The NewsHour with Jim Lehrer

JIM LEHRER: Good evening. I`m Jim Lehrer.

On the NewsHour tonight: the news of this Thursday; then, a debate over whether the states or the federal government should set emission standards; a look at those things called earmarks in congressional spending bills; the launch of a two-part Paul Solman report on toxic toys; and a Charlayne Hunter-Gault update on the new leader of South Africa`s African National Congress.

(BREAK)

JIM LEHRER: President Bush fended off questions today about those destroyed CIA videos. The tapes, showing harsh interrogations of terror suspects, were destroyed by the CIA in 2005.

Today, Mr. Bush would not say what he thinks of that action. Instead, at a year-end news conference, he said he wants to see what the attorney general, the CIA inspector general, and Congress find out.

GEORGE W. BUSH, President of the United States: I am confident that the preliminary inquiry conducted by the AG and the IG of the CIA, coupled with the oversight provided by the Congress, will end up enabling us all to find out what exactly happened. And, therefore, over the course of these inquiries, oversight hearings, I`m going to reserve judgment until I find out the full facts.

JIM LEHRER: The president said again he did not know about the tapes until this month.

Separately, the CIA handed over relevant documents to the House Intelligence Committee. The panel threatened to subpoena CIA employees otherwise.

And Democrat John Conyers of Michigan convened the House Judiciary Committee, which plans its own investigation.

REP. JOHN CONYERS (D), Michigan: There are those that say, "Well, they`re gone now; there`s nothing we can do." Well, I wish I knew that with any particular certainty. I don`t know if there are any copies around.

There are certainly people who do know what went on and are still around, and there are those who`ve seen and know what was on these tapes. And that becomes another very important reason for our inquiry.

JIM LEHRER: Attorney General Mukasey has refused to provide Congress with details of his investigation on grounds it could become a criminal case.

New battles erupted today over greenhouse gases from vehicles. On Wednesday, the U.S. Environmental Protection Agency blocked California and 16 other states from forcing emission cuts.

Today, California Congressman Henry Waxman said his House Oversight Committee will investigate. He said the agency appears to have ignored the evidence and the law. But the president said today state action is not needed because the new energy law means there`s a national strategy. We`ll have more on this story right after the news summary.

The president also criticized Congress today for adding thousands of earmarks or pet projects to a catch-all spending bill. It totaled $555 billion, and Mr. Bush said it included about 9,800 earmarks. He said he`s asking Budget Director Jim Nussle to find ways to deal with the spending. We`ll have more on this story later in the program tonight.

In Iraq today, a suicide bomber killed one U.S. soldier and up to 14 Iraqis outside a city council meeting. It happened north of Baghdad. That made 15 Americans killed so far in December. A total of 37 U.S. troops died in Iraq in the month of November.

The top prosecutor in South Africa announced today he`s close to charging Jacob Zuma with graft. Zuma was elected on Tuesday to lead the ruling African National Congress. That puts him next in line to be president. But the national prosecuting authority, NPA, said he could be charged early next year.

TLALI TLALI, National Prosecuting Authority Spokesman: In so far as all that investigation has been carried out, enough ground has been covered to a point where information suggests or evidence is to the effect that there is a prosecutable case. However, the NPA is yet to make a decision in this regard; that decision is imminent; that decision has not been made.

JIM LEHRER: Zuma is under fire for allegedly accepting bribes from a French arms company in the 1990s. But he was defiant today, saying, "If I have a case to answer, then take me to court." We`ll have more on this story later in the program tonight.

A former driver for Osama bin Laden will face a U.S. military tribunal at Guantanamo Bay, Cuba. A military judge ruled yesterday that Salim Ahmed Hamdan is not a prisoner of war. The classification would have put him outside the tribunal`s jurisdiction. Today`s military announcement said the trial is scheduled for next March.

Police in New Orleans used chemical spray and stun guns today on housing protesters. Dozens of people tried to push into a city council meeting on demolishing 4,500 public housing units. One woman was sprayed with chemicals and dragged away.

The housing dispute centers on buildings damaged by Hurricane Katrina. The protesters say tearing them down will drive poor black residents from the city.

Congressman Tom Tancredo of Colorado dropped out of the Republican presidential race today. He announced it in Des Moines, Iowa, just two weeks before that state holds its nominating caucuses. Tancredo had focused his campaign on illegal immigration. He said he`s endorsing fellow Republican Mitt Romney for president.

On Wall Street today, the Dow Jones Industrial Average gained 38 points to close at 13,245. The Nasdaq rose more than 39 points to close well above 2,640.

And that`s it for the news summary tonight. Now: the states versus the feds on emission standards; the continuing power of the earmark; the dangers from toxic toys; and a new power in South Africa.

(BREAK)

JIM LEHRER: Who should regulate emissions? Margaret Warner has our story.

MARGARET WARNER: The Bush administration`s refusal to let states set their own auto emissions standards met with harsh criticism from state officials today.

Last night, the Environmental Protection Agency denied California`s two-year-old request for a waiver so it could impose carbon dioxide emission standards stricter than those in effect nationally.

The California plan would require a 30 percent reduction in car and light truck emissions by 2016. That would translate into a new overall vehicle mileage average of 36 miles per gallon.

At least 16 other states, with about 45 percent of the nation`s automobiles, had pledged to adopt California-like limits, as well, if the waiver were approved.

California Governor Arnold Schwarzenegger vowed to sue, saying, "It is disappointing that the federal government is standing in our way and ignoring the will of tens of millions of people across the nation. We will continue to fight this battle."

