The NewsHour with Jim Lehrer

JIM LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight, Margaret Warner looks at the causes and effects of today's federal reserve's interest rate hikes; Ray Suarez updates the EgyptAir crash mystery; Gwen Ifill, keyed to the Decatur, Illinois, story, explores coping with student violence; and Elizabeth Farnsworth explores the unexpected success of a musical group from Cuba. It all follows our summary of the news this Tuesday.

NEWS SUMMARY

JIM LEHRER: The Federal Reserve raised two key interest rates today. Both the Federal Funds rate on overnight loans, and the discount rate to banks were upped a quarter-point. A statement said the action was taken to discourage inflation. We'll have more on the story right after this News Summary. Stocks typically head lower when rates are raised, but today they rallied on the news. The Dow Jones Industrial Average closed up 171 points at 10,932. The NASDAQ Index was up 73 at 3293, another record for NASDAQ. Federal officials were deciding today how to pursue the EgyptAir crash investigation. It's been in the hands of the National Transportation Safety Board, but there were plans for the FBI to take it over and treat the crash as a crime based on new evidence provided by the cockpit voice recorder. We'll have more on this story later in the program tonight. President Clinton promised more U.S. aid to earthquake survivors in Turkey today. He visited a camp for some 9,000 people left homeless from the august quake that killed 17,000. The tent city was put up by U.S. Marines. It's about 45 miles from the epicenter of the latest earthquake, which struck last Friday. Nearly 600 people were killed then. Mr. Clinton said America would continue its assistance.

PRESIDENT CLINTON: We, in the United States, will do everything we can to help you until your lives return to normal. And we will help those people in the area hit by the most recent earthquake. We will stay with you and work with you, and I just want to urge you to keep your spirits up, keep the smiles on your children's faces, keep helping the people who lost their loved ones in the earthquake, and know that together, we will get through this to better days.

JIM LEHRER: The President is in Turkey for a summit meeting with 50 world leaders on European security which begins on Thursday. It will include talks with Russian President Yeltsin on the conflict in Chechnya. Back in this country, new versions of five- and ten-dollar bills were made public today. They will go into circulation next year. They have larger, off-center portraits of Abraham Lincoln on the five-dollar bill, and Alexander Hamilton on the ten. The larger portrait allows for more detail, and for a watermark that makes the bills harder to counterfeit. There were more protests today in Decatur, Illinois, over the expulsion of six black high school students. The Reverend Jesse Jackson and four others were arrested when they tried to enter a high school grounds. They had failed to convince officials to reenroll the students. They were expelled for allegedly taking part in a fight at a football game in September. We'll have more on the story later in the program tonight. Hurricane Lenny took aim at Puerto Rico today. It was expected to hit there from the southwest tomorrow morning. The British and U.S. Virgin Islands were also under hurricane warnings. Lenny's winds were 100 miles an hour, and expected to increase. Forecasters warned 16-foot waves and 15 inches of rain threatened coastal and low-lying areas. And that's it for the News Summary tonight. Now it's on to raising interest rates, an EgyptAir update, student violence, and a musical success.

FOCUS - % - RAISING RATES

JIM LEHRER: Margaret Warner has the interest rate story.

MARGARET WARNER: Today's quarter-point interest rate hike is the third this year. In a statement explaining its decision, the Federal Reserve said: "Although cost pressures appear generally contained, risks to sustainable growth persist." The statement added that "expansion of economic activity continues in excess of the economy's growth potential." Here to sort through today's decision are Bruce Steinberg, chief economist with Merrill Lynch; and William Cheney, chief economist with the John Hancock Mutual Life Insurance Company.

Welcome, gentlemen. Mr. Steinberg, parse the Fed's statement for us. Why are they saying they're raising interest rates and what are they trying to achieve?

BRUCE STEINBERG, Merrill Lynch: What the Fed is really worried about is that we're on the verge of running out of warm bodies that is, our unemployment rate is so low, that they're worried there's no one left to hire anymore and that this could eventually lead to some inflation pressures down the road. At the same time, they recognize that the performance of our economy has been outstanding, that there is no inflation at present in the economy, and we probably don't have to slow the economy very much to bring it into line with what they probably want to see you doing.

MARGARET WARNER: Mr. Cheney, what would you add to that?

WILLIAM CHENEY, John Hancock: Well, I think what I would like to add is that it's strange that they would choose this particular moment, this particular level of unemployment, let's say, to decide that we're running out of warm bodies.

MARGARET WARNER: But you do agree that that's what they're saying?

WILLIAM CHENEY: I do, indeed, agree that that's what they're say.

MARGARET WARNER: Go ahead. You think it's the wrong conclusion?

WILLIAM CHENEY: I think it's not an entirely unwarranted conclusion. There's no particular basis for choosing this particular moment. Alan Greenspan has probably been one of the greatest benefactors to the American people over the last few years in letting the unemployment rate go down lower than anybody, including myself, thought was reasonable over the last few years. We probably have four or five million more people in jobs because of that. I don't see any specific reason now to pick this moment to try and throttle back.

MARGARET WARNER: Mr. Steinberg, what would you say to that?

