The NewsHour with Jim Lehrer

JIM LEHRER:

GWEN IFILL: Good evening. I'm Gwen Ifill. Jim Lehrer is on vacation. On the NewsHour tonight: Our summary of the news; then, two segments on Iraq-- President Bush comments today at his year- end news conference on violence and democracy there, and Ray Suarez interviews Iraq's finance minister; Donald Rumsfeld under fire from members of his own party-- should he stay or should he go? We debate that; a report from Tom Bearden on controversial changes to a federal community investment program; and a conversation with the authors of the "Left Behind" series of biblical thrillers.

NEWS SUMMARY

GWEN IFILL: Iraqi police rounded up scores of suspects today, in the wake of two deadly car bombings. The bombers struck Sunday in the Shiite holy cities of Najaf and Karbala. The twin attacks killed at least 66 people and wounded 175 others. Police interrogated more than 50 suspects, some of whom confessed to ties with Iran and Syria. Iraqi Prime Minister Allawi warned today the insurgents are trying to ignite a civil war. In Washington today, President Bush acknowledged the attacks in Iraq are hurting efforts to stabilize the country, but he urged Americans to be patient. He spoke at a White House news conference.

PRESIDENT GEORGE W. BUSH: No question about it. The bombers are having an effect. You know, these people are targeting innocent Iraqis. They're trying to shake the will of the Iraqi people, and, frankly, trying to shake the will of the American people. Car bombs that destroy young children or car bombs that indiscriminately bomb in the religious sites are effective propaganda tools. But we must meet the objective, which is to help the Iraqis defend themselves, and at the same time have a political process to go forward. It's in our long-term interest that we succeed.

GWEN IFILL: The president also said he does not expect the Jan.30 elections in Iraq to be trouble-free. We'll hear more from the president and take a closer look at what's happening in Iraq right after the News Summary. Gunmen in Iraq struck a new blow to the country's election planning on Sunday. Up to 30 men dragged three Iraqi election workers from their car and shot them dead in broad daylight on Baghdad's main road. Still today, election officials went ahead with a lottery to fix the order of candidate and party names on the ballot. The United Nations' special representative helped run the lottery, and he appealed for public support.

ASHRAF JEHANGIR QAZI: It is truly in the interest of every Iraqi citizen, whatever their political views, to participate fully in this electoral process because that is the way forward even with respect to whatever their own goals and programs are.

GWEN IFILL: Also today, Saddam Hussein, speaking through his lawyers, condemned the elections. He warned the vote will lead to dividing Iraqis and their land. Pfizer, the world's largest pharmaceutical company, has pulled all advertising for its pain-relief drug Celebrex. But the company has no plans to stop selling the drug. Last week, Pfizer confirmed that a new study found high doses of Celebrex may double the risk of heart attack. The company said there are no known risks associated with normal doses. A key predictor of U.S. economic activity rose in November, after falling for five straight months. The Conference Board, a business research group, reported today its index of leading economic indicators was up 0.2 percent. That was slightly better than expected. On Wall Street, the Dow Jones Industrial Average gained more than 11 points to close above 10,661. The NASDAQ fell seven points to close below 2128. That's it for the News Summary tonight. Now it's on to President Bush's on Iraq, Iraq's finance minister, differing views on Rumsfeld, saving poor neighborhoods, and biblical novels.

FOCUS - SECURING IRAQ

GWEN IFILL: An update on and from Iraq, as seen by the American and the Iraqi governments. First, the American view; Iraq was a major topic at President Bush's news conference this morning.

PRESIDENT GEORGE W. BUSH: The elections in January are just the beginning of a process, and it's important for the American people to understand that. As the Iraqi people take these important steps on the path to democracy, the enemies of freedom know exactly what is at stake. They know that a democratic Iraq will be a decisive blow to their ambitions because free people will never choose to live in tyranny. And so the terrorists will attempt to delay the elections, to intimidate people in their country, to disrupt the democratic process in any way they can. No one can predict every turn in the months ahead, and I certainly don't expect the process to be trouble-free. Yet I am confident of the result. I'm confident the terrorists will fail, the elections will go forward and Iraq will be a democracy that reflects the values and traditions of its people. I'll be glad to answer some questions.

