DRINK WITH THEM, AND SOMETIMES FORCED TO GO OUT WITH THEM FOR SEXUAL THINGS.

>> IN OTHER WORDS, THEY WERE PROSTITUTED.

>> Reporter: WERE YOU NERVOUS?

>> ONLY BECAUSE IT IS MY FIRST TIME.

>> Reporter: MICHELLE RAMOS OF THE SCIENCE FORUM SOCIAL WORKER WAS ONE OF THE THREE WOMEN POSING AS JOB APPLICANTS. THE TWO OTHERS WERE DETECTIVES.

>> SO WE ARE EXPECTING YOU IN THIS AREA.

>> Reporter: THE POLICE HAVE ASKED YOU TO JUST WAIT HERE?

>> YES. YES.

>> Reporter: THEY'RE IN THE AREA TO MAKE SURE?

>> TO CHECK THE AREA AND SECURE IT.

>> Reporter: 30 MINUTES LATER, THERE WAS WORD FROM THE UNDERCOVER DECOYS.

>> AS OF NOW, THERE I THERE IS E FILING OF THE FORMS. THE STAGE IS READY FOR THEM TO PAY THE MONEY.

>> Reporter: ANOTHER TEXT FOLLOWED. THE SUSPECT HAD ACCEPTED PAYMENT, ACTUAL PROOF THAT A CRIME HAD BEEN COMMITTED. OIA BANDA AND COUNSELLORS FOLLOWED ON THE HEELS OF THE LAW ENFORCEMENT OFFICERS. DETECTIVES COLLECTED EVIDENCE AND QUESTIONED THE ALLEGED TRAFFICKER. [SPEAKING A FOREIGN LANGUAGE]

>> Reporter: BANDA A SAT WITH A FANNED FULSATWITH A HANDD YOUNG WOMEN WHO WERE EXPECTING TO LEAVE FOR PALAU.

>> THEY WERE EXPECTING TO LEAVE.

>> Reporter: THE JOB IS TO SEE THAT THE CHILD IS AVAILABLE. AT HEADQUARTERS THE ALLEGED TRAFFICKER AND A PARTNER WERE BOOKED. IT QUICKLY BECAME CLEAR FROM DOSSIERS OF DOZENS, PERHAPS HUNDREDS OF JOB APPLICANTS, THAT THIS WAS A BIG CATCH. JORDAN, PALAU, PALAU AGAIN.

>> Reporter: TRAFFICKING IS A NOT BAIL-ABLE OFFENSE THAT CARRIES A LIFE SENTENCE. WHETHER IT IS A DETERRENT, THOUGH IS AN OPEN QUESTION, IN A JUSTICE SYSTEM EXPERTS SAY IS PLAGUED BY CORRUPTION. JERONIMO IS A PROSECUTORS. HE PROSECUTES THE PROSECUTOR, WHO JUDGES THE JUDGE. WHO POLICES THE CORRUPT MEDIA WHEN EVERYBODY IS IN KAHOOTS. IT IS A MAJOR CHALLENGE.

>> Reporter: PRESIDENT ACQUINO HAS ARRESTED SOME HIGH-LEVEL OFFICIALS, AND HE HAS INSTRUCTED SOME OFFICIALS LIKE SEE TO UPGRADE THE LAWS TO BE MORE EFFECTIVE AGAINST ORGANIZED CRIME.

>> SINCE WE RETURNED FROM THE PHILIPPINES, THEY, THEMSELVES HAVE COME UNDER SUSPENSION. A MAJOR DONOR FILED A COMPLAINT, ALLEGING I IMPROPRIETIES. AS THE CASE PROCEEDS TO COURT, SHE HAS VOWED TO CONTINUE THE WORK OF HER AGENCY, WHICH SERVES THOUSANDS OF TRAFFICKING VICTIMS.

>> Reporter: IRONICALLY, SOME OF THEM, LIKE JENNY, JUST BACK FROM SYRIA, SEE NO OTHER OPTION THAN TO TAKE THEIR CHANCES.

