The NewsHour with Jim Lehrer

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. . . . . . . . . . . the nature of what's to come and by the Corporation for Public Broadcasting this program was also made possible by contributions to your PBS station from viewers like you. Thank you. Violent protests broke out today as the economic summit opened in Genoa, Italy, thousands of people threw fire bombs and stones and police fought back with clubs, water cannons and tear gas. One demonstrator was killed, Italy's interior minister said police apparently shot him in self-defense. Dozens of officers and protesters were injured. Inside the meetings, President Bush and the other leaders of the industrialize

nations announced a new global AIDS fund and pledged $1 billion for it. The political turmoil in Indonesia took a dramatic turn today. The top legislative body announced impeachment proceedings against President Wahid. They would begin tomorrow. They said 11 days early. He had threatened to begin ruling by decree July 31st in the world's fourth most populous nation. The head of the legislature said it would demand Wahid answered charges of corruption and incompetence next week. This will be a very very significant and decisive political development of this country because I know that people have been very anxious to see the holding of the special session. And tomorrow morning I believe that everything will be clear and of course we expect Mr. President will attend the meeting on Monday.

Wahid is Indonesia's first democratically chosen president in 44 years. He took office just 21 months ago but since then the country is faced ethnic conflict and economic hardship. The first U.S. federal tax rebate checks went out today. President Bush looked in by satellite from Italy on ceremonies at a government processing office in Kansas City. Vice President Cheney spoke against a backdrop of boxes of checks. He said by the end of September the government would send out 92 million individual rebates totaling 38 billion dollars. For all of that our work does not end today. We in government still have a responsibility to deliver the tax cut in full over the course of the next decade. And we must be vigilant in resisting the temptation in Washington to spend too much. Washington has been fond of telling taxpayers to send it in. As up today Washington is getting some needed experience in sending it back.

In Washington Senate Majority Leader Dashow said both parties deserve credit for the rebates but he said the president's tax cut plan did not treat all taxpayers fairly. What I think could happen is that they're going to raise the expectations for a lot of people that aren't going to get any check at all and I don't know what you say to that 20 or 25 percent of taxpayers who don't get a check in the mail who may be expecting one and they happen to be the people that probably need the checks the most. So I'm disappointed that we weren't able to do a better job that they weren't supportive of doing a better job of making sure everybody got some money back. Taxpayers are expected to start receiving the checks by Monday. Congress today overwhelmingly approved another six and a half billion dollars in spending for the current fiscal year. Among other things the bill includes 5.6 billion for military fuel, health care, and other operations. 100 million to fight AIDS in Africa and 116 million for mailing the tax rebate checks. President Bush is expected to sign the

measure. The Senate today confirmed the first of President Bush's judicial nominees. One was Roger Gregory. He'll be the first African-American to serve permanently on the fourth circuit court of appeals. It covers the Carolinas, Virginia, West Virginia, and Maryland. Last year then President Clinton gave Gregory a temporary appointment to get around opposition from Republicans who control the Senate at the time. And that's it for the new summer tonight. Now it's on to the General of Meeting, Shields and Gigo, and research troubles at Johns Hopkins. Margaret Warner has our look at the Economic Summit. This was the scene in the streets of Genoa, Italy, as rioters tried to disrupt the opening day of the G8 summit. The death of one demonstrator made it a particularly violent day, even by the standards of the outbreaks that often

erupt at such meetings. Demonstrators hurled fire bombs and stones at police and tried to breach a steel mesh security fence near the summit site. At least 46 protesters and 31 police officers were injured. Thousands of other demonstrators marched peacefully, demanding that the world's richest nations slow down the rush to globalization. The President Bush, as he left London for Genoa, rejected the protesters' point of view. Trade has been the best avenue for economic growth for all countries. And I reject the isolationism, and protectionism that dominates those who will try to disrupt the meetings in Genoa. The leaders who met inside a medieval Italian palace today from the US-Britain, Canada, France, Germany, Italy, and Japan did reaffirm their support for a debt relief plan for poorer countries. But their primary focus was

what to do about the flagging world economy. In Europe, economic growth has slowed to just over 2%. And the European Union's new currency, the euro, is at an all-time low. In Asia, Japan continues its 10-year slide, while Singapore is officially in recession. South America, Argentina faces the possibility of default, sending a chill through neighboring economies. And unlike previous world economic crises, the US economy is not functioning as an engine for worldwide recovery. The American economy grew at a robust 4.4% during the last global financial crisis three years ago. It grew at an annual rate of just 1.2% in the first quarter of this year. Dragging it down have been the manufacturing and high-tech sectors. And Federal Reserve Chairman Alan Greenspan warned this week that the US decline may continue. The period of sub-par economic performance, however, is not yet over. We are not

