The NewsHour with Jim Lehrer

MARGARET WARNER: Good evening. I'm Margaret Warner. Jim Lehrer is on vacation. On the NewsHour tonight: Our summary of the news; then, today's Supreme Court decision supporting property seizures for development; heated exchanges on Capitol Hill over U.S. policy in Iraq and how a top Iraqi official sees it; a preview of tomorrow's election in Iran; and a conversation with U.S. Trade Representative Rob Portman.

NEWS SUMMARY

MARGARET WARNER: A divided U.S. Supreme Court today expanded the power of local governments to seize homes and businesses. By a 5-4 vote, the court said government could invoke the power of eminent domain to take property to make way for private develop that would serve a public good. Property owners in New London, Connecticut had argued the power should be reserved for roads, schools and other public projects. The city attorney, Tom Londregan, hailed the decision.

TOM LONDREGAN: This case was never about the taking of property from one person and giving it another this case was not some type of a land grab. This case was about the city of New London, its six square miles and its economic survival.

MARGARET WARNER: A lawyer for the New London homeowners whose property is at issue vowed to continue their fight. We'll have more on this story right after this News Summary. The top U.S. commander in the Middle East said today the Iraqi insurgency has not been diminished in recent months. Army Gen. John Abizaid told a Senate hearing that the insurgency's strength, overall, is about the same as six months ago. That contradicted Vice President Cheney who said last month, "They're in the last throes of the insurgency."

Also at today's hearing, Defense Secretary Rumsfeld insisted Iraq was not a quagmire, and he said it would be a mistake to set a timetable for leaving. We'll have excerpts and also hear from the Iraqi prime minister's spokesman later in the program.

In Iraq today, suicide car bombings in Baghdad killed at least 15 people and wounded 28. Another wave of car bomb attacks late Wednesday killed 23. Also today, al-Qaida announced a top Saudi terrorist was killed in a USAir strike near the Syrian border.

U.S. and Afghan forces battled dozens of Taliban rebels for a third day in Southern Afghanistan. Afghan officials said the coalition troops, backed by air strikes, have killed more than 100 militants.

United Nations human rights investigators today urged the U.S. Government to give them access to detainees at Guantanamo Bay, Cuba. They said they've received credible allegations of torture, degrading treatment and other abuses from unnamed sources and declassified government documents. The investigators said they cannot make judgments about the allegations unless they can see the prisoners. A U.S. spokeswoman said the request is under review.

British Prime Minister Tony Blair told the European Union today it must reform itself. His speech to the European parliament came in the wake of failure to approve an EU budget and mounting trouble for the proposed EU Constitution. We have a report from Juliet Bremner of Independent Television News.

JULIET BREMNER: On a European crusade, Tony Blair strode into Brussels preaching his new vision. He sees a modern, competitive economy, while promising not to wreck a much-loved way of life.

TONY BLAIR: I'm a passionate pro- European. I always have been. (Audience reacts mixed)

JULIET BREMNER: The jeers didn't deter him from pushing on with his central demand for radical reform.

TONY BLAIR: This is not a time to accuse those who want Europe to change of betraying Europe. It is a time to recognize that only by change will Europe recover its strength, its relevance, its idealism, and therefore, its support amongst the people.

JULIET BREMNER: And he believes they must act quickly. Countries like China and India are already putting the squeeze on Europe, with cheaper goods and better- qualified graduates, forcing Europe out of the global marketplace.

It was a stark warning: You can't hide from globalization, otherwise you will fail spectacularly. What Tony Blair seems to be urging Europeans to do is to spend less time in cafes like this, and more time at work. Only that way, he thinks, will they be able to afford the lifestyle they so clearly cherish.

Mr. Blair's in the driving seat, but he has just six months to steer Europe in his preferred direction.

MARGARET WARNER: Britain assumes the rotating EU presidency in July. A Mississippi judge sentenced a former Ku Klux Klansman to 60 years in prison today, in the killings of three civil rights workers in 1964. Edgar Ray Killen, now 80 years old, was convicted of manslaughter on Tuesday. Today the judge announced he would impose the maximum sentence, despite Killen's advanced age. Killen's attorney has said he will appeal.

A state-owned Chinese company offered to buy the American oil company UNOCAL today for $18.5 billion. It would be the largest foreign acquisition yet by a Chinese company. At a Senate hearing today, Oregon Democrat Ron Wyden insisted that Treasury Secretary Snow invoke a federal law to review the deal, and snow responded:

JOHN SNOW: The parties to that particular transaction involving a foreign purchase of a U.S. Company that could have security implications, files for the review.

SEN. RON WYDEN: I would only tell you, Mr. Secretary, if you don't review this one, that law is meaningless. Those of us that consider ourselves free traders have got to be aggressive in terms of using the existing tools on the books.

MARGARET WARNER: UNOCAL's board had already accepted a bid of $16.6 billion from a U.S. firm, Chevron. It said today it would evaluate the Chinese offer. Stocks fell sharply as oil prices surged again. The price of crude hit $60 a barrel in New York, before closing at $59.42.

On Wall Street: The Dow Jones Industrial Average lost 166 points to close at 10,421; the NASDAQ fell 21 points to close at 2070. The Corporation for Public Broadcasting chose a new president. Patricia Harrison is a former co-chairman of the Republican Party. She's now assistant secretary of state for educational and cultural affairs. Democrats criticized the choice, which came amid allegations of political pressure on public broadcasting.