DAVID GREGORY, NBC News: A year ago we were in this room, almost to the day, and you were heralding the capture of Saddam Hussein and announcing the end of Baathist tyranny in Iraq. A year later, the chairman of the Armed Services Committee in the Senate said, after returning from Iraq, talking about Iraqi troops that "the raw material is lacking in the willpower and commitment after they receive military training." What's going wrong?

PRESIDENT GEORGE W. BUSH: Yeah. Well, first let me talk about the Iraqi troops. The ultimate success in Iraq is for the Iraqis to secure their country. Now, I would call the results mixed in terms of standing up Iraqi units who are willing to fight. There have been some cases where when the heat got on, they left the battlefield. That's unacceptable. Iraq will never secure itself if they have troops that, when the heat gets on, they leave the battlefield. I fully understand that. On the other hand, there were some really fine units in Fallujah, for example, in Najaf that did their duty. And so the... our military trainers, our military leaders have analyzed what worked and what didn't work. First of all, recruiting is strong. The place where the generals told me that we need to do better is to make sure that there is a command structure that connects the soldier to the strategy in a better way, I guess is the best way to describe it.

CARL CANNON, National Journal: Mr. President, 140,000 Americans are spending this Christmas in Iraq, as you know, some of them their second Christmas there. My question is, how long will those troops be there?

PRESIDENT GEORGE W. BUSH: That's a very legitimate question, Carl, and it's... I get asked that by family members I meet with, and people say, "How long do you think it will take?" And my answer is, you know, we'd like to achieve our objective as quickly as possible. Again, I repeat we're under no illusions that this Iraqi force is not ready to fight, en Toto -- there are units that are, and that they believe they'll have a command structure stood up pretty quickly, that the training is intense, that their recruitment is good, the equipping of troops is taking place. So they're optimistic that "as soon as possible" can be achieved.

GWEN IFILL: Now with more on the violence and the politics in Iraq and on the continuing efforts to rebuild that country, Ray Suarez spoke this afternoon with Iraq's interim finance minister.

RAY SUAREZ: That man is Adil Abd Al-Mahadi. He's in Washington for a meeting of the U.S.-Iraq Joint Economic Commission, whose goal is to promote economic growth in Iraq.

As part of that effort the two nations Friday signed a deal to forgive $4.1 billion in Iraqi debt to the United States.

And, Minister Mahdi, welcome to the program.

ADIL ABD AL-MAHDI: Thank you.

RAY SUAREZ: It was a very bloody weekend in Iraq, and today at his news conference the president said American people are taking a look at Iraq and wondering whether the Iraqis are ever going to be able to fight off these killers. Is he right to have that concern?

ADIL ABD AL-MAHDI: Yes, yes, I think he is right. One of the needs is the election process taking place. And this is one of the most important needs to encounter the insurgents, who tried all last year to stop the political process, starting from the governing council, then the transfer of sovereignty, to the national conference and now elections. So their agenda is clear; ours is clear. And I think the president is right. The election process is one of the most important needs to encounter them, and, of course, security measures also should be taken into consideration to encounter them.

RAY SUAREZ: Is there some worry about the confidence of the Iraqi people in these elections, in this process, being shaken? The president today said no question about it, the bombers are having an effect. They're trying to shake the will of the Iraqi people. What do the day-to-day people on the street...

ADIL ABD AL-MAHDI: They might shake for a short while, but the Iraqis are more resolute really on this process on elections. And if you read the newspapers of this morning, people are expressing such resolute desire to go for elections and really to encounter the projects of the insurgents and the terrorists.

RAY SUAREZ: Also in those papers this morning were, right on the cover, photographs of men being dragged out of cars and being killed in broad daylight on city streets in your country by men who don't even bother to cover up their identity anymore.