BRUCE STEINBERG: Well, the Fed, as a central bank, Alan Greenspan and his colleagues have really been radical in the experiment that they've been willing to run in the U.S.. They have let our economy run full-throttle. And I think they have made the right decisions there. But they are concerned that there are limits that we have to be careful in exceeding. I think in terms of the timing of this move, there was another consideration. The Fed is certainly not going to be able to do anything next month, right ahead with the change at the millennium, the Y2K issue. And they probably felt that if they didn't act now, they were not going to be able to act for at least a couple of months, maybe a little longer than that. They wanted to finish reversing the three easy moves they made in 1997 and 1998 when the world economy was in a big crisis. They've taken back all of these easings. So, this has a certain symmetry to it in terms of where they're headed. I think another consideration for the Fed is that while they're not targeting the stock market and indeed, the stock market reacted quite positively to their move today, they're probably concerned that if they didn't do anything, the market might run away with itself and they would be fearful that that would stimulate the economy some more, which they don't want ton see happen right now.

MARGARET WARNER: Mr. Cheney, how do you explain the market's reaction today -- record highs again on the NASDAQ and the S&P 500, the Dow up 171 points?

WILLIAM CHENEY: By normal standards, it is a little paradoxical. I think it goes along with the sentiment that this is probably the last move for a while. I think it goes along with all the indications that the economy is, in fact, growing at a sustainable pace and the Fed's statement that they're now going to what they call a symmetric directive, which means that other things being equal, they don't see any need to raise rates any more unless there's new evidence.

MARGARET WARNER: So sort of a sigh of relief in a way?

WILLIAM CHENEY: Exactly.

MARGARET WARNER: So what effect - staying with you, Mr. Cheney -- what effect do you think this will have on economic growth? I mean, the Fed did say that they thought economic growth was proceeding at a pace that essentially could not be sustained without inflation. Is this quarter point - maybe taken with the other two -- enough to put a lid on without depressing it too much?

WILLIAM CHENEY: This quarter point by itself is not going to make a big difference. It's going to make a little difference. I mean, that's why they do it. It is going to slow it a little bit more than the accumulated effect of the last couple of tightenings. I guess the big question here is whether the economy needs to slow any more than it is already doing. The Fed stated as a fact that the economy is now growing faster than its potential. And I think that is really the crux of the argument is whether the recent improvements and productivity growth which raise the potential and recent signs of a little bit of a slowdown in a couple of sectors... may add up to... in fact, it's already done what it needs to do -- it's already growing to a slightly slower and now sustainable pace.

MARGARET WARNER: Do I take it then, that you are a proponent of the proposition that we are in a new economy or new economic era in which we can have greater economic growth without inflation?

WILLIAM CHENEY: I think everybody, at this point, would agree that we can have some more economic growth without inflation. And I don't think any reasonable person would argue that we can have unlimited growth. So really, the issue is calibrating your model. And my argument with the Fed at this point would be that the old model has broken down.

MARGARET WARNER: The old model of business cycles and so on.

WILLIAM CHENEY: Well, the old model would say that we get inflation when the unemployment rate drops below 6 percent, which is what most of us believed a few years ago. That's clearly not true. There's some unemployment rate so low that we start to get wage inflation. But we're not there yet as far as one can tell from the evidence of wages.

MARGARET WARNER: Mr. Steinberg, where are you on this question of whether we're in a new economy, and where do you think the Fed is saying it is on that question?

BRUCE STEINBERG: Well, of course, we're in a new economy. Anyone that doesn't believe we are is kind of willfully blind to the amazing things that have happened to the U.S. in the 1990's. The cycle is going to be soon be the longest in history. Growth has been accelerating in the last few years. Inflation has been decelerating in the last few years. Productivity growth which is the source of a higher standard of living has been increasing. So clearly, our economy is functioning much better than it has ever functioned probably in our economic history. But the question for the Fed ultimately is, you know, how much of a good thing can you have? Now, I actually believe that the economy has slowed to what I would estimate its growth potential is at this point. But the Fed is a little more cautious than I am. And it's actually their job to be a little more cautious than I am because they are a central bank. And, for them, the growth potential for the economy is probably a little slower than it's going. But I think what's important to understand it's probably not that much slower. I don't think the Fed wants to see the economy all that much. I think if it just slows a little more, it would be quite satisfied to leave things as they are.

MARGARET WARNER: And you pointed out that it lowered interest rates three times last year by a little bit and then raised them this year a little bit. Has this tweaking done, do you think, what the Fed wanted? In other words, do you think the Fed deserves a lot of credit for our economy's ability to continue to grow without inflation?

BRUCE STEINBERG: The Fed has been an amazing agent of making things really good. When they were easing policy, if they hadn't done that, the world might have found itself in a world depression. Remember, financial markets a year ago, just over a year ago were extremely disrupted. It was the Fed which kind of saved their bacon at that point. The response of the economy was a little more jet-propelled than they expected because things took off quite rapidly. I think that they've done a good enough job that they deserve the benefit of the doubt in terms of what they're doing right now. Now, if they stop where they are right now, the impact on the economy is going to be fairly slight which is why the stock market actually went up today so much -- the thought process being that okay, this is probably it. That's what the market is thinking. But this isn't so bad. The economy will be able to keep on growing fairly strongly. Corporate earnings will keep on going up, and we will have interest rate stability. And I think that's probably right. It's only if they kept on going at this point, that we would have to start worrying what the outcomes would be.