Also today the House voted to restore a 25 percent cut in federal funding to CPB when was recently adopted by a House committee.

And that's it for the News Summary tonight. Now it's on to: The Supreme Court on seizing property; heated words over Iraq; an Iran election preview; and a conversation about trade issues.

FOCUS - SEIZING PROPERTY

MARGARET WARNER: Jeffrey Brown looks at today's Supreme Court decision.

JEFFREY BROWN: On the one hand: The rights of property owners to keep their homes. On the other: The ability of local government to take action to revitalize a community. In a closely watched case that literally hit people where they live, a sharply divided Supreme Court today decided in favor of local government. Here to tell us about it is our regular court watcher, Jan Crawford Greenburg of the Chicago Tribune.

Welcome, Jan. The local government in question is New London, Connecticut. Tell us the facts of the case.

JAN CRAWFORD GREENBURG: Sure. This case came about 1998 when New London approved a redevelopment plan of about 90 acres next to a new Pfizer research facility. It was wanting to expand its tax base and add jobs, so to approve this redevelopment project that included a hotel and office building, housing, open space, even space for a museum. So it set up this development corporation. It authorized the corporation to buy up all this property and parcels to negotiate with the homeowners, and then it gave the corporation authority to go in and condemn the land of people who wouldn't sell, to actually take the property, pay them the fair price, and proceed with the redevelopment project. A group of nine of the homeowners protested. They sued to block the redevelopment corporation and the city from taking their property. They said the city had no right to come in and take their property and that that violated the Constitution's Fifth Amendment.

JEFFREY BROWN: So it went to the court. The court today, a slim majority decided in favor of the local government, on Fifth Amendment grounds.

JAN CRAWFORD GREENBURG: That's right.

JEFFREY BROWN: Tell us what their reasoning was.

JAN CRAWFORD GREENBURG: Well, let's talk about the Fifth Amendment, first. Of course the Fifth Amendment says that government may take private property for public use with just compensation.

JEFFREY BROWN: And this is a -- public use is the key phrase here.

JAN CRAWFORD GREENBURG: Right, this case turned on what's public use. The homeowners in New London, Connecticut, said this is not public use. I mean, we get public use if we're talking about a school or wastewater treatment plan, a utility line going in, or a railroad. But this is a private redevelopment project. This is a hotel and office building, put up by private developers, and that's not a public use, and so, therefore, under the Fifth Amendment, the government can't come in and take our property. That was their argument, but the Supreme Court today rejected that argument. They said they've always considered public use to be a more broad term. They look back over cases dating back fifty, seventy-five, one hundred years, and said that this is constantly been the way the court has looked at public use.

Just because a private company may be developing the land doesn't mean that it might not have a public purpose. And here, the public purpose was to redevelop the land, to expand the tax base, and that was this part of a comprehensive redevelopment effort. So, therefore, the court needed to give deference to the local government, which had decided that it was for the public good to do this redevelopment project.

Now, the court said, look, this isn't like -- and of course we recognize that, you know, you can't go in and take, you know, your property and give it to me. I mean, you don't take private property from one person -

JEFFREY BROWN: Right.

JAN CRAWFORD GREENBURG: -- and give it to another person. We know that's off limits.

JEFFREY BROWN: It's defining private property in a public sense.

JAN CRAWFORD GREENBURG: In public use.

JEFFREY BROWN: And traditionally, the takings clause did apply to things more traditionally -- more traditional uses would be railroads, hospitals, things that we can easily say are public use.

JAN CRAWFORD GREENBURG: That's right, but the court said, you know, economic redevelopment has long been a function of the local governments, and there were cases that paved the way for the development of the West. the irrigation lines, and the railroad lines that were put in through the use of taking and eminent domain by governments. Courts had approved those uses many, many years ago.

JEFFREY BROWN: Now, there was a strong dissent by Justice O'Connor who said this goes way too far.

JAN CRAWFORD GREENBURG: This was a very sharp and harsh dissent by Justice O'Connor joined by the Chief Justice, Justice Scalia and Justice Thomas, and she said that today the court decision made all property fair game for local governments, that the specter of condemnation hung over every piece of private property, that from now on a Motel 6 could be replaced by a Ritz Carlton, a home could be replaced by a shopping mall, a farm replaced by a factory. She --

JEFFREY BROWN: Pretty scary language actually --

JAN CRAWFORD GREENBURG: Very strong language. Today's opinion by the court she saw as a dramatic departure from these old cases that the majority in Justice Stephens' opinion referred to. Justice Thomas, by the way, wrote a separate dissent, and he said that today's ruling would fall the hardest on the poor and the minorities, the people who have long been displaced by what he called the so-called urban renewal projects that compensation by a government can't make up for the humiliation of being driven, literally, from your home.

JEFFREY BROWN: Now, we always want to look at wider implications. So where does this leave the argument? I guess the issue is how broad an application does this have?

JAN CRAWFORD GREENBURG: Justice Stephens in his majority was careful to reject the -- as he called it -- the parade of horribles that Justice O'Connor and Justice Thomas talked about in their dissent.

Throughout the majority's opinion the court is very careful to say -- as I said earlier, this isn't a case where the government is taking my property and giving it to you--

JEFFREY BROWN: Government still has to prove some kind of public good.