In his White House press conference this morning, the president defended the EPA`s decision, saying it made sense in the wake of a new energy bill approved this week.

GEORGE W. BUSH, President of the United States: The question is how to have an effective strategy. Is it more effective to let each state make a decision as to how to proceed in curbing greenhouse gases? Or is it more effective to have a national strategy?

Director Johnson made a decision based upon the fact that we passed a piece of legislation that enables us to have a national strategy. It`s one of the benefits of Congress passing this piece of legislation.

MARGARET WARNER: The energy bill signed by the president yesterday sets a 35-mile-per-gallon vehicle fuel standard by 2020. It also mandates a major increase in the production and use of biofuels, like ethanol.

The president said his national strategy to confront climate change also has a global dimension. His approach to the problem, beginning with his rejection of the Kyoto treaty, has often put the U.S. at odds with other nations.

But he cited progress made in last week`s summit in Bali, when the administration agreed to take part in two years of negotiations for a post- Kyoto agreement.

GEORGE W. BUSH: In order to be effective on a global basis, countries that emit greenhouse gases need to be at the table.

We could do all we wanted to do, but it wouldn`t affect greenhouse gases over the long run, unless a country like China had agreed to participate in a -- in a strategy.

And so we went to the Bali conference with that in mind and worked out a compromise that said we`re committed to a process that`s going to unfold over the next two years, but we`ve also got a parallel process working to make sure major emitters sit at the table.

MARGARET WARNER: The parallel track consists of U.S.-sponsored talks that include large developing countries that didn`t sign Kyoto, like China and India.

Now, two views of whether the states or the federal government should prevail in setting emission standards to try to curb global warming. Democrat Barbara Boxer of California chairs the Senate Committee on Environment and Public Works.

And Jeff Holmstead was assistant EPA administrator for air quality issues between 2001 and 2005. He`s now a partner at the Bracewell and Giuliani law firm, where his clients include utilities and refineries, renewable energy firms, and coal-fired power plants.

Welcome to you both.

Senator Boxer, we just heard President Bush saying that the new energy bill means there`s absolutely no need to have separate state standards. Does his argument make some sense, that it`s better to have a national strategy?

SEN. BARBARA BOXER (D), California: Well, the president is flat-out wrong about this, because we`ve always had fuel economy standards for a very long time. And still, under the Clean Air Act, California has been granted waivers 50 times, eight times by Ronald Reagan, 14 times by Jimmy Carter, seven times by George Bush`s dad.

So the fact is that this is the first time we`ve ever been denied. And the answer is that we`ve got global warming coming right at us. It`s a crisis.

We need the federal government to be involved, of course. But we also have to let the states be involved. And there`s not every state doing its own thing. There`s only one waiver, and then the states follow California.

And as I say, this has been done 50 times in the past. This is a shocking decision, and it is very bad for the environment, for the planet, for the people of our nation.

MARGARET WARNER: A shocking decision?

JEFFREY HOLMSTEAD, Bracewell and Giuliani Law Firm: Well, I don`t think it`s really shocking, and it`s not quite right to say that EPA has always granted waivers to California. And this waiver is just completely different from anything that`s ever been done before.

Congress has decided years ago that there should -- the presumption is there should be a uniform national emissions standard. And in order to have anything other than that, California needs to show that there are compelling and extraordinary conditions that exist.

And that`s always been understood to mean California has the worst air quality in the nation. If they need to do something to clean up their local air quality, then they should be able to do that.

That`s fundamentally different from climate change, where what`s emitted in Riverside or Los Angeles has no different impact on California than what`s emitted in Washington, D.C., or Shanghai.

So it really is very different from anything that`s ever been done before under the Clean Air Act.

MARGARET WARNER: What about that point, Senator? And the EPA administrator made this point to reporters last night in a conference call, that all the other waivers you`re talking about, that dealt with dirty air, essentially, pollution that affects residents of California.

But when you`re talking about greenhouse gas emissions or CO-2 emissions, you`re talking about a problem of climate change. You`re not going to improve the warming or slow warming in California by California having tighter standards.

SEN. BARBARA BOXER: Well, first, I have to say, Mr. Holmstead is completely wrong. We were granted waivers 50 times; that is a fact.

And it`s explicitly stated in the Clean Air Act -- explicitly stated - - that the type of pollution we`re talking about here is covered.

Now, your special guest here, who`s my opponent tonight, is the one who signed the order that said that EPA had no obligation and no authority to regulate greenhouse gases.

He was overruled. The Bush administration -- and he, in particular -- they were overruled by the Supreme Court. So the fact of the matter is we have a right to get this waiver.

And if you want to talk about special circumstances in California, that`s an easy case to make. We`re talking about a state that is a coastal state, so the sea level rise will absolutely impact us. We`re talking about a state that relies on snow pack, and snow pack is disappearing.

So what this administration has done -- and, by the way, if you read the Washington Post today -- and I have total confidence in their story -- Mr. Johnson`s staff, every legal person there, every scientist there, did not go along with this. And it is shocking.

And that`s why Henry Waxman and I are going to do careful oversight. This is another case of the cheese stands alone.

And I understand why Mr. Holmstead backs it. I mean, his firm represents some of the biggest polluters. You said who they are. I have one here, the petrochemicals and refiners. So I understand why he would say that.

I don`t understand how Mr. Johnson, who`s supposed to head the Environmental Protection Agency, not the Environmental Pollution Agency, should take that position. It`s just wrong.