free of the risk that economic weakness will be greater than currently anticipated and require further policy response. Late today, the leaders meeting in Genoa outlined a series of steps to boost their own domestic economies. They also pledged to try to launch a new global trade round. Their meeting continues through Sunday. Now three perspectives on the summit and the slowing world economy. They come from Robert Hormats, former Assistant Secretary of State for Economic Affairs in the Carter Administration, and currently Vice Chairman of the investment firm Goldman Sachs International. Robert Thompson, Managing Editor of the US edition of the Financial Times, and Jerry Jazzynewski, President of the National Association of Manufacturers. Welcome, gentlemen. Bob Hormats, starting with you. Why are we seeing this broad economic slowdown throughout the world? Well, there are really several factors. The slowing American economy is one important factor of the technology collapse that is part of the slowing of

our economy is certainly an additional factor. But in a number of other countries, they have their own problems. Higher energy prices really have affected virtually every nation in this world. In Western Europe and Japan, they're in need of major structural form. They've dragged their feet and implementing that, and that has reduced the dynamism of their economies as well. So there are many factors as some are global and some are endemic to individual countries. What would you add to that Jerry Jazzynewski? Well, I think Bob stresses a lot of the right things. I do think that the Europeans could be doing more now with respect to encouraging growth, and I think he didn't really mention the imbalance with the dollar in the Euro, which not only is hurting American exports, but is causing inflation in Europe, which prevents them from lowering interest rates. It's causing problems for Argentina, and in general is, I think, an impediment to improved world growth. Robert Thompson, it sounds as if, I mean, do you agree with your colleagues here that in a way the more the world economy becomes integrated, the greater danger of a sort of

contagion effect when there is a downturn? I think that's certainly true. And it also means that different countries have increased international responsibility. No economy exists in isolation, and that's why so much pressure is put on, for example, Japan to stimulate its economy, given the important role that it should play. You might say that the world economy has 12 cylinders, probably eight of them in the US, two in Eastern Asia, and two in Europe, and just about all of those cylinders aren't firing at the moment. So you're seeing Robert Thompson that far, it's not only a question of, or it's not only the fact that the US economy isn't pulling the world out of this slow down, but then, in fact, to some degree, we've helped drive the slow down in the first place. Well, exactly. Slow down fields on itself as a declining confidence speeds on itself. And you can see that the statement released today by the G7 leaders is almost a boosterism because of the international concern about confidence. In a sense, they've replaced investment bank

research analysts as the cheerleaders for the world economy. A Bob Hormats is an investment bank analyst. What would you add to that? Well, I think there is this sort of international set of repercussions when one country deteriorates in terms of its growth, like the United States, the biggest economy in the world, it does tend to put pressure on other countries. It's the downside of interdependence. When the US is growing very rapidly, the Europeans sold more and more goods to the US. That helped their growth. And the Asians in particular sold a lot of high tech items in the United States. Now, we have a deterioration in our economy. High tech demand has become a bust. And that's hurt. All the Asian high tech exporters. And the Europeans have been slow to react. They have not done enough to stimulate their own economy, stimulate domestic demand. Nor have many of the Asians. So they rely too much on us when we go down unless they have taken sufficient measures to counter that decline. They're going to go down too. And they are. Well, there have been a number of analyses in

the papers these last few days. Today in the Wall Street Journal, Bob Hormats, staying with you, that really the world economy is more dependent on the US economy now than even 10 years ago. Do you agree with that? I do agree with that. It shouldn't necessarily be the case, but the problem is that we have been the big grower for the last 10 years. And many of these other countries have not done what they need to do to restructure and reform their economies, to improve productivity, to improve the return on capital. So a lot of capital comes from Europe and Asia to the United States, helps us hurt them. But it is pushed up as Jerry's pointed out, pushed up the dollar. And now that's become a negative factor for the US. It was a positive factor before it's become a negative factor. So they're upsides and downsides to this interdependence. And what would you add to that, Jerry? Just an asking in terms of the manufacturing sector and what has occurred now that the US has become as as Robert Thompson put it eight of the 12 cylinders of the world economy? Well I think he has it right. It's hard to overstate as both of them suggest the size and importance of the United

States, both because of its size. And then we've been the technological leader and we've been the leader with respect to a lot of the reforms. And even recently we've been cutting taxes and reducing interest rates. So on the monetary and fiscal policy side we've we've been leading. And I think from a manufacturing point of view, we've really been hard hit for the by the high interest rates, the extraordinarily increase in energy. And then the dollar as I mentioned, now there's been some improvement. We've acted to bring down interest rates. Energy prices are coming down. And so there are some positives in the picture. And I think that if we had an even more united effort on the part of our other partners to encourage growth. And I think frankly their community could have stressed growth a bit more. I was pleased that they emphasized trade, which is an important part of this, but I do think we're facing a real challenge to world growth. And everybody has to get a bit more serious about it, including the United States, but our trading partners even more. Robert Thompson explains to us why you said that the Europeans really haven't