JAN CRAWFORD GREENBURG: Right, that this is part of a carefully thought out, carefully planned, a comprehensive redevelopment scheme. That clearly had demonstrated they were very public and important public uses for that property. So the majority said that today's decision is not a major change, that they're just reaffirming the long view that governments can act for the greater good.

JEFFREY BROWN: I understand a number of states have put in place protections for property owners. Is that where this all goes now, to the states?

JAN CRAWFORD GREENBURG: The Institute for Justice, the group that has really spearheaded this effort to get greater protection of property rights, an attorney I spoke with today said that's where the battle now will shift.

The majority opinion also says that states are free and notes that several states have already passed greater protections for private property. So we will see those battles unfolding in the states as well.

JEFFREY BROWN: Let me ask you before we go, it was announced that Monday will be the final day of the court. That shapes up to be potentially a very big day.

JAN CRAWFORD GREENBURG: That's right. Of course the last day of the term is always a big day. This year we're waiting on a number of important cases, including the 10 Commandments, whether or not public government can display 10 Commandments on public property.

But the reason most people, I think, will be watching the court on Monday morning, the reason the courtroom will be packed on Monday morning is because everyone is awaiting word from the Chief Justice whether or not he will step down as has been widely speculated. As you know, he's ill from thyroid cancer. So if the Chief Justice is going to announce from the bench that he will retire, we will hear that on Monday morning.

JEFFREY BROWN: Widely speculated, but nothing certain.

JAN CRAWFORD GREENBURG: That's right. And, the chief is -- has been widely speculated that he would retire before, and--

JEFFREY BROWN: It hasn't happened yet.

JAN CRAWFORD GREENBURG: Still 19 years as Chief Justice.

JEFFREY BROWN: We'll see what happens. Jan Crawford Greenburg thanks a lot.

JAN CRAWFORD GREENBURG: You're welcome.

FOCUS - STRATEGY CLASH

MARGARET WARNER: Now the state of play in Iraq: We start with a report on today's Senate hearing from Kwame Holman.

KWAME HOLMAN: The hearing began with smiles, but quickly turned serious and at times even contentious, as Defense Secretary Rumsfeld and his top generals responsible for fighting the war testified before the Senate Armed Services Committee. In response to growing congressional calls for setting a timetable for U.S. troops to leave Iraq, they all said that would be a bad idea.

DONALD RUMSFELD: When can the coalition leave, and should Congress establish a deadline to withdraw? Some in Congress have suggested that deadlines be set. That would be a mistake.

KWAME HOLMAN: The chairman of the Joint Chiefs:

GEN. RICHARD MYERS: Leaving before the task is complete would be catastrophic, not only for Iraq, but also for the overall struggle against violent extremism and for our national security.

KWAME HOLMAN: Michigan's Carl Levin, the committee's ranking Democrat, said the administration continued to paint too rosy a picture of the situation in Iraq.

SEN. CARL LEVIN: Our men and women in uniform are serving with great honor. They deserve an objective assessment of the situation in Iraq, they deserve a clear layout of the next steps there; they're not getting either from the administration. Instead a repetitious bugle, things are going well, stay the course. The vice president said on Memorial Day insurgency is in its "last throes." But the fact is that the insurgency has not weakened.

DONALD RUMSFELD: You raised the question of the vice president's remarks about the last throes. You, yourself, and I, both, have emphasized the importance of progress on the political side. The enemy knows that as well, and they know that if a democracy is established with a permanent government on their constitution, in Iraq, that they have lost a great deal. And I don't doubt for a minute but that they will respond to that challenge and recognize how important it is for them not to lose. And in these final months between now and that constitution drafting and the election, they may very well be in their last throes by their own view because they recognize how important it will be if they lose and in fact a democracy is established.

So, I think that those words, while I didn't use them and I might not use them, I think it's understandable that we can expect that kind of response from the enemy.

KWAME HOLMAN: The commander of U.S. forces in the Middle East offered his own view.

GEN. JOHN ABIZAID: I believe that there are more foreign fighters coming into Iraq than there were six months ago. In terms of the overall strength of the insurgency, I would say it's about the same as it was.

SEN. CARL LEVIN: So you wouldn't agree with the statement that it is in its last throes?

GEN. JOHN ABIZAID: I don't know if I would make any comment about that other than to say that there is a lot of work to be done against the insurgency.

KWAME HOLMAN: Arizona Republican John McCain said the U.S. had to see its commitment through.

SEN. JOHN McCAIN: There are some signs of progress that should be encouraging to us, and I share your view that we have to stay the course. And the worst thing we could do would be to set a time or date of withdrawal of U.S. troops until the Iraqi military is able to take over those responsibilities of ensuring the security and safety of the Iraqi people as they transition to democracy.

KWAME HOLMAN: Senators from both parties directed strong words at Secretary Rumsfeld, none more blunt than those of Massachusetts Democrat Edward Kennedy.

SEN. EDWARD KENNEDY: Secretary Rumsfeld, you know we are in serious trouble in Iraq, and this war has been consistently and grossly mismanaged. And we are now in a seemingly intractable quagmire. Our troops are dying, and there really is no end in sight. You wrongly insisted after Saddam fell that there was no guerrilla war even though our soldiers continue said to be killed. In June 2003 you said the reason I don't use the phrase "guerrilla war" is there isn't one. You wrongly called the insurgents dead-enders. But they're killing Americans, almost three a day, and Iraqis with alarming frequency and intensity. You wrongly sent our service members into battle without the proper armor. So you basically have mismanaged the war and created an impossible situation for military recruiters, and put our forces and our national security in danger.