MARGARET WARNER: We should mention that we invited the Environmental Protection Agent to send someone on the program tonight, and they declined, so you`re it, Mr. Holmstead.

Are you saying, though, that what the Bush administration is essentially saying is, when it comes to global warming, the states have no role absolutely, that it`s totally up to the federal government?

JEFFREY HOLMSTEAD: No, that`s really not what they`ve said at all. In fact, states can do virtually whatever they want on so-called stationary sources.

If you have a factory, if you have -- I`m not saying that makes sense. I mean, this really is a global issue.

But as a legal matter, Congress decided some years ago that the presumption is that this makes a lot more sense for cars to be sold with the same standards everywhere in the United States. And the only exception to that was an exception to deal with dirty air in California.

And the senator is absolutely right, that there`s been probably more than 50 waivers granted. But all of those waivers were designed to deal with the dirty air in California, not to deal with climate change.

MARGARET WARNER: If I could expand this...

SEN. BARBARA BOXER: But if I might...

MARGARET WARNER: Yes, go ahead, Senator.

SEN. BARBARA BOXER: I was going to say that every one of those waivers had to do with the mobile sources, with cars, every one of them.

And if you read Massachusetts v. EPA, the recent Supreme Court decision, they said very clearly that the Department of Transportation should go right ahead and issue their mileage requirements, but that has nothing to do with what EPA does.

And EPA really has an obligation. And, by the way, they are going to be sued so fast it will make their heads spin by all of these states coming in and saying, "What are you doing?", that they have to do their due diligence to cut back on global warming.

You know, all you have to do is look at what happened in Bali, where we were standing alone. We were actually booed there. And that`s why, at the end of the day, we came around.

But this position that they are taking now is so wrong on its face, it goes against legal precedent and everything else, they`re going to be overruled.

MARGARET WARNER: Briefly, Senator, because we`re just about out of time and I have to get back to Mr. Holmstead here, but essentially President Bush was saying, though, that this energy bill that he signed, and many of you voted for, that that is really an effective national strategy now to deal with global warming. Just on its merits, do you see it this way?

SEN. BARBARA BOXER: Not at all. And as a matter of fact, if he would read the bill, he would see that there`s a savings clause in there for the Clean Air Act. It specifically says nothing in this diminishes the rights of the states or anyone else under the Clean Air Act.

And Senator Feinstein has an important colloquy, and she says -- and I`m quoting it -- "In no way, shape or form should this bill diminish California`s rights to get a waiver."

So this thing makes no sense. Everyone is up in arms around the country. Mr. Johnson stands alone. And I will tell you: This is going to be overturned one way or the other.

MARGARET WARNER: Mr. Holmstead, back to you. Do you see significant differences in the end point that the California standards would try to achieve versus the federal mileage standards?

In other words, what I see is they get to almost the same point, but California would have gotten and the other states would have gotten there a lot sooner, in 2016 versus 2020.

JEFFREY HOLMSTEAD: I think what you`re saying is basically right, and there`s questions here about exactly what California would do and exactly what the Department of Transportation would do.

But they both get at the same issue. I mean, CO-2 emissions and corporate fuel economy are essentially the same thing. It`s just a measure...

MARGARET WARNER: Even though the California state model would have actually regulated the emissions...

JEFFREY HOLMSTEAD: Right.

MARGARET WARNER: ... and the federal model only regulates mileage?

JEFFREY HOLMSTEAD: Right. But you know how they measure mileage -- they measure fuel economy by measuring CO-2 emissions from the tail pipe. That`s how they do it. They actually measure CO-2 emissions from the tail pipe to determine fuel economy.

So the question for the country is really whether it makes more sense to have a national, comprehensive strategy or whether to have states doing different things.

MARGARET WARNER: Well, I can see you two disagree, but a brief point, a final comment from you. Do you agree with Senator Boxer, though, if this goes to court, the EPA might well lose?

JEFFREY HOLMSTEAD: When you go to court -- she is absolutely right that EPA will be sued, and they`re often sued. They`re usually upheld.

And, you know, this will be really a case of first impression. Not withstanding the fast that there`s been waivers in the past, they`ve been waivers about a very different issue. And so it`s going to be an interesting court case. I think EPA probably will win.

MARGARET WARNER: Well, we`ll have to leave it there...

SEN. BARBARA BOXER: EPA`s been losing all time lately, so I don`t know what you`re talking about. They lost the last case on this, and they`ll lose this because they`re not on the side of the people, and they`re not on the side of the law. But happy holiday.

MARGARET WARNER: Thank you, Senator Boxer. Thanks, Senator Boxer and Mr. Holmstead. Thank you both.

JEFFREY HOLMSTEAD: Thank you.

(BREAK)

JIM LEHRER: Next, those things Congress uses to spend special money. They`re called earmarks. And Jeffrey Brown has our story.

JEFFREY BROWN: The massive $515 billion spending bill Congress approved this week includes more than $7 billion for so-called earmarks or targeted spending projects, nearly 10,000 of them in all that members inserted to benefit their home states and districts.

REP. JEFF FLAKE (R), Arizona: ... $1.6 million for the city of Bastrop, Louisiana. According to the Bastrop Daily Enterprise, quote, "The money is officially earmarked for the purchase of bulletproof vests and body armor. Bulletproof vests only cost about $700 to $800, however, so $1.6 million would appear to be overkill."

Police chief Curtis Stephenson agrees, conceding, "There`s no way we need that kind of money just to put all our people in vests."