MARGARET WARNER: All right. Well, Bruce Steinberg and William Cheney, thank you both very much.

FOCUS - DRAWING THE LINE

JIM LEHRER: Zero tolerance for school violence, and to Gwen Ifill.

GWEN IFILL: It all started as a ruckus between high school students at a September football game. But on home video, the fight looked more like a riot. Students were expelled. Parents were outraged. That school fight has now become the backdrop for a national debate over rules, race and zero tolerance. Decatur, Illinois, is a small city of about 83,000, located three hours southwest of Chicago. Today, civil rights activist Jesse Jackson literally stopped traffic there.

REV. JESSE JACKSON: We were told in Alabama that the right to vote was local. We were told in South Africa that the right to apartheid was local. And so the local is in a state and the state in a nation. So we respect the United States, and we will go with every level because we want due process and equal protection under the law for all of our citizens.

GWEN IFILL: He was later arrested and led away in handcuffs after leading a protest against the expulsions. School officials have said all along they had no choice; Decatur school board policy dictated they expel six students involved in the fight. Four were later charged with mob action, which is considered a felony.

KENNETH ARNDT, Superintendent, Decatur Schools: This was not a simple fist fight, this was truly a major brawl. They had no conscience regarding who they were going to run into or move out of the way.

GWEN IFILL: Similar, if less heated, disputes are playing themselves out in schools across the country, where officials are taking decisive action to respond to violence and threats of violence within their walls. Last month, a Texas teenager spent five days in jail for writing a Halloween story.

REPORTER: How do you feel getting out of here, Chris?

TEENAGER: Wonderful.

GWEN IFILL: The extra credit assignment described the shooting of two classmates and a teacher. And in Cleveland, Ohio, earlier this month, South High School's big homecoming weekend was ruined and the school shut down.

MAYOR MICHAEL WHITE, Cleveland: (Last Month) We now have documents in our possession that seem to clearly indicate that there was planning under way for some sort of violent act at South High.

GWEN IFILL: Authorities arrested four students and suspended eleven, citing evidence that the teenagers-- all of them white-- were plotting a racist attack at the predominantly black school. Tensions at the nation's schools have run especially high since last spring's Columbine High School shooting in Colorado. Early last month, a Columbine student was arrested for threatening to "finish the job." It seems as if it's happening everywhere: In Prairie Grove, Arkansas, five junior high students who called themselves the "prep killers" were arrested. And in Oklahoma City last week, a four-year-old took his parents' loaded pistol to school, thinking it was a toy. He was kicked out of school for a year. But a U.S. Department of Education report suggests that the problem may not actually be as bad as it seems. Overall, the report found, school violence has declined. Zero tolerance policies, however, are spreading. And if today's old-fashioned civil rights protest in Decatur is any guide, some parents are not willing to take that lying down.

GWEN IFILL: Now, the perspectives of four educators with hands-on experience. Two run public school systems in cities with a zero-tolerance policy. Rod Paige is the superintendent for the Houston Independent School District, and Paul Vallas is the Chief Executive Officer for the Chicago Public Schools. Joining them are Patrick Welsh, an English teacher at an Alexandria, Virginia, high school; and Brenda Melton, a San Antonio guidance counselor. She works at an alternative school for problem students.

Mr. Paige, Houston has had a zero tolerance program for about four or five years. Exactly what does that mean?

ROD PAIGE, School Superintendent, Houston: Our policy specifically outlines incidents of weapons. We have particular concerns about that. And we have a zero tolerance policy regarding weapons. When a student brings a weapon to school, the student is out of there. We will expel the student. But we don't expel the student to the street. We expel them to alternative placement, an alternative school.

GWEN IFILL: Assuming I am a B student and I'm carrying a Swiss Army knife to use as a can opener and I'm caught at this metal detector in the Houston public schools. What happens to me?

ROD PAIGE: First of all, you being a B student is irrelevant. The fact that you've got a weapon means that you violated our student code of conduct and you're going to be dealt with for that purpose, for that incident.

GWEN IFILL: Mr. Vallas, the same question to you. What would happen to me in your school system?

PAUL VALLAS, CEO, Chicago Public Schools: Well, very similar. You could be an A student or B student, you are in possession of a dangerous weapon. You can face expulsion. All students who face expulsion are subject or have the opportunity to go before a hearing officer who can then make a recommendation for something lesser than expulsion. So, sometimes at that hearing, a principal can make an appeal that a student be given a punishment less than expulsion. But you are facing expulsion if you are in possession of a dangerous weapon, or if you commit any number of serious offenses, controlled substances, assault, arson, any number of offenses. Let me point out that our zero tolerance policy is a 24-hour-a-day policy. So, if you are arrested Sunday, you will face expulsion on Monday.

GWEN IFILL: So, even if I had no previous record or any previous evidence that I've ever caused trouble before, the same thing would apply.