Our troops deserve better, Mr. Secretary. I think the American people deserve better. They deserve competency and they deserve the facts. In baseball it's three strikes, you're out. What is it for the secretary of defense?

DONALD RUMSFELD: Well, that is quite a statement.

First let me say that there isn't a person at this table who agrees with you that we're in a quagmire and that there is no end in sight. From the beginning of this, we have recognized that this is a tough business. It is difficult, that it is dangerous, and that it is not predictable; third, the issue of a guerrilla war, I mean, my goodness, I don't think it's a guerrilla war. You may think so. I don't know if anyone at this table thinks so.

I did call them dead-enders. I don't know what else you'd call a suicide bomber. What is a person who straps a vest on themselves, walks into a dining hall, kills themselves and kills innocent Iraqi people or innocent coalition soldiers? I will say that the idea that what's happening over there is a quagmire is so fundamentally inconsistent with the facts.

The reality is that they are making political progress without question. The reality is that the American forces that are training and equipping and mentoring the Iraqi security forces are doing a darn good job, and the number so I think I must say that I think the comments you made are certainly yours to make, and I don't agree with them.

SEN. EDWARD KENNEDY: Well, there have been a series of gross errors and mistakes. Those are on your watch. Those are on your watch. Isn't it time for you to resign?

DONALD RUMSFELD: Senator, I've offered my resignation to the president twice, and he has decided that he would prefer that he not accept it, and that's his call.

KWAME HOLMAN: Republican Lindsey Graham from South Carolina said he supports U.S. efforts in Iraq but worried about overall support at home.

SEN. LINDSEY GRAHAM: I'm here to tell you, sir, in the most patriotic state I can imagine, people are beginning to question, and I don't think it's a blip on the radar screen. I think we have a chronic problem on our hands. And if you disagree, I certainly respect that.

DONALD RUMSFELD: Well, that's the time the leadership has to stand up face the truth, if you are facing a head wind you have got two choices: you can turn around and go downwind or you can stand there and go into the wind. And that is what needs to be done. And we've got leadership capable of doing that, let there be no doubt.

And I think the American people have a good center of gravity, I think they have inner gyroscopes that may tilt from time to time but they get re-centered.

KWAME HOLMAN: And Democrat Evan Bayh of Indiana wanted a way to measure U.S. successes in Iraq.

SEN. EVAN BAYH: In an insurgency that may go on in some form for a considerable period of time, when do we determine the countryis stable enough -- no longer a threat to its neighbors, not a haven for terrorist for which to threaten the rest of the world? So my first question is how do we define success. And my second question would be what benchmarks do we look to?

DONALD RUMSFELD: If this does go on for four, eight, ten, twelve, fifteen years -- whatever -- and I agree with Gen. Myers, we don't know -- it is going to be a problem for people of Iraq. They are going to have to cope with that insurgency over time.

The success will be a single country, a moderate regime that is respectful of the various elements within it, even if there is a low level insurgency that continues at three hundred or five hundred or whatever the number may be, but that they have the people that can cope with that and that they're not attacking their neighbors. And they're not giving $25,000 to suicide bombers' family after they go out and kill innocent men, women, and children as Saddam Hussein was.

KWAME HOLMAN: After the Senate hearing ended, Secretary Rumsfeld and the generals headed to a meeting of the Armed Services Committee counter-part on the House side of the Capitol.

MARGARET WARNER: Now, an official Iraqi view of the situation. We get that from Laith Kubba, spokesman for Iraq's prime minister, Ibrahim al-Jaafari. A Baghdad native, Kubba recently returned to Iraq from an exile in London and Washington. He's in Washington now with Prime Minister al-Jaafari who met today with Vice President Cheney and others in the administration and on Capitol Hill.

And, Mr. Kubba, welcome.

There's a growing debate in Washington about whether it's time for the U.S. to establish sometime table of withdrawing from Iraq. Would you be in favor of that? Would your government be in favor of that?

LAITH KUBBA: I think the concept of a timetable is misleading. It should be linked very much to conditions and to performance of the ability of Iraqi institutions, police, to perform and fill the gap.

Otherwise, if there is premature withdrawal, before the Iraqis can run the show properly, then you're leaving the stage open for terrorist networks who are not simply going to operate in Iraq, but they're going to make Iraq their base for operations worldwide.

MARGARET WARNER: Well, now, up till now, the president has said the benchmark for leaving will be when the Iraqi forces can maintain stability on their own. How long do you think that will be?

LAITH KUBBA: I cannot put a time to it, but I know for sure, there are increasing number of Iraqi police and army soldiers being trained. There are institutions and academies being set up in Iraq today, training them all the time. They are receiving severe blows from terrorists; hundreds of them have been killed in the last year, but there is still very high number of people lining up, queuing up to join the police force.

So I cannot really tell you when this is going to be. It depends on many factors, not simply about the number of police being trained.

MARGARET WARNER: U.S. commanders in the field have told members of Congress who have been out there in Iraq that it could take up to two years. Why do you think it is taking so much longer to train an effective Iraqi force than the Pentagon originally estimated?