done what they need to do. Why not? Well essentially both in Europe and in Asia there's been a false sense of economic security. They haven't taken advantage of the good times to undertake very difficult reforms of labor markets and make their own corporate world more competitive. And so you now have a situation where economies are slowing, unemployment is rising, and those very politically sensitive reforms are much harder to undertake. Hasn't also the economic union in Europe or the coming of the common currency, forced at least some countries to stick to real austerity measures? Will they feel that way anyway? Well, it's certainly starting to feel that way and they may soon know what austerity means. But there are real contradictions and one would hope that the G7 leaders are more frank with each other in private than they have been in this public statement because they talk in generalities about the economic situation, but there are real responsibilities on these countries, including Japan. And there's also a false sense of economic

situation displayed in that statement because they talk about energy prices still being too high. Well of course we have a statement from Saudi Arabia today that they think energy prices are too low and they're going about talking up prices as we speak. Bob Pormats, how do you assess that communicated came out? Well in terms of stepping up to the problems and really being honest about the problems and proposing real solutions. Part of the problem is that each of these leaders understandably is playing to the domestic constituency, his domestic constituency. As a result of that, they're trying to put the best face on their policy in the communique and in the public statements they make afterwards. I think there are some encouraging things. The Japanese part of the communique does indicate the importance of vigorous implementation of reforms. That's been lacking in Japan for 10 years. They're going into their fourth recession in 10 years. That is encouraging but by and large I think they did not place efficient urgency on regenerating growth and particularly

on doing the hard things. And there are hard things that need to be done at each of these countries to improve productivity and return on capital. And unless they do that in Europe and Japan to try to develop the rates of productivity that we've enjoyed in the United States, they're going to have lagging growth for a period of time and they won't be able to grow rapidly. They'll depend more on exports to the United States and that will widen the current account of balance that we've already got. Sure, Jasnowski, did you see anything in the communique or what did you see that address the concerns of the protesters in the street? Well, I think there was some real effort to address the concerns of the underdeveloped countries and I think that's a high priority politically and it's important economically. And I think that that's probably the area where it did the most to address the protesters because I think some of the people are legitimate in their concern about leaving the poor behind and I think that that's a great concern to all of us. And I think they really are trying to address that. What bothers me is that you can't address the

underdeveloped well if you don't have strong real growth. And I must say that that part of the communique really was much too weak and the United States is really having had a pretty serious recession in manufacturing and having a pretty serious slowdown has begun to address the problems with big cuts and interest rates and tax cuts. And I think we're bottoming out and about ready to have a decent recovery and now the greatest threat to that recovery is this slower world growth and this imbalance in the dollar. And so I don't think people they're fully understand that the locomotive is slowed down and we're starting to chug up again but it may be that before we can get going the global train starts pulling us down a bit more. And Robert Thompson going back to the concerns of the protesters just for a minute what did you see in the communique that that that specifically address some of their concerns? Specifically not a lot certainly a recognition of responsibilities to the developing world.

But I think when you look at the protesters you have to make a distinction between economic history and history onyx and essentially the violent protesters should be ignored and some of the NGOs and others that are raising issues that the G7 should address are better listened to clearly enough. But one of the issues arising from this summit is whether this will be the last showpiece summit of its kind because obviously it attracts the violent protests that the level of general debate isn't particularly high and even the Italian government which is hosting this summit has said it can't go on being held the way it's been held in the past. Well poor Mets addressed that issue for what impact these protests are having on meetings like this? Well they're having a very disruptive impact they started out in Seattle. They weren't the cause of the failure of the World Trade Organization meeting in Seattle but they certainly were very disruptive. The problem really was internally there were big divisions among the key countries. I think it would be a terrible tragedy to cancel these summits because of protests in the streets.

That's exactly what these people want. Most of these people want to demonstrate to make a point a very visible point. There are some in the streets who actually have causes like dealing with AIDS or poverty or the environment but they're drowned out by people in the streets so what we need to do is have a dialogue with the constructive elements there and then call the spade of spade and indicate that there are a lot of very disruptive people. We shouldn't list them because they don't want a dialogue they just want to be disruptive and we should certainly not cancel the summits in the face of pressures from those people. That would look enormously weak and it would be very disruptive to confidence in world leadership and world leadership in particular in the industrialized country. Briefly from the three of you just quickly around what do you think of the prospects that next next year we could be talking about a global recession? Jerry Jazzynowski. I think the recovery in the United States we're bottoming out will be enough on the consumer side and they're in more positives in the general environment so that we avoid a global recession. Robert Thompson?