>> I JUST WANT TO START A NEW LIFE. I WILL NOT GIVE UP. I STILL WANT TO GO ABROAD BECAUSE I REALLY WANT TO HELP MY MOTHER AND HELP MY SIBLINGS TO FINISH THEIR EDUCATION.

>> Reporter: AND FOR THE FORESEEABLE FUTURE, BOTH HER FAMILY AND HER GOVERNMENT WILL CONTINUE TO DEPEND ON THE MONEY SHE AND MILLIONS OF OVERSEAS FILIPINOS SEND HOME.

>> AS YOU CAN SEE, WE BLURED SOME OF THE FACES TO PROTECT THE IDENTITIES OF SOME OF THE PEOPLE INVOLVED. FRED'S REPORTING IS A PARTNERSHIP WITH THE UNDERTOLD STORIES PROJECT AT ST. MARY'S UNIVERSITY IN MINNESOTA. HAVE QUESTIONS ABOUT HUMAN TRAFFICKING ABROAD AND HERE AT HOME? FRED DE SAM LAZARO AND A LAWYER WHO WORKS TO DEFEND VICTIMS WILL TAKE YOUR QUESTIONS ONLINE. WE'RE ALSO LAUNCHING A NEW SERIES FEATURING YOUNG ENTREPRENEURS CREATING JOBS AND IMPROVING LIVES IN THEIR COMMUNITIES. SEE A LIST OF TEN "AGENTS FOR CHANGE" AND ADD YOUR SUGGESTIONS FOR OUR NEXT PROFILES. THAT'S ALL ON OUR WEB SITE.

>> Woodruff: FINALLY TONIGHT, THE WORLD'S FASTEST SAILBOATS AND BEST SAILORS WILL COMPETE FOR THE AMERICA'S CUP TROPHY A YEAR FROM NOW. BUT THE HOST CITY OF SAN FRANCISCO IS ALREADY GEARING UP. NEWSHOUR CORRESPONDENT SPENCER MICHELS HAS OUR STORY.

>> EVER SINCE 1851, SAILORS AND WELL-HEELED SKIPPERS HAVE RACED THROUGH THE WATER IN EVER MORE EXPENSIVE, HIGH-TECH SAILBOATS, IN PER SUIT OF THE COVETED AMERICA'S CUP. SO THE VICTOR GO THE SPOILS IN 2010, ARI ELLISSON FROM ORACLE WON THE CUP FOR AMERICA. HIS PRIZE, BESIDES BRAGGING RIGHTS, WAS TO GET TO CHOOSE WHERE THE RACE WOULD BE HELD NEXT. HIS CHOICE WAS TO BRING THE CONTEST TO HIS HOME WATERS, SAN FRANCISCO BAY. HE CONCOCTED A SERIES OF RAG GATAS FROM ALL AROUND THE WORLD, WHERE COMPETING TEAMS FROM 11 COUNTRIES, DESIGNED TO BUILD ENTHUSIASM AND EXCITEMENT FOR THE MAIN EVENT. AMERICA'S CUP, 2013. WHERE 72-FOOT BOATS WILL PLOW THROUGH THE BAY. THE PRELIMINARY RACES FEATURED BOATS THAT MEASURED ABOUT 45-FEET LONG, WITH WING SAILS, AS DESCRIBED BY RACING ANNOUNCER ANDREI GREEN.

>> THEY'RE THE SAME SAILORS, THE SAME TEAMS, BUT THE BOATS ARE JUST A LITTLE SMALLER. IT IS ESSENTIALLY THEIR PRACTICE RACE. THIS IS JUST TO GET EVERYONE EXCITED AND PASSIONATE ABOUT THE SAILORS.

>> Reporter: IT IS GOING ON NOW, WITH THE SHOWDOWN NEXT YEAR, ARE THE FIRST TIME SPECTATORS CAN EASILY VIEW THE RACES FROM THE LAND. USUALLY THESE EVENTS ARE FAR ENOUGH OUT TO SEA THAT WATCHING THEM WAS MUCH EASIER FROM A BOAT, AND THAT LIMITED WHO COULD ATTEND. ANNOUNCER GREEN'S JOB IS TO CLUE THE AUDIENCE INTO WHAT IS GOING ON.