LAITH KUBBA: Training is not the only factor. It's not simply about putting trained police on -- in the field. The political conditions in the country is another factor. Now we have a political process that seems to be successful; hopefully, this is going to reduce the time needed to make the police force effective on the street. The police -- the Iraqi police do not function in abstract. They function in a society. Unless they get the full backing from all elements of society, they cannot perform their jobs. So it's not simply about training police. It's also linked to the political process.

MARGARET WARNER: Let me ask you about the insurgency. Vice President Cheney famously said recently that he thought the insurgency was in its last throes.

First of all, when the prime minister met with him today, was the vice president as confident of that in private as he was in public three weeks ago?

LAITH KUBBA: Well, I'm not very sure about the background to all this, but I can tell you that the insurgency have lost all the moral and political arguments they used to hide behind.

After the elections, now they're left exposed out there. And their terrorism has become so random and ill-defined that they've lost support from any part of the Iraqi society. In the past they used to hide behind resisting the occupation or being in favor of Sunni participation. Today, both issues are not there.

So, in a way, I think the insurgency have lost on smaller grounds, but they have not lost numbers. They are still out there. They still have networks that are effective, and they get support from outside Iraq.

MARGARET WARNER: But they certainly have not lost effectiveness. Gen. Abizaid said today, in fact, they are as strong he thinks as they were six months ago, despite the number killed, despite the number arrested and jailed.

What is your theory about why the insurgency stays as strong? What's fueling it? How much support do you think it's actually -- must be getting from the local population?

LAITH KUBBA: Well, to start with, I don't share that assessment. They're not as strong as they were six months ago. They have lost many of their outside supporters. Inside the country, the insurgency today is split. There are others who have contacted the government to say they never aimed at attacking Iraqis; they were simply resisting the occupation. They know now there is a process to ending the presence of foreign troops, and they want to be part of it.

So in a way, that is a serious split in the insurgency. Those who are left outside have no political agenda. So while they're still there out in numbers, I simply do not believe they are as strong as they used to be. They have lost sympathy, a lot of sympathy, from circles that used to be quiet about their presence.

Let me just give you a solid example: Many Salafi Wahabi religious leaders came to the prime minister to denounce terrorism and to say we do not want anybody to think we endorse it. We're just opposing it and support the political process. To me, that is a huge transformation in the politics of the country. Yet, it ought to pay us some dividends in months to come.

MARGARET WARNER: Now the Iraqi political process is another concern on Capitol Hill, judging from what was said today. Will the Iraqi politicians involved in the constitution-writing process meet the Aug.15 deadline for getting that Constitution drafted?

LAITH KUBBA: I think they will meet the deadline, maybe pending one or two sensitive issues to do with Kurdish federalism in the country. I think this is only the most serious stumbling block.

It seems to me the way the process can move ahead is to at least sign on all the items in the constitution that are not disputed, and simply postpone the elements that are disputed, put a mechanism, a procedure to go back and visit it in the future.

Constitutions evolve; they're not born perfect fromday one. And I think Iraq is no exception. The process can meet the deadline, but it will not be complete. I think they have to postpone some elements to be resolved later in the future.

MARGARET WARNER: One leading Democratic senator, the ranking Democrat on the Armed Services Committee, has suggested that the president should essentially tell the Iraqi political figures working on this, that unless it meets some deadline for getting the constitution done -- not necessarily Aug. 15, but a date certain -- that the U.S. will consider a timetable for withdrawal.

In other words, what he said was he thought -- he considers President Bush's open-ended commitment to stay -- quote, unquote -- as long as it takes, had removed pressure or incentive for Iraqi political figures from different ethnic groups to resolve their differences. Do you think that would be helpful or harmful?

LAITH KUBBA: I don't share that point of view, and I think it is going to be extremely harmful. There are networks out there who will see this as a victory and this is going to boost their morale and strengthen their operations. So I don't share that view, and I don't share the assessment that Iraqis need to be pressured to reach that agreement. Iraq needs that agreement desperately. People in Iraq are not satisfied with the way things are in the country. They want to move on, lay the foundation for a permanent peace that society can then build on and build a strong state. So I think the Iraqis have the incentive. They don't need the extra pressure from the U.S.

MARGARET WARNER: By this question I don't - what's about to come I don't mean to suggest that I think the president is about to withdraw troops or set a timetable, but as a senior member of your government, if the United States were to do that, were to set a timetable in the near term for withdrawing, what would be the effect on your government and on the situation in Iraq?

LAITH KUBBA: That would set up a different dynamic than we have currently. What we have at the moment is an attempt to build up the capacity of the police and the army as quickly as possible.

If there was to be an impression that there is going to be a vacuum, that the foreign troops will pull out of the country before these forces are complete, you will find an increased draw for militias who would be ready to fill that vacuum, and you cannot run a country or have a stable country, a modern country, based on militias. So that is going to send the country on a very bad track.

MARGARET WARNER: In either your meetings and the prime minister's meetings on Capitol Hill, since you've been here, or within the administration, did you detect a level of anxiety, though, about waning public supported here in the states for the war effort?