The U.S. will lead to why I suspect first quarter we should see some signs of recovery but it won't be a strong recovery people looking for three or four or five percent growth are living in a dreamland. Bob Hormett's no global recession in this in store? I don't think there'll be a global recession but weakness abroad is still a big problem. When we had our last recession in 1990 Germany and Japan were growing at five percent and the dollar had been declining for five years prior to that. Now we have Japan and recession. Germany growing in a very low rate and a very strong dollar. That slows down our own recovery. I think we'll avoid a recession. I think we'll probably grow at a modest rate next year but still technology is going to take a lot of time to catch up because there's such a glut and such over capacity. So slow growth but difficult growth. All right gentlemen Bob Hormett's Robert Thompson, the jury just nasty. Thanks so much. Thank you. Still to come on the news hour tonight. Sheals and Gigo and the Johns Hopkins Research Story. Sheals and Gigos indicated columnist Mark Sheals Wall Street Journal

columnist Paul Gigo. First the flap over President Bush's foreign policy skills Senate Majority Leader Dashyl started it when he told reporters from USA Today and Gannette that American leadership in the world was eroding. He said quote, I think we are isolating ourselves and in so isolating ourselves I think we're minimizing ourselves. I don't think we are taken as seriously as we were a few years ago in quote. That prompted this reaction yesterday from President Bush and a response from Senator Dashyl. One of the things that America has pride in itself on is a bipartisan foreign policy and I would hope that that continued that tradition continues. It's a very important tradition. I think the people I think people of America have been appreciating foreign policy positions we've taken that we're not retreating within our borders. I'll represent the American

interests and secondly the world leaders have found that I'm a personally speaks plainly and openly about key issues we're willing to listen but I will still continue to stand for what I think is right for our country and the world. I happen to believe missile defenses is important to keep the world more peaceful and I believe we need to work together to reduce greenhouse gases but I refuse to accept a treaty that will harm our country's economy. I do believe it's important to have a bipartisan spirit when it comes to foreign policy and I would hope that tradition continues. Well I can understand their sensitivity to public comments by members of the Democratic Party and I want to respect their need for support at this point and so I want to I want to be as helpful to them as I can and I appreciate the need to be as supportive as I can and I'll

try to comply. I do think that it's unfortunate that on so many occasions during the Clinton administration Republicans were extraordinarily critical and damaging to the president's efforts when he attempted a number of foreign policy initiatives. I don't want to take that approach. As I try always to do in question and answer forums I try to be as open and honest as I can. I was being open and honest yesterday about my feelings and had I given some thought to the fact that the president was departing I probably would have chosen a different time to make those comments. Paul was was the National Out of Line I'm saying what he said when he said it. I think he was I think this early in an administration in particular when a president's going to the G8 summit which is something every president has done for 20 more than 20 years to do that is I think undercuts his ability to

to do the job and I think in that sense it was probably a political mistake on his part. Well it was a political mistake on his part because I think it made him look more partisan than he wants to be seen on foreign policy. He wants to be seen I think as being able to somebody can get along with the president and I think it also opens himself and his Democrats up to criticism if in fact they oppose president Bush when he's proposing a trade agenda an open trade agenda which a lot of Democrats have real doubts about is that isolationist so I I think it was it was a mistake on of statesmanship a mistake of statesmanship. I think it was a mistake said when he said it and Tom Dashard said that he said we had to do it all over my head yesterday morning with a bunch of other reporters and he was he was pretty clear on that and and other Democrats Ted Kennedy said that to as well. I having said that I think me thinks thou doth protest just a

little too much the the treatment that Bill Clinton got at the hands of Republicans including Governor Bush when he announced it made his first major foreign policy address. President Clinton was in Greece in Turkey. He said we had a foreign policy that was like a cork and the United States have become like a cork caught in the current Dick Cheney when President Clinton was in the Columbia said that will show eight years that the United States was suffering from eight years of neglect and misplaced priorities and that my favorite was Tom Delayed distinguished Republican later when the president was in India said history will show these eight years were probably the worst eight years when it comes to foreign policy in the history of the United States. Now it's great to talk about partisanship bending it at what is edge. Those are three you know rather strong criticisms of the sitting president made by leading prominent Republicans including the one who succeeded him. So the issue wasn't raised at the time. The issue wasn't raised at the time and they didn't see the

business. Well I think it was there was a lot of criticism of I don't remember our talking about it. So we didn't talk about it. But it didn't happen if we didn't talk about it. Those were all what about that. Well most of those were all in the you know some of those I a couple of those I think probably were mistakes but when you're talking about the middle of a presidential campaign I think and particularly when President Clinton his last year was I mean he was visiting every country he kind of had a world tour so he was overseas an awful lot and it probably right you shouldn't do it while he's while he's overseas you should wait till he's home. But I think it's a little different after six and seven years when he has a track record established and an agenda established than when you're six months out of the president into the presidency and trying to establish your credibility with other world leaders. Do you think there's a difference? No I think the president Bush started off emphasizing his differences with the Clinton administration and since then he's been criticized by conservatives that he scrambled back to the Clinton position. The Clinton position in Ireland he's taken a