JEFFREY BROWN: Some members, House Republican Jeff Flake of Arizona among them, rail against earmarks, claiming they`re slipped into spending bills under the cover of darkness. Others, however, trumpet their ability to bring home the bacon.

When Democrats took control of Congress last January, they promised greater transparency of the earmark process. And this week, Senate Majority Whip Dick Durbin reported progress.

SEN. DICK DURBIN (D), Illinois: The total dollar amount of the earmarks contained in those appropriations equals 43 percent of the earmarks contained in the Republican appropriations bills of two years ago, a 57 percent reduction in the dollar value of earmarks, total transparency, total disclosure.

JEFFREY BROWN: Not good enough, said the president today.

GEORGE W. BUSH, President of the United States: Together with the previously passed defense spending bill, that means Congress has approved about 11,900 earmarks this year. And so I`m instructing Budget Director Jim Nussle to review options for dealing with the wasteful spending in the omnibus bill.

JEFFREY BROWN: But according to one watchdog group, Taxpayers for Common Sense, the White House plays the earmark game, too. It claims the administration managed to insert more than 1,600 earmarks into the spending bill.

And a representative of the nonpartisan Taxpayers for Common Sense joins us now. Steve Ellis is the group`s vice president.

Also with us is Charles Konigsberg, president of the Washington Budget Report, a nonpartisan online newsletter that provides federal spending analysis. He`s also the author of the forthcoming book "America`s Priorities: An Insider Guide to U.S. Spending and Taxes."

Well, Stephen Ellis, start with an explanation, a kind of Congress 101. What exactly is an earmark? And how does one get into a spending bill?

STEVE ELLIS, Taxpayers for Common Sense: Sure. An earmark is actually just a line-item spending provision that goes to benefit a specific entity or location in a member`s congressional district, in the broadest of terms.

And its origin can be multifold. Essentially, it can be a community talking to their member of congress, requesting money for a bridge or for some other project in their community.

But it could also be a business or a lobbyist that goes to that member of Congress and requests this funding. There could be campaign contributions that are also -- that kind of get the member`s attention. There`s other aspects of that.

Then, that member submits a letter to the Appropriations Committee that describes the project. And then the Appropriations Committee looks at these letters -- there were 32,000 of them, according to the House committee -- and they insert these provisions into their spending bills.

And, eventually, the president signs the bill, and the money flows.

JEFFREY BROWN: Can any congressman do it, or is it primarily through this Appropriations Committee?

CHARLES KONIGSBERG, Washington Budget Report: Well, the members of the Appropriations Committee tend to get a lot more earmarks than other members of Congress, although all members of Congress can submit requests to the Appropriations Committee. But seniority tends to determine the final amount of earmarks.

JEFFREY BROWN: And this is a bipartisan effort? I mean, this isn`t one party or the other when it`s at the appropriations level?

CHARLES KONIGSBERG: It`s absolutely bipartisan, yes.

JEFFREY BROWN: So what`s the problem? What`s the problem with them?

STEVE ELLIS: Well, certainly, one of the things is the decision about who gets the money is really more about political muscle than it really is about project merit. So you see the top dogs, the members in leadership and the senior appropriators, who are getting the most money.

I mean, if you look at in the House, you had three lawmakers -- Representative Murtha from Pennsylvania, Representative Lewis from California, and Representative Young from Florida -- one Democrat, two Republicans, they got more than $150 million each for their congressional district.

That`s more than any other lawmaker by far. We didn`t find anybody that went over $100 million. And right there, those represent the chairman of the Defense Appropriations Subcommittee, the ranking member of the Defense Appropriations Subcommittee, and the ranking member of the full Appropriations Committee.

So a lot of the problem is, is that we`re not picking the best projects; the projects and the funding is going to those who are the most powerful.

JEFFREY BROWN: What`s the argument for them, if there is one? I mean, isn`t part of what a congressman is supposed to do, precisely to get funding for projects for his or her local voters?

CHARLES KONIGSBERG: Well, earmarks are really endemic to our system. The Congress is given the constitutional authority to appropriate money, so it really is inherent in the system that we have that Congress is going to try to target money at various projects within those states and districts and that members of greater seniority are likely to be more successful at doing this.

Having said that, there`s also a strong argument that, for the national interest, we should have impartial officials at the agencies looking at the various earmarks and determining which are the highest priorities nationally.

JEFFREY BROWN: Are there examples, though, of worthy earmarks? I just want to get a sense of, in the wide range -- we`re talking about thousands of them just in this bill -- if you look at it, how many would you say are of the kind of egregious type? And how many fall into what people might think of as, "Well, it`s a worthy project"?

CHARLES KONIGSBERG: It`s hard at this point, with the bill having just been passed, to give a breakdown, but historically there have been some very worthwhile earmarks.

For example, the Human Genome Research Project, which mapped the human genome, was started by an earmark by Senator Domenici. The Children`s National Medical Center here in Washington also was established through an earmark.

So there are a lot of examples where earmarks have established important projects and activities. And when you look around the country, there are a great deal of earmarks in the area of highways, and fixing bridges, and water projects, and a whole variety of projects, which are really quite legitimate.

JEFFREY BROWN: Do you buy that? Where do you draw the line between appropriate constituent service and crossing a line to unnecessary and wasteful spending?

STEVE ELLIS: Well, it`s really hard to draw that line, as a matter of fact. I mean, it`s unclear whether the best road projects happen to be in the most powerful lawmakers` districts or whether that just happens to be happenstance.

And so you can certainly point to earmarks that seem to be worthwhile, but you can`t tell me or anybody can`t tell me that they`re the most worthwhile, they`re the most important, because there is no vetting process, there is no real competitive award process that goes on there.