>> THE FORMAT OF THE AMERICA'S CUP HAS BEEN TWEAKED CONSIDERABLY OVER THE LAST TWO YEARS. BASICALLY VERY SIMPLE MATH. YOU CAN SEE THE BOATS RACING. YOU CAN SEE THEM RIGHT IN FRONT OF THE SHORE, AND IT IS VERY CLEAR WHO IS WINNING AND WHO IS LOSING.

>> Reporter: AND TO HELP GREEN AND TV VIEWERS, CUP OFFICIALS ARE EMPLOYING A GRAPHIC SYSTEM TO MAKE THE TELEVISED REGATTA RACES UNDERSTANDABLE, SOMEWHAT LIKE THE FIRST DOWN FOR THE BROADCAST OF FOOTBALL GAMES. ADAM FISHER WROTE ABOUT THIS SYSTEM FOR WIRE MAGAZINE.

>> THE TV COVERAGE IS CRYSTAL CLEAR. YOU KNOW WHO IS WINNING. A LOT OF PEOPLE LOOKING AT THE COVERAGE SEEM TO THINK THERE IS ACTUALLY A GUY EN THE WATER, IT IS SO LIFE-LIKE, BUT IT IS ALL DIGITAL.

>> Reporter: THE DESIGN OF THE 72-FOOT BOATS IS CONTINUOUSLY BEING TWEAKED, BUT NOBODY IS TALKING MUCH ABOUT DETAILS AS THE WORK GOES ON INSECURE LOCATIONS, LIKE THIS OLD SAN FRANCISCO PIER. BUT THE BEAUTY OF THE BOATS, BIG OR SMALL, IS ONLY PART OF THE STORY.

>> A SPECTACULAR AND GRACEFUL AS THESE BOATS ARE, THE PROCESS OF ARRANGING THESE IN SAN FRANCISCO WAS CLUMSY AND CONTENTIOUS.

>> Reporter: TO GET THE RACES, SAN FRANCISCO HAD TO AGREE TO ELLISON'S DEMANDS. THE CITY WAS EAGER TO GO ALONG BECAUSE AS AMERICA'S CUP C.E.O. STEVEN BARKLEY SAID, THE REWARDS IN JOBS AND MONEY WOULD BE SUBSTANTIAL.

>> THE AMERICA CUP COMES TO CITIES ALL ABOUT THE ECONOMICS. AND SAN FRANCISCO DID ITS OWN NUMBERS, AND THEY SAID IT WOULD BRING $1.4 BILLION OF ECONOMIC BENEFIT HERE AND 9,000 JOBS.

>> Reporter: BUT A DISAPPOINTED SAN FRANCISCO MAYOR ED LEE ANNOUNCED THAT THE AGREEMENT AND THE PROMISES OF MANY OF THOSE JOBS WAS GOING BY THE BOARD. AFTER CUP ORGANIZERS DECIDED THAT DEVELOPING THE PIER WOULD COST TOO MUCH. STILL, THE CITY AND ORACLE WENT AHEAD WITH RACE PLANS. OTHERS WERE RELEASED. THEY SAW THE ARRANGEMENT WITH ELLISON AS A GIVE AWAY OF CITY PROPERTY. AND OTHERS FEARED THE ENVIRONMENT CONSEQUENCES OF TOO MANY VISITORS AND NON-RECREATIONAL USES OF WATERFRONT LAND. AND THEN THERE WAS THE MATTER OF BOATS. THEY THOUGHT UP TO 15 72-FOOT BOATS COULD COMPETE, BUT THEY COST MILLIONS. AND IN THE MIDST OF A WORLDWIDE RECESSION, ONLY FOUR OF THEM, PLUS ELLISON'S DECIDED TO TAKE PART. NOBODY IS SUGGESTING THAT THE RACE WILL BE A BUST, BUT THE PROSPECTS FOR THE CITY AND THE CUP ITSELF IS NOT AS BRIGHT AS IT HAD BEEN.