LAITH KUBBA: I'm aware it's an issue here in the U.S. -- my only message is to say after two years of sweating, of sacrifices, of all the blood, all the money that was spent on Iraq, does it make sense to pull out without securing a country and seeing its results? I can understand the impatience, and I understand the need to have a clear vision on how to tackle it but I totally cannot understand the logic of simply one is tired out of an assignment that took so much blood and energy and money, then just to leave it halfway there just because one is tired. It just doesn't make sense.

MARGARET WARNER: Laith Kubba, spokesman for the Iraqi government, thanks so much.

LAITH KUBBA: Thank you.

FOCUS - IRAN VOTES

MARGARET WARNER: Choosing Iran's next president. In tomorrow's runoff, Iranian voters face a choice most did not expect.

We have a report narrated by Lindsey Hilsum of Independent Television News. (Chanting )

LINDSEY HILSUM: The Festival of Fatima, an occasion for the devout to demonstrate their faith. She was the daughter of the prophet, and they mourn her still. While others push for Iran to become more secular, the most religious Iranians resent what they see as the creeping poison of western ways. They've found their champion in Mahmud Ahmadinezhad, the presidential candidate who confounded all predictions by getting nearly six million votes and a place in the deciding round of the election on Friday.

As mayor of Tehran, he's suggested that all traffic roundabouts should be turned into shrines to the martyrs killed in the eight-year-long war with Iraq. If he became president, he'd try to go back to the revolution in 1979 and make women wear the full veil, which would please those who object to bare ankles and short coats.

SPOKESMAN (Translated): I feel like they're hitting me over the head with a stick when I see something like that. I feel they're betraying me. And I'm just a simple, pious guy.

LINDSEY HILSUM: His campaign video stresses his piety and honesty. Many Iranians, it seems, like the simple style they say Mr. Ahmadinezhad has demonstrated as mayor.

WOMAN (Translated): I voted for Mr. Ahmadinezhad because he is less corrupt. I will vote for him again in the second round because he is the most decent. He's been mayor for two years, and still he drives the same Peugeot 504, and he still lives in the same house.

LINDSEY HILSUM: The Shah Abdul Azim Shrine south of Tehran. Backed by the powerful clergy and Iran's supreme leader, his campaign message is going out through the mosques and the networks of volunteer religious police, known as the Basij. They're persuading-- some say coercing-- others to vote for him. The Basij are much feared, and if Mr. Ahmadinezhad becomes president, they'll be paid, too.

MOJTABA KHODAI, Basij Commander (Translated): There will be job prospects for the Basij because of the plans that Mr. Ahmadi-Nejad has to make use of the Basij youth, and to institutionalize the ministry. This is one of the main reasons the Basij youth are voting for him.

LINDSEY HILSUM: In Iran, poverty and piety go together. The Basij come from poor backgrounds. Mr. Ahmadinezhad has a big following in South Tehran, where people's greatest worry is unemployment. As mayor, he once went to a meeting in a dustman's uniform as a sign of solidarity.

MAN ON STREET (Translated): I think he is one of us, from the weakest class of society. He can understand us. Our only problem in this country is economic, and I think, hopefully, he will be able to solve it.

LINDSEY HILSUM: It's all a big threat to the man who faces Mr. Ahmadinezhad in the run-off, 70- year-old Ali Akbar Hashemi Rafsanjani. He's immensely rich, and clearly underestimated the voting power of the poor. Now he's relying on the votes of students and others who want reform and change. Once they saw him as far too conservative, but now they see him as the only man who can save them from Mr. Ahmadinejad, who they fear would reverse all the reforms of recent years.

EMADEDIN BAGHI, Assoc. for Human Rights & Prisoners (Translated): Our vote is not a vote for Hashemi Rafsanjani, it's a vote to prevent a dangerous fascist wave erupting in the country.

LINDSEY HILSUM: Hashemi Rafsanjani has spent millions on his campaign, but Mr. Ahmadinezhad has other methods.

SPOKESPERSON (Translated): This branch of conservatives with the fascist tendency, they have strong organizations. They are not into dialogue. Even they have acknowledged that the reformists are like a car going along the motorway with no brakes. But for them nothing matters but force. Their rationale is all about the rule of force, terror and prisons.

LINDSEY HILSUM: In the village, there are only old men left. The young have gone to look for work in the city. Reform, human rights, the nuclear program, it means nothing. Here they care about water, food and shelter. They believe Mr. Ahmadinezhad when he says he can improve their lives. Friday's election is the test. By ignoring the needs of the poor, those who would modernize Iran may have lost their chance.

CONVERSATION

MARGARET WARNER: Finally tonight, Ray Suarez talks with the new U.S. Trade chief.

RAY SUAREZ: In recent months, trade issues often moved front and center for the bush administration, and it comes at a time when the United States' record trade deficit continues to grow. Some of the bigger issues on the table include a tough fight in Congress over the approval of the Central American Free Trade Agreement, or CAFTA, and the contentious relationship with China over currency and textiles.

Here to discuss those and other issues is the new U.S. Trade representative, Rob Portman. Ambassador, welcome.

ROB PORTMAN: Thank you, Ray. It's great to be with you.

RAY SUAREZ: Is the Central American free trade act up for a vote soon?

ROB PORTMAN: I think so. We've already gone through the process of mock mark-up of the legislation, so the process has begun. The vote could occur within the next week or so. It looks as though it's going to be a relatively close vote. As you know, trade is a contentious issue these days.