more active role in the Middle East he's dispatched to the secretary of state he's got his own envoy there. I mean you know I don't know where there's a lot of daylight between the Bush policy and the Clinton policy except he you know he did not he did not was not assertive at the outset and of course he still be an examiner both sides because of his searing psychological spiritual analysis of Mr. Putin that he had look having looked in his soul and I think that's that's probably a lingering problem. But there's that these are fundamentally two policy disputes that they're in a real the differences here one is missile defense and the other is the Kyoto treaty per se which even Europe hasn't hasn't ratified and dashel takes these and turns these into an accusation about isolationism and retreating within our borders. You don't think that's the legitimate complaint. I think it's completely phony. I just completely false it's a nice because it resonates so great in American history with the 1930s and so on and when the Republican Party was truly isolationist it's often used as an accusation but I don't think it's true at all. This is

the president who won on his last trip to Europe said that we're going to extend NATO into a further closer to the to Russia. He's going to keep the troops in Bosnia. He's got the most aggressive free trade agenda of any president since John F. Kennedy. There's nobody I know who's more free trade on Capitol Hill than Tom dashel I mean so that's sort of the straw man to lift him up is but what about his isolating that the gap part together and the rest of the Democrats a lot of his party are going to oppose it. I mean I think go ahead. I'm sorry. No. I mean what but dashel's point is that the president is isolated in the United States from from from not only from from Russia and Europe but also from China and all these and has to do with global warming and does have to do with missile defense. Is that is that is what I think it's I think it's a fair criticism. I think it's I think it's a criticism that's legitimate. I mean I think that administration can counter some of the criticism but I think it's it's a it's a stinkers and they they trumpeted that Jim they trumpeted we are not and they've been pretty open about the the ABM treaty and they're that they intend to abrogate it if necessary and that's

that's an open an open issue at this point as the president would say and it's divided between the two he doesn't seem he doesn't seem to be as concerned and it's absolutely understandable that George W Bush would be open to some scrutiny and foreign policy because he came to the office with probably I think Paul would acknowledge this narrow and more shallower foreign policy credentials than any president in our lifetime including Bill Clinton so illegitimate it's a legitimate point of inquiry oh sure you can debate foreign policy I don't think there's any question on any question about that I just think the accusation itself of of of isolation of this is factually correct all right new subject the faith based initiative it finally passed the house yesterday Paul and but only after the Republican moderates in the house through the leadership of scare what's what's going on well there was some concern they deleted a day they delayed it a day but I in the end I think they all came around I think there were only four Republicans who who voted against it and there wasn't it the leadership whipped a little harder they

hadn't been working I think to round up the votes and there was some doubt but did they really didn't change the bill at all to get the votes I think the story was on the Democratic side then they did they did change or at least they made the pledge J.C. Watts made the pledge that it when it goes to conference they will do something about the discrimination of of religious groups against minorities etc they did they didn't change the text of the house they did they did they did pledge that and we'll see well I've seen a lot of pledges that in conference are taken back but you shouldn't make what do you think a mark about it should make too much out of a new power for the moderate Republicans in the house or in the moderate Republicans you know have the potential I mean but you get to give the leadership credit or blame the moderates whatever you want to do I mean in every crucial gut vote Jim the moderates basically join the majority and follow the leadership I think this is this was a sad development I really do

I think you know every Republican president comes to office and they talk about tax cuts that's that's the holy grail this was the one innovative in my judgment far reaching proposal of the Bush administration I mean this was a this was something Republican presidents were used to them kind of say well gonna get the welfare queen and designer jeans we're gonna purge the welfare roles of all these cheats he said we're gonna do something about poor people and instead of a debate upon helping poor people what it became in the house and I think Democrats bear responsibility for this was a debate over hiring practices and you know separation of church and state I got to tell you if this attitude prevailed in 1945 we wouldn't have had a GI bill they would have said you want to go to Yeshiva University I'm sorry that's a separation of church and state you want to go to oral Roberts a southern Methodist holy cross I mean it was I thought it was a sad sad hearing kudos to to brother Shields here I think I think the real story was the Democrats because remember what this wasn't a partisan issue in 2000 taxes were a partisan issue environment was a partisan issue this wasn't Al Gore in May 24th 1999 in front of the

Salvation Army basically said he supported more or less what's in this this bill which is to allow these groups to apply for federal money to do the kinds of things are already doing but to do more of them but do it with federal money to have access to federal money that other the secular groups have but they they have they haven't been this has to do with everything from feeding the board to all those kinds of cities that's sort of I mean Bill Clinton was the president who signed charitable choice Al Gore had a bigger pose I mean I think the criticism you can make of the Bush folks is it was too small a proposal I mean trunk from 90 down to 13 I'll say this Jim and in a constitutional Washington tonight the people who are providing services to people who are dependent on alcohol drugs are not the people who are opposing this bill the being held in church basements that being conducted under religious auspices as well as the country yeah it was enormous partisan pressure on the part of the democrats to deny to make the smallest vote as possible Danny Davis a Democrat from from Illinois had met with president