And so kind of interestingly, one of -- something that was an earmark that got funded that we think is interesting. There was one that Congressman Wolf from Northern Virginia got that looked at foreign aid spending to see how effective our foreign aid spending was.

And it found that earmarks are undercutting the effectiveness of our foreign aid spending. So you had an earmark finding that earmarks are causing problems.

JEFFREY BROWN: We referred in our set-up to some reforms that were passed this past year because of these kinds of issues. What impact have they had, in terms of making them more transparent or even having less of them?

CHARLES KONIGSBERG: A substantial impact. I think that`s really the headline here: The total number of earmarks have gone way down. It depends who you talk to. They`ve either gone down 25 percent or 40 percent, but they`re headed down.

And that`s because of the transparency required by the new rules. The House back in January and the Senate this past September, as part of the lobbying reform bill, passed requirements that really require a great deal of transparency now.

JEFFREY BROWN: Which means what exactly?

CHARLES KONIGSBERG: Which means that, if you were to look at that big stack of paper that we saw in the set-up piece, about four inches of that were actually lists of all of the earmarks, with the sponsor, the project, and the amount of money. And that`s a...

JEFFREY BROWN: You mean, so you know who did it? You have a name attached to each project, and that`s new?

CHARLES KONIGSBERG: That`s completely new, and so we`re headed in the right direction. And that`s really the headline here, I think, of what`s transpired.

JEFFREY BROWN: Do you think it`s effective enough or do you...

STEVE ELLIS: Well, I think we`ve got a ways to go. I mean, what we saw was, over the last decade-plus, the number of earmarks exploded.

When the Republicans first took control of Congress, their first year in the budget, `96, there were 3,000 earmarks. In 10 year`s time, in fiscal year 2005, there were more than 15,000 earmarks. So it took us 200 years to get to about 3,000 earmarks, and then in a decade`s time we quintupled that number.

And so what we`ve seen is a 25 percent reduction, a reduction in the number in the dollar amount, but 25 percent less of a lot is still a lot. And so we still have a ways to go, and this needs to continue for the out coming years.

JEFFREY BROWN: We showed the president in the set-up saying that he was going to ask the budget director to do something about what he thought of as wasteful spending, and he meant the earmarks. I saw you both kind of look at each other at that moment. Are there things that the budget director, that the White House can actually to?

CHARLES KONIGSBERG: Absolutely. Back in the `80s, when I was working at the Senate Budget Committee, Jim Miller, who was then the OMB director, actually announced that -- well, let me back up for a minute.

Most of the earmarks are actually not in the legislative language. They`re in what`s called the report language, which is the committees` statements explaining the various bills and the provisions. Most of the earmarks are actually in the report language; they`re not in the law itself.

Now, historically, the administration has always adhered very studiously to what is in the committee report, because they know that Congress can always just shift the earmarks into the legislative language.

Jim Miller, back in the 1980s as OMB director, said, "Well, the reports are not actually binding, so we`re just going to decide which ones we want to implement and which we don`t want to." Well, that caused quite an uproar on the Hill, and he backed down.

JEFFREY BROWN: Now, you`re into a kind of arcane, a little bit of a shell game, in terms of where the money is put. But you`re suggesting that there are things the president or the administration can do?

STEVE ELLIS: Well, yes. I think that, once you get into the agency level, they do have some deference. It just depends on how much they want to exercise, because, remember, the people who are writing their checks that fund their agency budget every year, our Congress, they`re going to be writing their budget next year, so you`ve got to be careful about biting the hand that feeds you.

JEFFREY BROWN: And we cited your report which suggested the White House gets involved in this, as well, in terms of earmarks.

STEVE ELLIS: Yes, absolutely. I mean, there are many earmarks that are in the underlying presidential budget that get submitted to Congress. So, I mean, the game is played on both ends of Pennsylvania Avenue.

JEFFREY BROWN: All right, Stephen Ellis and Charles Konigsberg, thank you both very much.

STEVE ELLIS: Thank you.

(BREAK)

JIM LEHRER: Now, the first of two reports on toxic toys by our economics correspondent Paul Solman. Tonight, he looks at lead levels.

TOY TESTER: So you`ve got Diego, huh? Isn`t he cute?

PAUL SOLMAN, NewsHour Economics Correspondent: A one-time testing of toys for lead at a mall in Rochester, New York with a state-of-the-art x- ray fluorescence spectrometer.

TOY TESTER: Yes, that`s lead.

TOY TESTER: About 550...

PAUL SOLMAN: ... 550 parts per million, completely legal in the U.S., but many think it`s potentially toxic, because there`s new evidence, as you`ll see in a bit, that lead is dangerous at levels far below what the law allows.

SHOPPER: If it`s made in China, I mean, you wonder if it`s lead.

PAUL SOLMAN: American consumers have already been shopping scared this globalized holiday season due to the recall of some 25 million toys, mostly from China, which now supplies four-fifths or more of our playthings.

SHOPPER: I`ve been trying to purchase things not made in China, but it`s almost impossible to find anything that`s not.

SHOPPER: I`ve leaned away from buying more toys and getting more things like clothes or DVDs.

PAUL SOLMAN: So now you are Gary "The Happy Pirate"?

GARY "THE HAPPY PIRATE" SMITH: That`s me.

PAUL SOLMAN: Gary "The Happy Private" Smith, a kids` entertainer, has run a toy drive for nine years. This is the first year, though, that he`s testing for lead.