ADIL ABD AL-MAHDI: That shows the resistance of the Iraqi people, how resolute they are. Thousands and thousands of people are participating in organizing those elections, and they are resolute to do so, so the terrorists have set sometimes some soft targets, some easy targets. And that shows how resolute the Iraqi people is.

RAY SUAREZ: So you're reassuring Americans that these elections are going to come off as planned, and...

ADIL ABD AL-MAHDI: Those elections should go on, and they will take place.

RAY SUAREZ: Let's talk a little bit about what the nature of the conflict is that we're seeing right now. Both in your country and in the United States observers are starting to talk about sectarian conflict, Shia versus Sunni. Is that what we're seeing now when we see attacks in places like Karbala?

ADIL ABD AL-MAHDI: Well, I think the major factor is that a minority coming from a certain geography, they are not... don't call them Sunnis or Arabs, but they are coming from Sunni and Arab geography, because we have a lot of Sunnis and Arab participating in this process. So those people, this minority, had the power for so long time, for decades. And because this process is a democratic one and all the communities have to share power, that's why they are trying to stop this process, fearing that they are losing their control and their privileges.

RAY SUAREZ: You don't want to describe them as being Sunnis, but...

ADIL ABD AL-MAHDI: No, because the majority of Sunnis are with this process. Don't forget that the majority of Sunnis are living in Mosul, Baghdad... so those people really are a minority of people from the remnant of the old regime and fighters coming from outside the country. And if you look at how brutal they are using their methods, you would see that they are unpopular. If they were popular, they would be much easier with their people, instead of putting car bombs in worship places, markets, killing people in the streets. Those are their people, if really they are looking for the interest of the Iraqi people.

RAY SUAREZ: But that's exactly it. Aren't they choosing these targets? Aren't they choosing the towns where they strike -- the funeral procession of a senior cleric? Aren't they choosing in a way to provoke the Shia majority?

ADIL ABD AL-MAHDI: Yeah, of course. They want to provoke the Shia majority. They also want to provoke other Sunnis against them. They want to provoke Kurds. The letter of Zarqawi, the first letter, was very clear in its message and mentioning those three parties as their enemies. So it's very clear those are minority, one organized, one financed, very brutal, using Nazi methods, fascism methods, and the Baathist methods of the '60s and the '70s are very similar. They are using the same methods today to intimidate our people and really try to silent the voice of liberty and democracy.

RAY SUAREZ: Are you standing in those elections yourself?

ADIL ABD AL-MAHDI: Yes, sir.

RAY SUAREZ: Are you partof the united Iraqi list?

ADIL ABD AL-MAHDI: Yes.

RAY SUAREZ: Now, let's talk a little bit about what it would mean to have your party's vision, if you're successful in the election, take a big role in the running of Iraq. The supreme council for the Islamic Revolution in Iraq is a name that probably a lot of Americans don't know. But what kind of Iraq do you want to see in the future if many voters support your party and its list?

ADIL ABD AL-MAHDI: We want a democratic state. This list contains the major parties and personality that participated in struggling against Saddam Hussein, that participated in all the opposition conferences -- participated in the national conference in the early '90s so those parties, those personalities are very well known to our people. And those parties and personalities participated from the early days in the political process in our country after the overthrow of Saddam Hussein.

RAY SUAREZ: Is this a government in which religion would play a very large and influential role?

ADIL ABD AL-MAHDI: Well, religion reflects values in Iraq, but politically speaking this will be a democratic government, and I think it will be much similar to the government that is running Iraq today. That is, we will have the minister governing this government, and we are all willingly taking that really as our guideline to administer the country until drafting the new constitution, then having new elections the end of 2005.

RAY SUAREZ: A lot of the members of the list spent parts or all of their exile in Iran. Will Iran have a lot of influence in the new Iraqi government?