Bush personally promised that he was gonna vote for it had gone out and made a public appearance with a president and supported it and then the end he voted against it every member of the black caucus which it represents the people who need this help voted against this and Tony Hall the Democrat from Ohio said sounds to me like this is who supported it said you know this seems to me like it's a partisan play voting reform we had a seg market rent a segment here on the news our last night or two experts who've just finished studies about how to fix the way we vote and both of them came up with the same conclusion which is that there is the kind of the dot fill in the dot electronic scanning system could be done for 1.2 billion dollars all over the country one of them suggested a six hundred million dollar matching federal thing if the county wanted to do it they could do it and you could fix the system quickly and easily if this anybody talking about this except these experts there is a bipartisan bill on that and Mitch McConnell i forget who's his co-sponsor uh... or sell it or sell it they do not move the christmas christmas so you think it could happen

you agree with the old part of it could this part of it could happen if it doesn't get caught up in other reform issues like registration and motor voter and some of these other partisan edges that are creeping into it i was struck by behind me i'll go ahead okay two things one the the report last night Margaret had showed the margin of victory of the margin of the plurality of all over George Bush's five and a thousand votes ten times as many votes went unpounded in the election of two thousand i mean that that's just an abomination of democracy it's unacceptable when we like the president is a national responsibility the federal responsibility gym i can go to an ATM machine take money on my same as kind of a hand any there pay my utility bill you have a record of it and so forth so i mean the the idea the idea of not doing i cannot understand why the bush administration has not grabbed this and do a stick because you know they could take the high road on it and say look we're going to make sure that every vote counts in every every american matters let's say finally the death of uh... Catherine Graham the outpouring of grief and respect for her has been enormous what do you if she touched more cords and people realize

well she was uh... she she's one of those who deserved in terms of her impact on journalism and impact certainly in washington she cut a very powerful figure that i don't think there's the there's any question about it and and everybody who knows the washington post re who lives in the city knows the washington post is a powerful player well she made it it's not single-handedly but in in in large part into the newspaper that it has become and i think it part by being a very not just a journalist but a very shrewd businesswoman who kept the post an independent profitable voice that could afford to spend a lot of money on the journalistic enterprise sure that giant journalism but it means she was also a washingtonian drive up fifteen street you'll see outside the washington post people are walking up and leaving messages they're leaving flowers i mean it's an out-port a spontaneous natural out-port of affection and it's i think she was she was the the quintessential american woman of the 20th century in this sense she started as a daughter she was the daughter of your

dreamer she became the wife a field grant a powerful influential able guy who went you know and sadly went crazy uh... she was a great mother and then all of a sudden middle age she stressed into this position of enormous responsibility and she became uh... probably the dominant american businesswoman of her era and one of the most famous women in the world yes and amazing yeah i mean well okay finally there was uh... finally finally there was an announcement about your future this week uh... Paul tell us about that uh... well i was so fortunate enough to be uh... named uh... the uh... a couple of months the editorial page editor of uh... my favorite newspaper the wall street journal uh... which the editorial page which my uh... uh... predecessor and the current boss Bob Bartley has uh... uh... turned i think into one most influential most well-read uh... editorial pages and my job uh... sometimes uh... unenviable i guess is to is to make sure that that tradition and that readership uh... continues but it's a real privilege and a challenge good choice more what do you think you know gimme was about a fifty one

forty nine foot is it is a next like i lost the popular book but i wanted to come set come september when you take over it will mean the end of shields and g-go but uh... we certainly hope that some we can continue some relationship with you Paul and uh... we'll be seeing you many times between now and then but uh... on this occasion congratulations thanks Jim congratulations and finally tonight we go to race swara as for the story of the research hall to john's hopkins university in a move that shocked officials of john's hopkins university yesterday the u.s department of health and human services suspended all federally funded medical research at the university involving human subjects the decision means that john's hopkins medical school baby medical center and other university institutions will temporarily lose three hundred million dollars worth of federal funding

for clinical trials suspension covers two thousand four hundred human experiments involving fifteen thousand patients and volunteers the decision was prompted by the recent death of elan roach a twenty four year old volunteer enrolled in an asthma study roach a lab technician died on june second one month after inhaling an unapproved drug as part of a study into the causes of asthma earlier this week hopkins officials concluded their own investigation saying the university's researcher had not adequately checked for problems with the compound called hexamethonium hopkins also found that the researcher had not warned roach properly about the chemicals risks but in a hand-delivered letter to hopkins yesterday the federal office for human research protections had numerous criticisms after inspecting hopkins the government found that the investigators failed to obtain published literature about the known

association between hexamethonium and lung toxicity such data was readily available via routine internet searches prior to its approval of the research the institutional review board did not receive or request from investigators information regarding the drug safety and said the informed consent document failed to adequately describe the research procedures to be followed moreover the report found a pattern of safety lapses in other human trials at hopkins which receives more federal funding for human research than any university in the country those problems included internal review boards called IRBs that did not always examine research at properly convened meetings multiple cases of discrepancies between the risks outlined in informed consent documents and the actual trial protocols and the government found that the basic consent form was often difficult for patients to understand last night hopkins responded with anger