GARY "THE HAPPY PIRATE" SMITH: When the recalls started coming out, our warehouse, which has over 20,000 toys, has to be gone through to see if these toys are in there. But if I had a ship that day, I would have probably sailed and looked for someone.

PAUL SOLMAN: You would have gone and sacked their corporate fortress?

GARY "THE HAPPY PIRATE" SMITH: Maybe pillage a little, yes, maybe.

PAUL SOLMAN: But before we get to the potential dangers of even lower than recalled levels of lead in toys, what have we long known about the heavy metal as a toxin? University of Rochester neurotoxicologist Deborah Cory-Slechta.

DEBORAH CORY-SLECHTA, Neurotoxicologist, University of Rochester: It can cause lots of changes in brain chemistry industry to affect almost every region of the brain. And so, from that, you then get to behavioral changes, changes in cognition, those kinds of things, and things like changes in IQ.

PAUL SOLMAN: Though we`re finding out more and more about the hazards of lead, we`ve known it wasn`t safe for decades. The very first issue of Consumer Reports back in 1936 warned of lead in toys, as does the very latest issue.

TOY: I`m so glad you called!

PAUL SOLMAN: Don Mays is head of product safety at Consumer Reports.

DON MAYS, Consumer Reports: This was one of the many toys that was recalled by Mattel and Fisher-Price because of lead paint.

PAUL SOLMAN: And here`s another recalled by RC2 Corporation.

DON MAYS: This is one of the components of the Thomas the train...

PAUL SOLMAN: Yes, yes, I know. My grandson has this.

DON MAYS: Very popular toy among children. It`s a wooden toy, and it`s got also lead paint on this product.

PAUL SOLMAN: Are you serious?

Both Elmo and Thomas have been on the recall list for months, among the 10 million toys recalled this year for lead levels above the 600 parts per million standard. You`re watching only about half of this year`s Fisher-Price recalls at the moment.

The leaden paint standard was set by the EPA back in the mid-`70s to be enforced by the then-new Consumer Product Safety Commission. The commission`s current chair, Nancy Nord, enforces that same standard today.

NANCY NORD, U.S. Consumer Product Safety Commission: We have on the books a ban on lead paint. Anything above 600 parts per million is in violation of our standard, and we will recall it.

PAUL SOLMAN: But the American Academy of Pediatrics is now urging Congress to lower the standard from 600 parts per million to 40 parts per million. Why? Well, new research shows that even very low levels of lead are more dangerous than we ever thought, levels that show up in the blood and stay in the system for decades.

NANCY NORD: Our levels of concern back in the `70s and `80s were 30 micrograms per deciliter, 40 micrograms per deciliter, 60 micrograms per deciliter.

In the last five years to eight years, we now know that levels much lower than that, down to five micrograms per deciliter, maybe even two micrograms per deciliter are associated with changes in IQ. We looked at kids whose blood leads never went above 10 micrograms, and there we saw IQ loss of about 7.5 IQ points.

PAUL SOLMAN: Which can translate into something like 50 points on an SAT test. And it`s not just IQ, of course, but also, as Amherst Professor Jessica Reyes points out...

JESSICA REYES, Amherst College: Increasing attention deficit and hyperactivity disorder, increasing aggressive behavior, impulsive behavior, and even leading to things like juvenile delinquency and to crime.

DEBORAH CORY-SLECHTA: No level of lead is safe. So if you have toys, especially those first two years of life where you`re putting the toy in and out of your mouth, it`s getting wet, you can leech lead out of those kinds of surfaces onto the hands, into the mouth, the saliva itself will leech some of that out, you`re adding to that lead burden.

PAUL SOLMAN: In short, say Cory-Slechta, Reyes and others, almost any lead could be dangerous, especially for young children. Yet Consumer Reports has found unrecalled toys still on the shelves that are made -- although not painted -- with lead.

DON MAYS: We tested toys, and ceramic dishware, and metal jewelry, and vinyl products, including lunchboxes and baby bibs, and we found lead in many different types of products.

PAUL SOLMAN: But the federal government`s ban is on paint, not the product itself.

Most kids are not going to be sucking on their lunchboxes, so is there really as much of a hazard as you`re seeming to suggest?

DON MAYS: They`re certainly going to be touching it and then eating food, so there`s potential transfer from their hands to their mouth.

But, more importantly, at Consumer Reports we did testing here to determine that, if you put any unwrapped foods in your lunchbox, it will transfer to the food. That results in direct ingestion of lead.

PAUL SOLMAN: Now, to U.S. Consumer Safety Chief Nancy Nord, all this misses the bigger picture. First, paint on toys doesn`t threaten children nearly so much as paint on walls does.

NANCY NORD: If they live in any house that was built before the mid- 1970s, there is a very good chance that there is lead paint in that house. Children are poisoned by eating lead paint that is flaking off window sills and walls; that is where children are being poisoned by lead.

And the focus that this agency has come under, with respect to lead in paint on toys, has missed the whole bigger picture.

PAUL SOLMAN: As for lead within toys...

NANCY NORD: If there is no exposure, then under our statutes there is no risk.

PAUL SOLMAN: No exposure? No risk? That seems to be a matter of opinion. Consider this item: the Fisher-Price medical kit.

DON MAYS: This is a very classic toy. And when we did screening for lead, we determined that this blood pressure cuff...

PAUL SOLMAN: Blood pressure cuff.

DON MAYS: ... it goes around the arm. It has very high levels of lead. There`s also a black arm cuff and a blue arm cuff. Those actually have low levels of lead. We found high levels of lead in only the red ones.