But the agreement is a very sound one. It's one that benefits U.S. farmers, workers, U.S. small businesses, service providers. Right now, these countries of Central America and the Dominican Republic send their products to us mostly duty free. In fact, 99 percent of agriculture products and 80 percent of their products in general come to the United States with no tariffs at all.

What this agreement does is it levels the playing field. It allows us to have the same benefits. In fact, if this agreement were to pass, 80 percent of our products, which now face tariffs would go into those countries duty free. And that's why it's a one-way deal, in many respects, for us, and it's a good deal for us.

RAY SUAREZ: So what about the opposition? They're saying there are very few protections for workers, either down there or workers who will lose their jobs here. The sugar industry has its... has its real concerns here in the United States about what CAFTA would bring.

ROB PORTMAN: Well, as I've said, trade is a contentious issue these days, and that may explain more of opposition than anything.

In terms of the agreement itself, again, it's very much in favor because it knocks down barriers of our products going to that area. We'll have a trade surplus as a result of this. Estimates are that there could be up to a $700 million trade surplus in the first year. I don't think it threatens any American workers because what Americans will do, they will have the ability to gain additional jobs by selling products down to this area. It's, therefore, different than a lot of trade agreements, frankly, that we've had in the past, and one that is really beneficial to U.S. workers.

In terms to what's in the agreement with regard to sugar that has been a contentious issue. The Central American countries were able to get a slight increase in the amount of sugar they could send to the United States. It's very little, a couple of spoonfuls per week per consumer. It results in actually less than 1.5 percent of our sugar production in this country, which is less than the annual fluctuation in our sugar program.

In addition to that, we put in place an insurance program within the agreement, which said that if the sugar does come in at higher levels-- and we think it might-- or if there's a problem with the market here, that we could actually stop them from bringing the sugar into the United States.

So it really shouldn't affect the sugar industry at all. I feel pretty strongly about that. Importantly, so does the agriculture secretary, who would be implementing the program.

But we are reaching out to those who are concerned, who are members who represent sugar beet growers, mostly in the northern Midwest, and those who represent sugar cane growers, who are mostly in Florida and Louisiana in the South. And I think we'll be able to make some progress on that even in the next few days.

With regard to labor rights and the agreement, there's a very strong provision there. I think it's the cutting edge provision, much stronger than we've had in past agreements, because it's more practical and more effective. And it will resolve, in the Central American workers, having more labor rights than they have now, and having better enforcement. We're doing things we've never done before.

We're setting up a dispute resolution system that's a modern system where we can work out any problems that arise with regard to labor rights violations. We're providing actual funding, called capacity building that will go to these countries; $20 million is reserved for this fiscal year alone, and for next fiscal year, we hope to have considerably more resources. This week, for instance, there is a bill marked up which would double that amount, to provide funding for Central America to enforce their labor laws, which everybody has agreed is the issue.

Without CAFTA being passed, those labor rights will not be improved in that way, and we will not see that kind of enforcement. So if someone is concerned about labor rights and enforcing labor rights, this is a good agreement to support.

RAY SUAREZ: There's a lot of downward pressure on wages because competitors all around the world are trying to get into the American market with the cheapest per-piece prices possible. How can a Central American worker in making sheets or towels or socks or underwear be protected in the face of that downward pressure, and so much of the momentum and trade moving to China?

ROB PORTMAN: That's a great question, Ray, and that's one of the things that I love about this agreement, is that it enables us to partner with the Central American countries, countries in our region, our neighbors, to be able to compete more successfully, including with Asian imports and imports specifically from China.

Right now if you're a worker in Central America, your job is in jeopardy if you're in the textile business, not because of the United States, frankly, but because of China. And already this year, thousands of jobs have been lost in Central America, which is one reason they're very interested in this agreement. Because under this agreement we will be able to send U.S. fabrics-- yarn, elastics and so on-- to Central America to be sewn, and sent back here as apparel. That product can go down duty free under the agreement, and can come back duty free, which enables us to have a strategic advantage and be able to compete with these less expensive, sometimes Chinese imports of textiles.

So it's a way to keep jobs in central America to be sure those people have not just jobs, but jobs that have labor rights protections, including discrimination in the workplace, child labor, and so on, and it's a way for us to keep jobs here in this country because, frankly, if we don't have that kind of a partnerships, those kind of inputs that we're able to send to Central America will not be being sent to Asia.

On average, a garment coming from Asia has less than 1 percent U.S. value added. On average, a garment coming from Central America has 71 percent U.S. value added.

So it's one of those unusual situations where it's a win-win. It enables us to keep jobs here, which is why all the major textile organizations actually endorse this agreement, which, as you know, is unusual. Normally the textile workers here in this country are very suspicious of trade agreements.

Frankly, the U.S. textile industry is under a lot of pressure, as you say, globally, now that the so-called quotas are off. But this is the one where the people representing the people who are representing textiles still in this country support the agreement because they understand the need to establish this kind of partnership to keep jobs here, and it also helps Central America.

RAY SUAREZ: Let's return to China, if we could. Right now, Chinese enterprises are selling in the United States far more than the United States sells in China, quarter after quarter. And we were told during the '90s by advocates of opening trade with China, that eventually that $1 billion-plus market would be pried open and be awash with American-made goods. It hasn't happened, has it?