PAUL VALLAS: Well, you would face expulsion. One of the reasons we have hearings and we have an independent objective hearing officer is to consider other cases; first-time offense, first-time non-violent offense, is it a pocketknife? What was the intent? Sometimes hearing officers will recommend something less than expulsion. For example, they may recommend detention - in-school detention, Saturday detention. Once again, there are certain offenses, and they are clearly enumerated. Everyone understands what those offenses are. And the failure to comply with the zero tolerance policy will result in a student facing expulsion.

GWEN IFILL: Mr. Welsh, you teach public school here in Virginia.

PATRICK WELSH, High School English Teacher: Right.

GWEN IFILL: How serious is this problem, this problem of school violence?

PATRICK WELSH: It's totally overblown. It's beyond belief. Instead of worrying about... I don't worry about kids in school. School is the safest place during the day. We had two guys get off the bus recently and started a big fight in front of the principal, five feet from the principal and the cop. And the principal took them in and said, "why did you do this?" And he said, "because I knew you'd break it up. And if we were off on the streets, we might have gone the limit." And it's a constant thing. Some parents who go to private schools -- whether parents feel guilty about sending kids to private schools, the limousine liberals, everyone is blowing up the problem of school violence. In my school, which is 45 percent African American and 23 percent white and the rest foreign-born, there's this image of school as a violent place. Yet, when you go in the school, it's quiet. The halls are almost so quiet, it's boring. We had a head mistress from a British school - the Ascot School -- and she came to our school. She's a friend of my wife. And she was amazed at the order. And she said, the schools in London or any British city were never as quiet as this.

GWEN IFILL: Brenda Melton, you teach at an alternative school where presumably you're dealing with what's been ejected from the public school system. Is the problem as dire as we have heard?

BRENDA MELTON, High School Guidance Counselor: Actually, I'm a counselor at a alternative school in San Antonio. Actually, we do have a number of referrals for violent offenders that are sent to our school for shorter long-term placements. I don't see that the violence is that pervasive. I do see that what we are experiencing in the schools is a hysteria as a result of the number of violent episodes within the last two years, particularly Columbine.

GWEN IFILL: Is it a justified hysteria?

PAUL VALLAS: May I respond to something on that?

GWEN IFILL: Well, let me just ask her -- finish that question. Is it a justified hysteria?

BRENDA MELTON: I think when you see the media showing Columbine pictures for over 30 days every day, you see that the parents become very concerned. One month after Columbine happened, there was a number of students who... it was rumored that there would be more violent episodes throughout United States -- in fact, in San Antonio. There were a number of students and parents who kept their kids out of schools that one month after - on that anniversary date. I think the hysteria is waning somewhat. We're still seeing some episodes. For instance, I had a student who wore a trench coat to school. He had been wearing that coat for four years. He is a senior. And because of the trench coat, some hysteria was created. He went upstairs and had a confrontation with an assistant principal. That ended up being a violent episode because he was confronted about wearing this trench coat. There's a number of changes that have come about as a result of this feeling within the school community. And I think sometimes what is seen happening is that we're treating some incidents differently than we did before Columbine.

GWEN IFILL: Mr. Vallas, you wanted to respond?

PAUL VALLAS: Sure. Absolutely. Let me make the point, we had our zero tolerance policy two years before Columbine. We've had a zero-tolerance policy going on four years. Over the past four years since I have been superintendent, 100 students have been murdered in their communities. None in the schools, none on school grounds -- but a hundred kids killed in the street, most of them innocent bystanders, many of them victimized by gangs. Let me point out, that three or our years ago, we confiscated 150, 160 weapons at the door every year. Last year, we confiscated 31. We used to have a lot of fights in the schools. There used to be a lot of vandalism in the schools. One of the reasons that are schools are safe and as safe as suburban and down state schools is because we have not only extended after-school programs to keep kids off the street, but we also have a very tough disciplinary policy; we have a zero tolerance policy. Let me point out that our zero tolerance policy is clear. Everyone understands what it is. The parents do. The children do. It's posted on the boards. And the punishment fits the offense. In addition, when we expel, we expel no one to the street. We have contractual relationships with 29 privatized schools. And when students are expelled for whatever reason, those children are expelled to an alternative school. They are put in an alternative educational setting. Our zero tolerance policy has helped to contribute to the safety that our children feel in the schools. But, nevertheless, there are still dangerous neighborhoods out there. I had a seventh-grader who was murdered yesterday in the evening in his neighborhood, who attends a public school that I went to 35 years ago. So the bottom line is still have kids who have access to weapons, who live in very dangerous neighborhood. And sometimes there is a risk that some of that activity is going to spill off into the schools. So, our zero-tolerance policy helps ensure that our schoolsare safe and secure place.

GWEN IFILL: Excuse me. Mr. Paige, could you give us your experience? Have you also seen crime and violence go down in your schools?