PAUL SOLMAN: Levels ranging from 7,000 parts per million to 10,000 parts per million, as much as 1 percent lead, more than 15 times the paint standard. But according to Nord`s agency -- the one mandated to protect us -- it`s perfectly permissible.

DON MAYS: It`s not considered paint, so the regulations actually don`t cover it.

PAUL SOLMAN: Consumer Reports contacted both Fisher-Price -- owned by Mattel -- and the Consumer Product Safety Commission before publishing an article on the kit. Neither took action.

Fisher-Price declined an interview, but said the toy "meets the requirements set forth in the federal regulations, including the existing standards for lead content."

Safety Commission spokesperson Julie Vallese said much the same.

JULIE VALLESE, U.S. Consumer Product Safety Commission: The lead that may be present in its actual makeup is not accessible to the user. I think that you really need to question some of the science that is being used by groups that have an agenda.

PAUL SOLMAN: In the case of Consumers Union, an agenda to sell magazines, for example. We did, in fact, question scientists, as well as the country`s top toy store. It has pulled the red cuff kit from its shelves.

JERRY STORCH, Toys "R" Us: It`s enough for me at Toys "R" Us that Consumer Reports says there`s a problem with the product. That`s all I need to hear.

PAUL SOLMAN: We also questioned the state of Illinois, which found high levels of lead not only in the red Fisher-Price cuff, but also the green cuff in the company`s Sesame Street Giggles Medical Kit for 18-month- olds and up.

Illinois has banned both, and State Attorney General Lisa Madigan wrote to us that, "Although we have provided our testing information to the CPSC, they`ve not issued recalls on these products. In fact, they" -- the CPSC -- "have told the companies that they are not required by federal law to remove or recall these products."

Meanwhile, what about the millions of medical kits already purchased, perhaps played with for years? Even with the recall, surveys show that fewer than 5 percent of consumers turn in the offending product.

DON MAYS: If you`re not reading the newspapers, watching the news, listening to the radio at the right time and the right place, you`re not going to get that information. The recall process just simply doesn`t work.

PAUL SOLMAN: This brings us to the final question about lead and toys from around the world, the economics question. Just how safe should we be? It`s cheaper to use lead than other substances, after all, to make colors brighter, for example, plastic more stable.

Economist Jessica Reyes, however, thinks the cost-benefit analysis is a slam dunk. She realized that 30 years ago we were all exposed to high lead levels, since it was added to gasoline.

JESSICA REYES: And then, in the 1970s, as part of the Clean Air Act, the EPA mandated the removal of lead from gasoline, because they worried about a range of health effects.

PAUL SOLMAN: As lead was removed, state by state, year by year, it was a natural test of lead`s effects. Reyes` results were kind of amazing.

JESSICA REYES: So you have this big change in lead exposure, and then, 20 years later, we see a big and surprising change in violent crime.

PAUL SOLMAN: A huge drop in the `90s and beyond, when most experts expected violent crime to continue its steep rise from the `70s and `80s.

Reyes` analysis credits several factors, including more police and prisons, but the biggest, according to her research, is the removal of lead from gasoline, lead removed at a cost of three cents to four cents a gallon.

JESSICA REYES: You can justify the entire removal of lead from gasoline, all of those costs, just through these crime reductions alone. In fact, the value of the crime reductions can be 10 times as high as the cost of the removal of lead from gasoline.

PAUL SOLMAN: Thus, to Professor Reyes, getting the lead out of toys is a great deal, as an economist and as a mom.

JESSICA REYES: The think with lead is that its benefits are immediate and obvious to whoever`s producing, whereas the costs are remote and they`re insidious in a way that leads to all these bad effects.

PAUL SOLMAN: Bottom line, says the economist, it`s better, because it`s cheaper -- in the long run, a lot cheaper -- to be safe than sorry in a holiday season with more global toys than ever.

JIM LEHRER: In his next report, Paul will look at how the safety of toys and other products is monitored.

(BREAK)

JIM LEHRER: And finally tonight, a new leader emerges in South Africa. Ray Suarez has our coverage.

RAY SUAREZ: Just two days ago, Jacob Zuma was elected president of the African National Congress and gained a clear path to the South African presidency.

Today, Zuma was told he could face criminal charges in the new year, stemming from his time as deputy to South African President Thabo Mbeki.

Zuma and Mbeki were once friends and allies, but they had a very public falling out in the last two years. Mbeki fired Zuma as deputy president in 2005 after Zuma`s financial adviser was convicted of soliciting bribes on Zuma`s behalf.

Then, Zuma unseated Mbeki in a rout at this week`s ANC Party Congress, which was the most bitterly divisive gathering in the party`s history.

JACOB ZUMA, President, African National Congress: There is no reason for uncertainty or fear in any quarter.

RAY SUAREZ: And in a speech to the congress today, Zuma struck a conciliatory tone.

JACOB ZUMA: We have taken various resolutions at this conference which will guide us on our way forward.

RAY SUAREZ: But if criminal charges are filed against Zuma, he would have to give up his newly won party post. South Africa`s top prosecutor said today there is sufficient evidence to charge the 65-year-old Zuma with corruption and tax evasion from bribes tied to a multibillion-dollar arms deal. The prosecutor said a final decision would come soon.

Zuma, close to the pinnacle of power in a country of some 48 million people, says the charges are politically motivated.

For more, we go to Charlayne Hunter-Gault, who covered the ANC meeting this week. She`s now a correspondent for National Public Radio.