ADIL ABD AL-MAHDI: Yes. A lot of Iraqis-- Shias, Kurds, Arabs, Syrians-- refuged in Iran because Iran is a neighboring country and because it opposed Saddam Hussein at that time. Iran showed in a conference their willingness to support this election. But as Iraqis we don't accept any interference in our affairs. We are independent Iraqis, and we are running this election in the interest of our people.

RAY SUAREZ: You're here in Washington to talk with financial leaders in the United States. The United States just wrote off your debt. Do you think that's something a lot of other countries are getting ready to do?

ADIL ABD AL-MAHDI: Well, we hope so. What the United States did is very important in this... in this debt relief. As you know, we had already 80 percent from the Paris Club creditors, so now the United States is offering a cancellation of 100 percent. This will be a model to follow by other countries. And we are discussing and negotiating with other countries to imitate the United States in this behavior.

RAY SUAREZ: Which are the countries that are owed the most by Iraq?

ADIL ABD AL-MAHDI: Well, Japan, Russia, those are some of the main creditors to Iraq. Of course, beside the Gulf states, such as the Saudis, the Kuwaitis.

RAY SUAREZ: And any encouragement from those countries?

ADIL ABD AL-MAHDI: Yes, we are hearing their responses after... reaction after the Paris Club agreement was very positive, and we will have direct and bilateral negotiations with them.

RAY SUAREZ: Minister Mahdi, thanks for being here.

ADIL ABD AL-MAHDI: Thank you.

GWEN IFILL: Still to come on the NewsHour tonight, Rumsfeld under fire, helping poor communities, and the authors of a best- selling biblical series.

FOCUS - UNDER FIRE

GWEN IFILL: Now, Donald Rumsfeld, in the eye of a political storm. Spencer Michels provides some background.

SPENCER MICHELS: Secretary of Defense Donald Rumsfeld is taking fire from an unexpected quarter: His right flank. Republicans on Capitol Hill and retired military officers are openly questioning his fitness for the job, and his recent comments at a town hall meeting with guardsmen in Kuwait only added fuel to the fire. Specialist Thomas Wilson put Rumsfeld on the spot, asking him about lack of armor for Humvees.

DONALD RUMSFELD: It is essentially a matter of physics. It isn't a matter of money, it isn't a matter on the part of the army of desire; it is a matter of production and capability of doing it. As you know, you go to war with the army you have, not the army you might want or wish to have at a later time.

SPENCER MICHELS: Rumsfeld has been criticized for not deploying enough troops to Iraq, for poor planning of the occupation, for not preparing for what has become a full-scale insurgency, and for allowing the prisoner abuses at Abu Ghraib to happen on his watch. All of these long-simmering critiques have turned into full- throated broadsides. Among the most vocal is Nebraska Republican Sen. Chuck Hagel. He was on CBS yesterday.

SPOKESMAN: Should he leave?

SEN. CHUCK HAGEL: That's up to the president. I think, though, what you're seeing come out here is all of the accumulation of bad judgment.

SPOKESMAN: Well, have you lost confidence in Rumsfeld?

SEN. CHUCK HAGEL: I have no confidence in Rumsfeld's leadership.

SPOKESMAN: You have no confidence in Rumsfeld.

SEN. CHUCK HAGEL: It's up to the president to make that decision.

SPENCER MICHELS: Hagel's colleague, Arizona's John McCain, has also said that he has "no confidence" in the secretary of defense. Nonetheless...

SEN. JOHN McCAIN: I respect the president's right to have his team, and I do not call for Secretary Rumsfeld to step down.

SPENCER MICHELS: Other Republicans have come close. Mississippi's Trent Lott criticized Rumsfeld's relationship with his senior officer corps. Minnesota's Norm Coleman expressed grave doubts about the Pentagon's handling of the armor issue. And Susan Collins of Maine expressed a similar dismay in a letter to the defense chief. But over the weekend, several key Senate Republicans did come to Rumsfeld's defense, including the chairman of the Senate Armed Services Committee, John Warner of Virginia.