we find it difficult to understand why a relatively new agency would take these draconian measures in an institution that has cared for thousands of people in clinical trials we have done clinical trials for over a hundred years here at hopkins we have had one death in all of these years in a human healthy volunteer for OHRP to take this measure and not understand the consequences on patients that are treated here cannot be understood by me at all hopkins is not the first university to be punished for safety lapses in recent years several other universities including the University of Pennsylvania and Georgetown University have been sanctioned by the government and because of broader concerns the National Bioethics Advisory Commission recently recommended an overhaul of safeguards to protect human research

for more we turn to Dr. Edward Miller Dean and CEO of Johns Hopkins Medicine at Johns Hopkins University and Ernest Prentice associate vice chancellor for academic affairs and regulatory compliance at the University of Nebraska Medical Center Dr. Miller now that the HHS investigation is complete and their report has been issued and you've also issued your own findings what happened well OHRP issued their findings on Thursday at noon and essentially there was no process in place to address the issues I contracted the Secretary Health Education Welfare Tommy Thompson he responded to me this morning we now have a process in place where OHRP in hopkins are working diligently tonight as a matter of fact to have a corrective action in plan that will

allow full accreditation of Hopkins research very shortly well given what the government body had to say about your institutions work in this research project and what your own internal investigations have turned up what can you tell us about how Ellen Roche died well we're not quite sure the cause and effect of Ellen's death to be quite truthful number one the investigation has not been completed we still not do not have all the studies while it was causally related time-wise we don't totally understand the mechanism of her death we did everything to save this young woman's life and she was part of a human volunteer study we will have an external review group that will commence its work on Sunday night of this week and they will finalize their report within the next couple of weeks and get back to us on that vice chancellor apprentice you've seen some of the

documents involved in this case and you've overseen research projects yourself was this an appropriate action on the part of the Department of Health and Human Services well I also serve as a compliance consultant to OHRP and I've been on 10 four-cause compliance site visits 20% of which have resulted in shutdowns so the action taken by OHRP is consistent with the kinds of actions they have taken in the past at institutions where they felt that there were deficiencies in their program for protection of human subjects but when you find a flaw like this in one particular research project why not just shut that one down why closed down the entire range of work that an institution is doing well when OHRP investigates an allegation of noncompliance they also evaluate the entire program for protection of human subjects more or less the allegation of noncompliance kind of

opens the door for a much wider systemic evaluation of an institutions program and that is what OHRP did at Johns Hopkins as they have done at other institutions so a Johns Hopkins program was shut down not necessarily because of the unfortunate death but because of the deficiencies identified by OHRP in that program Dr. Miller let's look at the particular case of this asthma research a compound was introduced to several test subjects bodies not to test that compound necessarily if I understand this right but to cause a reaction which would help you understand the way the body works better was there a problem with using this particular substance well this substance had been used in the past in the 1950s to treat patients with severe hypertension given both orally and intravenously the substance itself had been given to

20 volunteers subjects at four different institutions to look at lung studies and there's a vast literature in Russia for example using this drug to control hypertension so this was not a substance that was totally unknown it was taken off the market in 1972 by the FDA and it was taken off the market not because of complications but because there were new and better agents that could lower blood pressure but hexamethonium was not approved by the FDA for the use that you were using it for at Johns Hopkins by calling in a medication in the consent form did you perhaps create an impression in your volunteers about what was about to happen to them that you may do differently today well I'm not quite sure what Ellen thought when the word medication was used certainly it had been a medication in the past and because of regulatory issues was no longer a medication

and was a chemical but this whole area of medications that become chemicals and what substances do and do not need new drug approvals is really a very muddy area and one that we and other institutions have sought to find some clarity about well Vice Chancellor Prentice maybe you can help us out a little bit there when you're using something in what's called a challenge study that is introducing a substance to get a reaction is there a different kind of protocol a different kind of set of rules from when you are using something that is in itself being explored as a treatment or a therapy well in terms of the application of the regulations there really is no difference we would characterize the protocol that Ellen was enrolled in as a non-therapeutic research protocol meaning that there is no direct benefit to the individual

subject and when someone is involved in a test of that kind when they are subjecting themselves to something from which they are likely to derive no benefit is there a different set of rules at play there from let's say sick people who are trying experimental procedures in the hopes of getting well well the rules are really not different the IRB must determine that there is an acceptable risk benefit relationship uh of the research and basically it means that the societal benefit in terms of an advancement of knowledge must at least outweigh or balance the risk associated with the research and on the other hand in therapeutic research or clinical research there's often benefit to the patient that can help balance out the risks and from what you know about this case do you think the risk benefit ratio was in proper relationship yeah that's difficult for me to say I have read a fair amount of material