Charlayne, welcome. Who is Jacob Zuma? And how did he rise to one of the top positions of power in South Africa?

CHARLAYNE HUNTER-GAULT, NewsHour Special Correspondent: Hi, Ray. Jacob Zuma is, of course, the new president of the African National Congress. He has been a politician for all of his life.

He was born in a very poor, rural area of KwaZulu-Natal. His father died when he was young. He went to work to help his mother make ends meet. She became a domestic after the death of his father, so he`s a self-made man.

He has no formal schooling, but he`s a consummate politician. I mean, everybody thought Jacob Zuma was dead -- I mean, you know, politically -- after he was fired by President Mbeki.

But as many people as the conference said over the last few days, while President Mbeki was running around the world solving problems, especially in Africa and being an ambassador for the country, Zuma had a lot of time on his hands, so he was visiting areas, branches around the country, and generating support for himself.

So, if anything, this rise, phoenix-like, from dead political obscurity is a testament to the kind of politician he is.

RAY SUAREZ: Well, right after this latest triumph comes news that he may be on trial again?

CHARLAYNE HUNTER-GAULT: Well, that`s a real possibility. Just before he was to deliver his speech to the meeting today, one of the radio stations here broadcast that the National Prosecuting Authority now has enough evidence to prosecute him.

You mentioned in the set-up that he was about to be charged in connection with bribery and his business adviser, Schabir Shaik, who is now serving 15 years in prison for that bribe. And it turns out that they didn`t have enough evidence -- or at least that`s what they said -- they didn`t have enough evidence to make the case initially, so those charges were dropped.

But now, I`m told, they have more evidence that not only relates to the bribe and the arms deal, but also to tax evasion, racketeering, and a few other things.

Initially, the bribe was supposed to be something like $1 million dollars. I`m told that it`s over $4 million now. But, of course, none of -- this has been filed with the court in order to reopen the case. This was an affidavit from the National Prosecuting Authority.

So apparently they feel, at this point, that they have sufficient grounds to go ahead. Of course, any prosecution now is going to look very politically motivated.

And while Zuma today, in his speech to the Congress, as you heard, talked about unity and talked about what a good friend and comrade Thabo Mbeki was and how they`re going to be able to work together, there is some speculation that, if this indictment does come down, there`s sufficient majority of the ANC, African National Congress, parliamentarians to call an early election and possibly force Mbeki to step down.

But, of course, all of this right now is in the realm of speculation.

RAY SUAREZ: Well, to win the party presidency, Jacob Zuma had to beat a sitting president, a man who had worked hard to keep white capital and industry from leaving the country and the white population itself. He has presided over the growth of a new African middle class. Does this vote represent a repudiation of Thabo Mbeki`s time as president?

CHARLAYNE HUNTER-GAULT: Well, I think what it represents are a couple of things. One is perhaps a repudiation of Thabo Mbeki`s style, which many have described as imperious, isolated, that he takes decisions more or less to himself. I mean, these are the charges, that he doesn`t consult.

So there were many who felt that this was more an anti-Mbeki vote than it was a pro-Zuma vote. But if you were at that conference, you could see that, while there may have been many reasons why the delegations repudiated Mbeki, they were totally enthusiastic about Jacob Zuma.

I mean, they sang his theme song, "Awuleth Umshini Wami," "Bring Me My Machine Gun," the same song that he sang today at the conclusion of his message.

And that`s the real difference between -- one of the differences between Mbeki and Zuma. Mbeki would not have stood up there and sang any kind of song. He would have quoted Yeats or Shakespeare in his address, but Zuma didn`t do any of that. He`s not an intellectual in that sense.

But he did engage the crowd, as he sang and danced and pranced around the stage singing "Awuleth Umshini Wami," "Bring Me My Machine Gun."

RAY SUAREZ: In the little time we have left, maybe you could tell us whether -- if Jacob Zuma does rise to the presidency -- he`ll take South Africa in a different direction politically and economically?

CHARLAYNE HUNTER-GAULT: Well, that`s not what he or his deputy president, who was the secretary general of the African National Congress, have said. There have been slightly confusing things being said, but the new deputy president, Kgalema Motlanthe, said yesterday that the ANC was not going to micromanage the government from Luthuli House, which is here in Johannesburg. The government would be in Pretoria.

And the same thing has been said by Zuma, including when he went around the world, the United States and United Kingdom, reassuring business that the microeconomic policy that the country is pursuing would stay on track.

But one thing that we`re going to have to watch -- and that is that his big support comes from people on the left. It comes from the ANC Youth League. It comes from the congress of trade unions, COSATU. It comes from the Communist Party.

And the Communist Party leaders said yesterday or today -- I`m losing track of time at this point -- that there wasn`t going to be an economic u- turn but a steady progression, which could mean, you know, more of a movement to the left. It just remains to be seen.

But, clearly, Jacob Zuma is going to owe something to those people I`ve just mentioned who helped him to defeat Thabo Mbeki.

RAY SUAREZ: Charlayne Hunter-Gault, thanks for joining us.

CHARLAYNE HUNTER-GAULT: You`re welcome, Ray.

(BREAK)

JIM LEHRER: And, again, the other major developments of this day.

President Bush said he`s not ready to judge if the CIA was wrong to destroy interrogation videos.

And a suicide bomber in Iraq killed a U.S. soldier and up to 14 Iraqis north of Baghdad.

We`ll see you online and again here tomorrow evening, with Mark Shields and David Brooks, among others. I`m Jim Lehrer. Thank you, and good night.