ROD PAIGE: Absolutely. Crime has gone down in the Houston Independent School District. It's going down each year. I think part of it has to do with the implementation with our zero-tolerance policy. And I concur with Superintendent Vallas. We have been at this for a long time. And we're not just now waking up to understand that we've got to provide a safe learning environment for students, and for our teachers, and principals. This policy in the Independent Houston School District is at least a six-year-old policy. It has not been altered except for one alteration in which we redefine a weapon. It's specific for weapons. We have a zero tolerance with weapons. When a student comes to school with a weapon, the student can expect to be recommended for expulsion. This expulsion, like Chicago, is going to go to an alternative placement where the student will still have an opportunity for instruction and still an opportunity to continue their studies. They will be denied access to the regular classroom in the school district.

GWEN IFILL: Mr. Welsh, I wanted to follow up on that. What we're hearing from two urban school superintendents is that they were dealing with this problem before Columbine.

PATRICK WELSH: And so is my school. And I think it's the arrogance of a lot of suburban schools -- the Columbine principal for instance, saying, what a wonderful school he had. But that guy seemed to be asleep. It's the urban schools where there was a lot of fear before or a lot of let's say kind of racist perceptions that started zero tolerance and that started getting very strict on offenders. But I still think one of the things we've got to talk about is when you separate a kid from school, especially a lot of the kids who get in trouble, they have nowhere to go. The schools are the center of their lives. They have no structure at home, very often no parents. And they're in a school...they have structure. They have adults who care about them. To separate them from the school, like in Decatur, unless they have weapons is an outrage to me.

ROD PAIGE: I need to make a point -

PATRICK WELSH: To throw them on the street.

GWEN IFILL: Mr. Paige, I just wanted to let Mr. Welsh finish. Go ahead. Now you can speak up.

ROD PAIGE: Okay. It is not accurate to say they have no place to go. When a student is expelled, they are expelled to an alternative placement. And this alternative placement is, in fact, a school. And a school has the basic courses that the student would get in the regular classroom setting. It is an alternative setting -

BRENDA MELTON: If I can -

GWEN IFILL: One moment.

ROD PAIGE: -- where the student has the type of assistant that they would need.

GWEN IFILL: Brenda Melton, where do parents come in on all of this?

BRENDA MELTON: Our parents are involved in our alternative program from the very inception. The first time they walk into the building, they meet not only with the principal, the assistant principal and myself as the counselor, but they do meet our staff as well. So there's a connection automatically. Within our program, we have a comprehensive approach. Conflict resolution is taught. We have life skills and most of our students are there for drug offenses. But certainly, there is a number of other problems that go along with the drug offenses. But we look at the whole student. And we provide, number one, the education that they need, and what the students report is they like the small environment. They like the fact that the teachers have a connection to them and really care about them. A group of my girls the other day in a group counseling session said that, you know, when we raise our hand at the other school, nobody cares whether we raise our hand or not. They call on the good kids. So there's a perception that they're not wanted, that they aren't cared about, that the school doesn't connect to them, and that's where we've lost a lot of kids. There is scientific evidence that the larger the school, the more incidents of violence will occur. And I think what we're seeing in larger school communities are some school-within-a school concepts that are beginning to bring about closeness with students and staff.

GWEN IFILL: Mr. Vallas, in the effort to find the correct answers to these question, are some school districts running the danger of substituting policy for good judgment?

PAUL VALLAS: You know, the issue in Decatur is not an issue of zero policy. It's an issue of whether or not the policy is being fairly applied, it's an issue of whether or not the policy is even being communicated to everybody in the school so they understand what the policy is and so that the parents clearly understand, the pupils understand, the teachers, everyone understands what that policy is. And also, it's an issue of whether or not you're just expelling kids to the street or you're placing them in some sort of educational alternative system. Like Houston, our policy is very clear; it's very concise. Everybody understands it. Everybody knows what it is. Churches, religious institution, everybody involved in the school knows what the policy is. Like Houston, our policy, the punishment fits the offense. There is due process where you can go before a hearing officer. Finally, like Houston, when we expel, we expel no one to the street. We expel everyone to an alternative school.

GWEN IFILL: Mr. Welsh?

PATRICK WELSH: You were talking about a Swiss Army knife. We had one girl until our school who brought a box cutter to school, totally innocently. I don't know whether it was her brother's or what. She was expelled under the zero-tolerance policy.

GWEN IFILL: Did she not know what the rules were?

PATRICK WELSH: I don't know if she knew r knew shed that box cutter. It was a girl from a foreign country. A couple of school board members told me that it broke their heart to expel her. They would not budge on the rule. You with the Swiss Army knife might be a little different.

PAUL VALLAS: I really have to make a point.

GWEN IFILL: Briefly.

PAUL VALLAS: Very quickly, two years ago, we had someone bring a box cutter to one of our high schools -- maybe quite innocently -- and then they proceeded to get in a fight with another girl and proceeded to slash that girl. The girl needed something like 40 stitches. The bottom line is the policy is clear; it's concise. But we do not expel children to the street; we put them in alternative settings. We need to be teaching our children... obviously, we need to be preparing them academically for the world. But we also need to teach them very early on that there are consequences for misconduct. There's consequences for improper behavior. And we also owe it to the students in school who want to come to school and focus, we need for our students to know that the school is indeed, a safe and secure place. And the zero tolerance policy helps ensure that.