SEN. JOHN WARNER: I assure you that in the three-plus years that I have worked with Secretary Rumsfeld, we've had our differences. We still have some. But I have confidence in my ability and his ability to continue to work together as a team for the common goals of the men and women of the armed forces and to support the goals of the commander-in-chief.

SPENCER MICHELS: Some former senior military officers have also blasted Rumsfeld, including Gen. Norman Schwarzkopf, the architect of the first Gulf War.

GEN. NORMAN SCHWARZKOPF: I was angry about the words of the secretary of defense when he laid it all on the army. I mean, as if he as the secretary of defense didn't have anything to do with the army, as if the army was over there doing it themselves, screwing up.

SPENCER MICHELS: William Kristol, the editor of the Weekly Standard and an influential thinker in conservative ranks, rounded out the chorus last week with an opinion page piece in the Washington Post. Kristol wrote: "Actually, we have a pretty terrific Army. It's performed a lot better in this war than the secretary of defense has." None of these criticisms has included the man who ultimately makes the decisions and who recently asked Rumsfeld to stay on at the Pentagon. Today, the president said he has full confidence in his defense chief.

PRESIDENT GEORGE W. BUSH:And I believe he's doing a really fine job. The secretary of defense is a complex job. It's complex in times of peace, and it's complex even more so in times of war.

SPENCER MICHELS: It was recently revealed that Rumsfeld had not been personally signing the letters of condolence sent to the families of soldiers and Marines killed in action, delegating that solemn duty to a machine. Nonetheless, the president said, Rumsfeld is not a callous man.

PRESIDENT GEORGE W. BUSH: I have seen the anguish in his... or heard the anguish in his voice and seen his eyes when we talk about, you know, the danger in Iraq and the fact that youngsters are over there in harm's way. And he is... he's a good, decent man. He's a caring fellow. You know, sometimes perhaps his demeanor is rough and gruff, but beneath that rough and gruff, no-nonsense demeanor is a good human being who cares deeply about the military and deeply about the grief that war causes.

GWEN IFILL: Donald Rumsfeld may be the Bush administration's most consistent lightning rod. Is that a good or a bad thing? For an analysis of the secretary's wartime performance, we get two views. Retired Marine Lieutenant General Gregory Newbold had a 30 year career in the military; his last assignment was as director of operations of the Joint Chiefs of Staff. And James Schlesinger was director of the CIA and then secretary of defense during the Nixon and Ford administrations. He now serves on the Defense Policy Board, which advises Secretary Rumsfeld. Secretary Schlesinger, how much of this dispute about Donald Rumsfeld is about personality and how much of it is about performance?

JAMES SCHLESINGER: Well, it's mostly about personality. There are a lot of people out there that do not like Donald Rumsfeld. You're getting a recycling of complaints that have gone back to the beginning of the administration. A lot of the press that talked about quagmire back in the days of the Afghanistan run-up and then in the early days of the war finally have... may have found the quagmire that they've been predicting or maybe they hoped that they've got a quagmire.

GWEN IFILL: So, in your opinion, Secretary Rumsfeld's doing a good job?

JAMES SCHLESINGER: Secretary Rumsfeld has done a good job. He gets an A for Afghanistan and an A for the invasion. For the post-invasion period, he probably gets a C-plus. All in all he's done a very good job.

GWEN IFILL: Gen. Newbold, personality or performance?

LT. GEN. GREGORY NEWBOLD (Ret.): I'm not sure you can separate the two completely. Unfortunately his personality has influenced the performance because in my view you need an open exchange of ideas where notions are maybe contrary to your own are solicited. And I don't think he's fostered an environment that does that. If there is poor advice offered, and therefore, poor decisions made, sometimes you end up where we are right now.

GWEN IFILL: You worked in the Pentagon under Secretary Rumsfeld or with Secretary Rumsfeld, give us an example of what you mean when you say the personality and the performance got mixed up with one another.