ROB PORTMAN: Well, it's happened, but it hasn't happened to balance what's coming into our country. Our exports to China, as you know, have increased dramatically since that time, in 2001 when we entered into the agreement with the Chinese so they could come into the WTO.

I think our exports have gone up 88 percent, last year 22 percent alone. It's one of our fastest growing export markets. We have a surplus in agriculture trade. We send a lot of soybeans to China, surplus in services. So it's been a good market for us, and it's a fast-growing market, which is why so many, you know, American workers and farmers and small business people want to keep that market open.

But the Chinese have sent a lot more to us than we've sent to them. So while their market has opened, and it's a good export market for us, it's not good enough. And my job, as I view it, as trade representative, is not to unfairly keep Chinese products out of our market, but to be sure they play by the rules.

And playing by the rules means opening up their market even more to our products, because they have some barriers in place-- some are tariff barriers, some are non-tariff barriers-- and then being sure that that aren't stealing our intellectual property, which is a big reason, I think, that we have this trade imbalance with China, and then finally, being sure that their imports into our country are fair.

RAY SUAREZ: So let me make sure I understand you. Your general preference would be not that Chinese enterprises sell less here, but that American producers sell more there in order to close the gap.

ROB PORTMAN: Well, that's accurate, except to say that to the extent what they're selling here is not being sold fairly here, in other words, not by the international trading rules that were set up under the World Trade Organization, and by their accession agreement, that they should not have the right to access to our market.

So the general response to China, I think, ought to be, you know, they need to play by the rules, both ways. They need to open their market more to our products. They need to be sure that they're abiding by the intellectual property rules that the rest of the world needs to live by as well, including Russia and other countries that have problems-- protecting intellectual property, copy rights, trademarks, patents, our movies, our recordings, our intellectual property that goes along with manufacturing processes-- that's not being protected now in China, and it's a big loss to American business.

And then second, that to the extent the imports are coming into here, we ought to be sure that they're not unfairly subsidized, to be sure they live by the rules. You mentioned textiles earlier. As you know, we have invoked a couple of textile provisions to keep Chinese textiles from surging in our market. In some cases, some sectors have gone up as much as 1,500 percent in the last year-- I'm sorry, in this year alone. That is why we have invoked some of these so-called safeguards under the Chinese WTO accession, dating back to 2001.

And I think that's fair, and I think that's how we ought to be dealing with the deficit we currently have with China. We should be doing even more in terms of our exports, by them opening up their market, and we should be sure that their imports to our countries are fair.

RAY SUAREZ: If you go into an American big-box retailer, you're often hard-pressed to find anything to buy made in the United States. Will that hundreds of billions in trade deficit per quarter narrow? Can it be shrunk? Can it be closed?

ROB PORTMAN: I think it can be narrowed, and it can be narrowed simply by changing, as I said earlier, that formula between imports and exports so we can expand our exports.

We are the most open big free country in the world. We have the largest market in the world. You're right, when I go to the Wal-Mart back home-- and I still go home on the weekends to Ohio-- I see a lot of Chinese products. I don't see a lot of American products, and what I think we ought to be telling the Chinese, which I have done already in person-- I think we need to continue to do so-- is that we want to see them open their markets just as we've opened our market to their products. The trade deficit is more complicated, though, than just imports and exports. It has to do with macro economic factors.

Every economist I talk to has a little different formulation of it, but basically it's that the U.S. economy is doing very well. We are the fastest growing industrial economy in the world right now. The economies of Japan and Europe are not growing as fast, so we don't have the export markets we should have.

Finally, we aren't saving as much as we should in this country. And believe it or not, that relates to trade, because by having a relatively low savings rate and buying more, we're going to have, unfortunately, some trade deficits continue. So we need to do three things: One, is we need to increase our exports, and I think that's something that, again, as trade representative, ought to be my top priority. Second, be sure imports are fair. And third, we need to adjust some of these macro economic factors by encouraging other countries to grow more and by saving more as Americans so we can reduce that trade deficit.

We have a lot to be proud of. I mean, one reason we have a trade deficit, again, is our economy is strong. We have 5.1 percent unemployment now, which is historically very low. We have growth at over 3.5 percent, which is historically high. And, you know, we are a country that is absorbing, therefore, a lot of imports, and we're getting the benefit of having lower prices as a result of that.

RAY SUAREZ: Well, there's a lot of things we can't get to tonight, but I hope you come back.

ROB PORTMAN: Well, Ray, thank you.

RAY SUAREZ: Rob Portman, thanks a lot.

ROB PORTMAN: Always great to be with you.

RECAP

MARGARET WARNER: Again, the major developments of the day: The U.S. Supreme Court, on a 5-4 vote, expanded the power of local governments to seize homes and businesses. The top U.S. Commander in the Middle East said the Iraqi insurgency has not been diminished in recent months. On the NewsHour tonight the Iraqi prime minister spokesman disputed that. And late today the Food & Drug Administration approved FiDil to treat heart failure in blacks. It's the first drug directed at a specific racial group.

RECAP

MARGARET WARNER: And again, to our honor roll of American service personnel killed in Iraq. We add them as their deaths are made official and photographs become available. Here, in silence, are 12 more.

MARGARET WARNER: We'll see you online and again here tomorrow evening with Thomas Oliphant and Rich Lowry, among others. I'm Margaret Warner, thanks for being with us. Good night.