GWEN IFILL: Well, we're all out of time. We could talk about this all night, but I have to thank you all forjoining us.

FOCUS - BUENA VISTA SOCIAL CLUB

JIM LEHRER: An unusual musical success story from Cuba, and to Elizabeth Farnsworth in San Francisco.

ELIZABETH FARNSWORTH: They are unlikely music megastars: Ibrahim Ferrer, 72 years old; until recently, retired; before that, a featured vocalist for big bands in Cuba. Omara Portuondo, in her 60's; famous in Cuba after a long career as a leading singer, but not, until now, an international star. And Ruben Gonzalez, 82 years old; a virtuoso pianist renowned among Cuban musicians, but not a big name elsewhere until now.

GROUP: (Singing in Spanish)

ELIZABETH FARNSWORTH: Now Ferrer, Portuondo, and Gonzalez are hot, with hit CD's and sold-out concerts like this one recently at the Paramount Theater in Oakland, California. Tickets for this event, which was part of the San Francisco jazz festival, sold out within hours. Reviewers raved. The "San Francisco Chronicle" critic wrote, "Saturday's show proved these musicians aren't just quaint memories of a romantic yesterday. The depth of talent in this extended group is extraordinary." The musicians' success story began long ago, but this feature-length documentary, "Buena Vista Social Club," which came out last summer, catapulted them to new fame.

NARRATOR: From Wim Wenders, director of "Wings of Desire" and "Paris, Texas," comes the story of an American musician who went searching for the sounds of an

Island and discovered the soul of a people.

ELIZABETH FARNSWORTH: American guitarist Ry Cooder went to Cuba in 1996, seeking some of the veteran performers who had played the clubs and casinos that made pre-revolutionary Havana one of the great music capitals of the world. With help from local Cubans, Cooder put together a group of musicians and produced several CD's, including the Grammy-Award-winning "Buena Vista Social Club" album that has now sold two million copies worldwide. Some of the group, like Omara Portuondo, had never stopped performing. Others, like Ibrahim Ferrer, who spoke to us in Oakland, had retired.

IBRAHIM FERRER: (speaking through interpreter) When they came to see me at my house, I was shining shoes. I was retired. I didn't need to shine shoes for money. I've always been a restless guy. You can ask my wife. I have to stay busy. I will play just by myself, or with the dog or kids. I've always got to be doing something.

ELIZABETH FARNSWORTH: The musicians called themselves the Buena Vista Social Club after one of the few big pre-revolutionary Havana nightspots that admitted black people. The film documents the recording sessions and a triumphant concert in New York's Carnegie Hall. Cooder had long been a fan of Cuban music, which combines Spanish melodies with African-derived rhythms, especially the boleros and the genre known as "son."

RY COODER, Musician: I love the music because it is purely emotional, and then it has a certain mysterious other side. The emotion we understand of tragedy, of joy and all these things; it's very well expressed as all these things. I think in the human beings and in their lives and things, the Cubans have got that nailed. (Ferrer sings "Silencio")

IBRAHIM FERRER: (speaking through interpreter) For me the Cuban son, the music I sing, is the greatest thing in the world. Without the son-- without all music, but especially the son-- life is nothing. It wakes you up. It makes your blood boil. With it there is nothing dead. Everything is alive. And life-- being really alive-- is the best thing for all of us.

ELIZABETH FARNSWORTH: How does it feel like to be standing in front of those Americans, singing a son or bolero, and you know maybe half of them haven't heard one, and they love it, they're responding so enthusiastically. How does it feel?

IBRAHIM FERRER: (speaking through interpreter) Right now I can't explain the way I feel because I want people to understand what I'm trying to say with my music. I don't know if I'm doing it well or not, but I think I'm doing it all right because I see a lot of people in the audience with tears coming down from their eyes. I can't even explain it. It's something I feel and the way that I feel it. That's how I give it back.

ELIZABETH FARNSWORTH: The great success you've had, has it changed you in any way?

IBRAHIM FERRER: (speaking through interpreter) I haven't changed at all. Well, I've changed, but... well, I never thought I'd be as famous as I am now. But in other ways I'm the same person I ever was. My living situation is the only thing that's changed. But personally, my inner feelings, which are the most important thing, haven't changed at all.

(Omara Portuondo Singing in Spanish)

ELIZABETH FARNSWORTH: Omara Portuondo has played a key role in Cuban music, integrating American jazz into the African and Spanish traditions already strong on the island. On a walk in Oakland before the concert, I asked what had changed in her life with her new fame.

OMARA PORTUONDO: (speaking through interpreter) We're trying to use what we have to fix up our house. I live in the same house, but I've brightened it up a little bit.

ELIZABETH FARNSWORTH: I also asked whether the music she sings had just about died out in Cuba after the revolution in 1959.

OMARA PORTUONDO: (speaking through interpreter): No, there have always been people performing it, like Ruben, and Cachao, the bass player-- all these people who have kept playing. But the music has become more relevant and gotten more attention there now, for artistic reasons and because of the fame we got from the Grammy. (Piano music in background)

ELIZABETH FARNSWORTH: Though Ruben Gonzalez had never stopped performing, he had cut back due to arthritis, and was practicing on friends' pianos. We found an old piano in a hotel near where he was staying in Oakland, and I asked him how he liked being so popular now.