on the case but I have not read the protocol certainly there was an allegation of an inadequate assessment of risk on the part of the investigator and the IRB that's obviously a problem when you use volunteers Dr. Miller is there really any way that you can fully inform them of every possibility every downside that might occur in a clinical trial can we reduce risk to zero well I think everybody's goal would be to try to reduce it to zero but human variability will probably not allow us to do that as an anesthesiologist for example I give drugs to people I'm not quite sure what the reaction is going to be because everybody is a little bit different I try to minimize the risk but I cannot be 100% sure that I have minimized it to zero the important thing in this case I think is that 10 million people in this

country have asthma is a condition that is getting worse all the time and importantly hundreds of people in this country die from asthma every year so if you're looking at perhaps a pause in this work rather than a complete cessation might it provide the necessary breather to get things in order that you need to get in order at Johns Hopkins I mean is there some work that you can do during this suspension that might work to the benefit of future patients well as I said we are probably more concerned about the welfare of patients than anyone we're the ones who care for those patients on a daily basis and patients come to us for it we will comply fully with the OHRP to try to make sure any of the issues that they have with us are resolved as quickly as possible I will point out however that on October 3rd the OHRP sent us a letter addressing some of their concerns

we set up a second IRB group to review protocols we did a variety of things and we responded in writing to them in December 28 and we assumed from our December 28 letter that we were fully compliant it was a little bit surprising that in seven months we have not heard from them that they did not feel that we were doing an adequate job in protection of human subjects those IRBs or institutional review boards are made up of people who work at Hopkins they are made up of some people that work at Hopkins but also there's lay public involved do you think that they are uniformly able in the various institutions that they're working in across the country to do the work that they are charged to do or might the IRB system need a look well I think we all would agree that the IRB systems could be looked at across the country at all places that are doing clinical research and I think probably the best thing that can come out of this

would be for academic health care centers partnering with the FDA and with OHRP to develop more clear-cut guidelines about how and where we need to go to improve the safety for patients and Vice Chancellor Prentice on that same subject is this a Hopkins problem or a problem that we see with the system with research oversight no it's it's not a Hopkins problem it's a universal problem we know from a number of different studies that IRBs have been chronically overloaded and under-resourced so there is a problem out there I think it's gradually being corrected but it's going to take some time there are currently plans to have an IRB accreditation system in place however we're talking about thousands of IRBs potentially being accredited so it's going to take some time to develop the infrastructure to accomplish that goal and in the meantime does does work the kind of work that was being done on asthma at Johns Hopkins does that have to slow down or

stop can we do this while the car is rolling sort of repair it on its way well I think that what Johns Hopkins has to do is they have to negotiate with OHRP in terms of of corrective actions on their part there were a number of deficiencies identified in the IRB or in the OHRP determination letter and it's up to Hopkins to come up with a corrective plan that would be acceptable to OHRP and I would be hopeful that they could get their research program up and running I mean clearly they are a world-renowned institution and it's very important to them and to all of the patients they serve to be able to get their research program up and running conducted under the jurisdiction of a state-of-the-art program for protection of human subjects and Dr. Miller do you think that you can be back in business quickly? Well I certainly do and I think we do have an excellent program we can always make improvements we will strive to make those improvements

but again I think it has to be recognized we have treated literally thousands of patients on your protocols here at Hopkins we have had one death in one human healthy subject in over a hundred years of study a pretty good track record not perfect I wish it were perfect but we do take it very seriously the safety and welfare of patients that come to us gentlemen thank you both thank you very much again the other major story of this Friday violent protests broke out as the economic summit opened in Genoa Italy one demonstrator was killed we'll see you online and again here Monday evening have a nice weekend I'm Jim Lara thank you and good night major funding for the news hour with Jim Lara has been provided by imagine a world where no child bakes for food while some will look on that as a dream others will look long and hard

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You You Good evening, I'm Jim Lara. On the news hour tonight, a general summit look at the state of the world's economy. Political analysis by Mark Shields and Paul G. Go.

And the story of the human testing tragedy that caused a cut-off of federal research funds at Johns Hopkins. It all follows us on Maria the news this Friday. Major funding for the news hour with Jim Lara has been provided by Imagine a world where we're not diminishing resources. We're growing with ethanol, a cleaner burning fuel made from corn, and by the corporation for public broadcasting. This program was also made possible by contributions to your PBS station from viewers like you. Thank you.

Violent protests broke out today as the economic summit opened in Genoa, Italy. Thousands of people threw fire bombs and stones and police fought back with clubs, water cannons and tear gas. One demonstrator was killed, Italy's interior minister said police apparently shot him in self defense. Dozens of officers and protesters were injured. Inside the meetings, President Bush and the other leaders of the industrialized nations announced a new global AIDS fund and pledged $1 billion for it. The political turmoil in Indonesia took a dramatic turn today. The top legislative body announced impeachment proceedings against President Wahid. They would begin tomorrow. They said 11 days early. He had threatened to begin ruling by decree July 31st in the world's fourth most populous nation. The head of the legislature said it would demand Wahid answer charges of corruption and incompetence next week. This will be a very, very significant and decisive political development of this country because I know that people have been very anxious to see the holding of the spaces.