>> THE EVENT IS GOING TO BE BIGGER AND BETTER THAN PREVIOUS GENERATIONS. HOWEVER, IN OTHER CITIES IN THE PAST, WHERE THE AMERICA'S CUP HAS TAKEN PLACE, THERE HAS BEEN A HUGE AMOUNT OF PROPERTY DEVELOPMENT ALONG THE WATERFRONT. KIND OF LIKE HOSTING AN OLYMPICS. THAT IS NOT GOING TO HAPPEN IN SAN FRANCISCO.

>> Reporter: STILL, FOR SAILING FANS AND SOME WHO ARE NOT, THE PROSPECTS OF INTERNATIONAL COMPETITION AND JUST THE CHANCE TO WATCH THE BIG BOATS GLIDE THROUGH THE FOG AND INTO THE WIND IS REASON ENOUGH TO SUPPORT THE RACE.

>> I LIKE TO SEE THEM HEEL UP.

>> Reporter: WHY?

>> IT IS EXCITING.

>> IT IS KIND OF GRACEFUL, THE WHOLE THING.

>> MAJESTIC.

>> Reporter: MAJESTIC?

>> SOME PEOPLE SAY WELL, WITH A LOT OF MONEY, YOU CAN MAKE IT MAJESTIC. THIS IS A RICH MAN'S SPORT.

>> THAT'S OKAY. I LOOK WATCHING THEM SAIL.

>> YEAH, IT IS. IT IS A RICH MAN'S SPORT.

>> Reporter: THE PRACTICE RACES IN THE 45-FOOT CATAMARANS CONTINUE ON AND OFF UNTIL MAY NEXT YEAR. FOLLOWED BY THE FINALS IN AMERICA'S CUP IN SEPTEMBER OF 2013, THE TIME OF YEAR WHEN THE FOG USUALLY LIFTS IN SAN FRANCISCO BAY.

>> AN UPDATE TO

>> Woodruff: AND AN UPDATE TO SPENCER'S STORY. YESTERDAY, "ORACLE'S" 72-FOOT CATAMARAN CAPSIZED IN A PRACTICE RUN ON SAN FRANCISCO BAY AND WAS SWEPT OUT TO SEA. NO ONE WAS HURT IN THE ACCIDENT, BUT A 13-FOOT WING SAIL ON THE MULTIMILLION-DOLLAR BOAT WAS DESTROYED.

>> Ifill: AGAIN, THE MAJOR DEVELOPMENTS OF THE DAY. PRESIDENT OBAMA AND MITT ROMNEY GOT BACK TO CAMPAIGNING AFTER LAST NIGHT'S COMBATIVE DEBATE. BOTH APPEALED TO WOMEN VOTERS IN SWING STATES. AND THE F.B.I. ARRESTED A BANGLADESHI MAN FOR ALLEGEDLY PLOTTING TO BLOW UP THE FEDERAL RESERVE BUILDING IN MANHATTAN. MILLIONS OF AMERICANS HAVE TUNED IN TO THE PRESIDENTIAL DEBATES. WE PROFILE ONE MAN WHO FIGURED OUT HOW TO PROFIT FROM THEM. HARI SREENIVASAN EXPLAINS.

>> Sreenivasan: HE'S A STUDENT AT M.I.T. ECONOMICS CORRESPONDENT PAUL SOLMAN ASKED HIM ABOUT HIS BETS AND HIS WINNINGS. READ HIS INTERVIEW ON OUR MAKING SENSE PAGE. AND NPR'S DEBBIE ELLIOTT TALKS TO INDEPENDENT VOTERS IN FLORIDA ABOUT THE DELUGE OF POLITICAL ADS THERE. THAT'S PART OF OUR PARTNERSHIP WITH NPR AND CMAG TO EXAMINE SPENDING ON CAMPAIGN ADS THIS YEAR. WATCH THE VIDEO REPORT ON THE RUNDOWN. ALL THAT AND MORE IS ON OUR WEB SITE, newshour.pbs.org. JUDY?

>> Woodruff: AND THAT'S THE NEWSHOUR FOR TONIGHT. ON THURSDAY, WE'LL LOOK AT BATTLEGROUND NEW HAMPSHIRE, WHERE WOMEN CANDIDATES ARE ON THE BALLOT IN THREE SEPARATE RACES. I'M JUDY WOODRUFF.

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