RUBEN GONZALEZ: (speaking through interpreter) It's like being at a party, something very happy. Or it's like I went to the store for candy. I'm enjoying myself that much. I see a piano, like right now, and I go like this. I have to check it out and see how it is.

ELIZABETH FARNSWORTH: The musicians of the Buena Vista Social Club have become celebrities. Ferrer drew an autograph-seeking crowd at the Oakland cafe where he spoke to us. Ry Cooder has a theory about why the musicians have touched such a chord here.

RY COODER: But when you are around him or around these folks, what you begin to see is they have retained some humanity that is very out in front. It's very well-worn, you know. This guy comes in this aura of humanity. He's his own person. His music comes from inside, it's from direct experience. It's not coming from a menu. He didn't buy it in a mall, so his culture has not been replaced, as people outside in the rest of the world have often forfeited and given up their culture, and they don't even know it.

ELIZABETH FARNSWORTH: Given the strong feelings in this country about Fidel Castro's Cuba, Ry Cooder, Ferrer, and the other musicians avoid most talk of politics, but politics occasionally intrude. These demonstrations in Miami late last month against another Cuban band, Los Van Van, got rough, and in response the Buena Vista group canceled their Miami performance. And what the musicians can make from concerts and from CD's-- which are best sellers at this Virgin mega store in San Francisco-- is limited by restrictions on U.S. trade with Cuba. Bill Martinez, a San Francisco attorney who represents the musicians, explained what kinds of payment the Cubans can legally get.

BILL MARTINEZ: Well, the Cuban artists under the embargo, which we abide by the rules and regulations, they are only entitled to their per diem, transportation and lodging for tours that they take on. They're also entitled to royalties that they get for CD's, but that's all.

ELIZABETH FARNSWORTH: The musicians' success puzzles many Cubans, says bay area record producer Greg Landau, who has lived in Cuba. It's as if ragtime suddenly made a big come-back in the United States. But Cubans are paying attention, he says.

GREG LANDAU, Music Producer: We went to the premiere of the "Buena Vista Social Club" in Havana, and it was packed. And I think people have responded and come to reevaluate their own musical values by the success of "Buena Vista Social Club." Cubans have in Cuba, because they see how much it's appreciated outside of Cuba. They have come to re-examine these same traditions and these same roots.

ELIZABETH FARNSWORTH: And so the Buena Vista Social Club musicians, late in their lives, are having an impact far beyond anything they ever dreamed. They say it is a dream they wish everyone could share.

UPDATE - FINAL WORDS

JIM LEHRER: Ray Suarez has the EgyptAir update.

RAY SUAREZ: In just the past few minutes, James Hall of the National Transportation Safety Board came to a much delayed briefing to talk to reporters about the state of the investigation into the crash of EgyptAir flight 990. Time and again in his briefing, he talked about the sensitivities of the relationship between the Egyptian government, which owns EgyptAir, and its role in the investigation and its partnership with the National Transportation Safety Board.

JIM HALL, NTSB: For the National Transportation Safety Board to consult with these experts and officials, to fully evaluate this information prior to any final decision on whether the responsibility for this investigation should transfer to the Federal Bureau of Investigation. I met today with FBI Director Louie Freeh, and he fully concurs in this course of action. It is in the interest of all those concerned with this investigation and its results to ensure that this process, including any further evaluation, be done expeditiously.

RAY SUAREZ: Joining me now for a discussion: Former FBI Assistant Director James Kallstrom-- he led the FBI Investigation of the crash of TWA Flight 800-- and Elaine Shannon, correspondent for "Time" Magazine who covers terrorism and the FBI.

James Kallstrom, what do you make of what you just saw?

JAMES KALLSTROM, Former FBI Assistant Director: I think it makes good sense. I don't see the need to rush into anything. We need to be sure of what's on that audio tape and how it syncs up with the data. We obviously need the full cooperation of the Egyptian government and law enforcement agencies, which we have, we have a good relationship with. So I don't see the difference of waiting a few days. The FBI's going to do what they have been doing from the start of this catastrophe. And that won't change.

RAY SUAREZ: James Hall noted in the briefing that none of the available evidence has shown any mechanical or weather-related failure of this jet plane. Does that inflate, expand the importance of the Egyptians and their aid in this investigation?

JAMES KALLSTROM: Well, I think it just stands on its own. I look back at TWA 800, and we ended up proving a negative, although it looked like in the beginning it was a criminal act. So, I say let the evidence fall where it might. Let's be careful, calculated. Let's remember this is an EgyptAir flight, although there were a lot of Americans onboard and people from other countries. I don't see where the delay hurts anything.

RAY SUAREZ: Elaine Shannon, for the last 24 hours, speculation has been swirling on this story. Word of what's been on the tape has leaking like crazy. Do you think it was Egyptian sensitivities that might have caused the NTSB to slow down a little bit?