LT. GEN. GREGORY NEWBOLD (Ret.): Well, the climate is very important. I think an environment that fosters contrary opinions or that seeks to determine where advice may be different than your own is very important. Even when that advice isn't taken, the understanding that it may be offered-- whether it's from the Congress, from allies, from the media, from....

GWEN IFILL: From generals.

LT. GEN. GREGORY NEWBOLD (Ret.): Maybe even from generals. But from your commanders is very important. Certainly that didn't exist on many occasions.

GWEN IFILL: Mr. Secretary....

JAMES SCHLESINGER: On many occasions it certainly did exist. Tommy Franks gave him... the secretary his advice. It reshaped the invasion. General Abizaid gives him advice. Certainly Gen. Myers feels that way. There is a great deal of interaction between the secretary and his senior officers. He sometimes has a challenging style, but general officers should not be dismayed by his challenging style.

GWEN IFILL: Did we see his challenging style on view last week with his answer to the questions about armored vehicles? What did you make of that?

JAMES SCHLESINGER: Well, I think that that is basically a press frenzy. If you look at his answer in the beginning of the answer, what he did was to encourage the troops and say, I talked to the general officers about when we could get more armored vehicles. We are moving these armored vehicles from every part of the world in which they're not needed. We are increasing production of those armored vehicles. Then he moved into the point that you quoted. And I think that it's a misrepresentation of his views.

GWEN IFILL: Assuming you've seen the entire representation of what he said that day, what's your sense about that, General?

LT. GEN. GREGORY NEWBOLD (Ret.): I agree to some degree. That is, I think holding Secretary Rumsfeld accountable for the armor issue is a little bit akin to convicting Al Capone for tax evasion. There are many issues of much greater importance than that which the secretary I think should be held accountable. And the armor issue that's primarily a service issue.

GWEN IFILL: When we talk about -- we'll move on the big ones. But I'm also curious about another issue which kind of bubbled up over the weekend which is the signing sing auto pen to sign letters of condolences to fallen soldiers' families. When you were secretary did you sign those letters by yourself? Did you have to sign any of them --

JAMES SCHLESINGER: There was no combat while I was secretary.

GWEN IFILL: Do you think it was a good idea --

JAMES SCHLESINGER: I don't think that is a good idea. I think that the fact that the secretary is now signing those letters personally indicates that he did not think it was a good idea in retrospect.

GWEN IFILL: Is that something that is emblematic of anything to you?

LT. GEN. GREGORY NEWBOLD (Ret.): I'm not surprised by it. The same secretary, when asked if casualties bothered him said, well, sure they bother me but remember they're volunteers -- that's kind of a troubling approach to this. It he ought to show more sensitivity.

GWEN IFILL: What did you make of the criticisms coming from Capitol Hill last week specifically and most kind of noticeably from Republicans -- Senators Hagel and McCain and Lott and Sen. Collins all saying in varying degrees that their sense of confidence in Secretary Rumsfeld has been shaken?

JAMES SCHLESINGER: The real question is whether the president has confidence in Secretary Rumsfeld. And he answered that today. He serves at the pleasure of the president, and I think that you've got the answer. He will continue to serve as secretary of defense.

GWEN IFILL: Isn't it better to get along with people on the Hill?

JAMES SCHLESINGER: It is better to get along with people on the hill but he's getting along with most of them. You saw the quote from John Warner. Of the four people on television yesterday, the ranking Democrats and the two chairmen... none of them called for his resignation.

GWEN IFILL: General, when you hear people talking about loss of confidence whether on the hill or other places perhaps within the Pentagon itself, do you find that significant?

LT. GEN. GREGORY NEWBOLD (Ret.): I hear a lot of those comments. I think the issue probably is as Secretary Schlesinger's articulated. The president clearly has great confidence in the secretary. I think he'll weather this storm. He'll certainly maintain his position through the Iraqi elections. How many more missteps he can take I'm not certain. He's at the pleasure of the president.

GWEN IFILL: Do you have confidence in the secretary?