ELAINE SHANNON, Time Magazine: Absolutely. And they have every right to be sensitive. We wouldn't want people from any country or even some other region in the United States to be speculating on what people might be saying to each other in a local language. New Yorkers say some words to each other from people from abroad might say, oh, my gosh, they talk to each other like that; that's awful. The FBI has a saying, and the Justice Department, they call it the search for truth. It's not the search for culprits. It's the search for truth. If this keeps the Egyptians on board, and the search for truth goes well, that's what counts.

RAY SUAREZ: Well, what kind of aid on the ground in Egypt would you be looking for if you moved to a next phase of investigation and that it might involve American investigators on foreign soil?

ELAINE SHANNON: Absolutely. The FBI cannot go door-to-door without permission of the Egyptian authorities. And they will need those folks to find the families of the crew members, families of passengers that maybe need to be interviewed, to run databases, criminal databases, security databases, anybody with any connections to the several terrorist groups there. They'll need medical records, they'll need telephone records, travel records, maybe apartment records. All of that stuff which was needed in the Africa bombings was done by the local authorities in Africa with the FBI Input. If the Egyptians don't let them walk around on their soil, they're not going to get anything. It's going to be like the Khobar Tower bombings - delayed and delayed and delayed. And evidence will be third hand; it won't be any good.

RAY SUAREZ: James Kallstrom, I'm sure a lot of people remember that hangar in long island where bit by bit, TWA 880 was put back together. That doesn't seem to be a possibility in this case. Are we looking at flight data that ends up being paramount, rather than just running in tandem with other physical evidence?

JAMES KALLSTROM: Well, you know, I really don't think we know at this point. I think once all the people that have a point of view on this evidence, this audio tape from the cockpit and the data recorder, once that's really looked at and there's some consensus on what the preponderance of that information says and what it means, then I think we can get on to the other issues. I'm sure there's plans being made to try to bring up pieces of the plane. It's going to be a real challenge from the standpoint of the depth of the water and time of year. Let's hope that this is going to be clarifying the information that's there now. Let's let everybody take a look at it and reach some consensus.

RAY SUAREZ: Elaine, do you think time is critical or are we sort of the plateauing here?

ELAINE SHANNON: Well, on the one hand, as Jim says, it would be really nice to get as much of that plane up as possible. If we can't, the records that need to be looked at, I think they'll be there for a while. Let's face it. These investigations take a long time. We in the media want instant solutions. But these guys want the truth, or they should.

RAY SUAREZ: After a while, we may move to less frequent briefings but, in fact, the more meat and potatoes part of the investigation?

ELAINE SHANNON: Absolutely. I did a book with an FBI agent called "No Heroes." And one of the chapters is called for a saying - which I'll clean up for television -- "assumption is the mother of foul-up." Never assume anything. Lead goes to lead goes to lead. It's slow and methodical but ultimately, I think, the right process for this.

RAY SUAREZ: We saw in the last day or so, James Kallstrom, theories being spun out about what things may or may not have been said in the cockpit during the final moments of this crash. Is it dangerous to have a theory this early in the going? Do you end up sort of assembling the facts to fit the theory?

JAMES KALLSTROM: It's dangerous to have one theory. It's professional to have all theories and to look at all theories. I just look back at TWA Flight 800. What the FBI did there is to try to have an open mind and look at everything. And we stayed a long time. But we were sure of our answer at the end. And I think that's the key to any good investigation.

RAY SUAREZ: So now we're looking at the long, hard slog part of this?

JAMES KALLSTROM: Well, I think we're looking for a process that's fair, that's open, that wants to get to the truth. As Elaine said, I agree with everything she said. I suspect that's what we'll get. We live in a world today that's very small compared to what it was three or four decades ago. The FBI, through, I think, good vision and good planning, does have a very effective liaison capability around the world, including Egypt. I think the good news is we will get to the bottom of this catastrophe.

RAY SUAREZ: And sensitivities being what they are in the United States the last couple of times, as someone who covers the world of terrorism, there have been some real bonehead plays, some false calls, some running up and down blind alleys when it comes to assumptions being made about connections with the Middle East?

ELAINE SHANNON: That's right. That's one reason why we don't have as good evidence as we'd like to see on the Khobar Towers bombing. Louie Freeh is very sensitive I think to these sensitivities, and he wants to get the information. He doesn't want to look like he's grabbing the case away from the NTSB and insulting the Egyptians. That would be absolutely counterproductive and be disastrous for everybody, including him.

RAY SUAREZ: Elaine Shannon, good to talk to you. James Kallstrom, thanks for joining us.

JAMES KALLSTROM: Thank you.

RECAP

JIM LEHRER: And, again, the major stories of this Tuesday: The Federal Reserve raised two key short-term interest rates a quarter-point. And federal officials, as we just heard, delayed turning over the EgyptAir crash investigation to the FBI. Egypt was to provide more experts to evaluate the contents of the cockpit voice recorder before a final decision is made. An editor's note before we go tonight: Last Thursday I said it was the last Veteran's Day of the century. Wrong. I should have said it was the last one in a year beginning with 1900. We'll see you on-line and again here tomorrow evening. I'm Jim Lehrer. Thank you and good night.