LT. GEN. GREGORY NEWBOLD (Ret.): Confidence? I have felt for years that we didn't have the secretary of defense who was the right one to develop the plans to conduct our operations the way we needed to. My opinion hasn't changed.

GWEN IFILL: Let me flip this a little bit because you are supportive of the secretary and you are not. So, let me ask you, Secretary Schlesinger, what would you consider to be the secretary's weak points?

JAMES SCHLESINGER: Well, I think that as I indicated earlier the planning for the post-war period was not complete. And the reaction when the insurgency started was somewhat slow. But the secretary, as soon as those IED's started going off, he established a committee to look into technology that would deal with those IED's. He has been quite responsive.

GWEN IFILL: The IED's being the --

JAMES SCHLESINGER: Explosive devices that are along the roads. It's interesting that now that we're past Ramadan that the number of incidents is down to pre-Ramadan levels and that as Gen. Casey said yesterday at the Pentagon, that of the 18 provinces, 14 of them are quite calm.

GWEN IFILL: Gen. Newbold, what would you say Secretary Rumsfeld's strong points are?

LT. GEN. GREGORY NEWBOLD (Ret.): He had a great vision when he came into the Pentagon. I think his ideas on changing the character of the way operations were conducted and the way that the Pentagon processes were conducted were right on target. If you listed the ten top priorities for Secretary Rumsfeld, I would have agreed with all ten of them. It's not what he wished to accomplish. It's probably how.

GWEN IFILL: When you talk about one of his priorities one of them is the transformation of the military which is a grand term which means in some ways making it kind of a leaner, lighter, more efficient military. Is that something which can co-exist in your opinion, General, with conducting a multi-front open ended war?

LT. GEN. GREGORY NEWBOLD (Ret.): I think transformation was probably not fully articulated. It's a desirable goal but there was not a lot behind it. It tended to be platform-centric rather than ....

GWEN IFILL: What does that mean?

LT. GEN. GREGORY NEWBOLD (Ret.): Aircraft, submarines, ships. I think a more complete transformation has changed the culture of an institution, to add to its mental agility not just its speed of movement but speed of thinking.

GWEN IFILL: Can it work now, while we're at war?

LT. GEN. GREGORY NEWBOLD (Ret.): Absolutely. It needs to work while we're at war as much as any other time.

GWEN IFILL: Secretary Schlesinger?

JAMES SCHLESINGER: Well, I think that Gen. Shoemaker is making some of those changes in the army. The army has been a slow institution to adjust. But he is moving away from divisions towards brigades that can be moved independently. Indeed for the Navy and the Air Force, this has been a platform centric adjustment but the Navy and the Air Force are about platforms whereas the Marines and the Army are about organization and people.

GWEN IFILL: Has Secretary Rumsfeld managed this insurgency well, the idea of troop levels? Is the American military, as it is positioned right now in Iraq, where it ought ton? Is he being managed correctly?

JAMES SCHLESINGER: I think that he has had as much in the way of force in Iraq as the limits of the budget permit. People must remember that there's been a 40 percent increase in the budget and that there are those over in the executive office who limit the funds for the Department of Defense; manpower still is the most expensive part of our military establishment as opposed to other military establishments.

GWEN IFILL: Gen. Newbold, when it comes to managing the insurgency and the appropriate troop levels, do you think that Secretary Rumsfeld has done all he can or has he been hamstrung by finances?

LT. GEN. GREGORY NEWBOLD (Ret.): I think the war should probably dictate our troop levels. I think we need to provide what's required for the fight. I think they've been a bit shocked-and-awed by what's happened in the post Baghdad situation. And although some people I respect deeply have said we have sufficient force over there, my personal opinion is the facts belie that.

GWEN IFILL: And so you think there should be more troops and do you hold Secretary Rumsfeld responsible for that?

LT. GEN. GREGORY NEWBOLD (Ret.): I hold two people responsible. The environment was created by Secretary Rumsfeld but senior military leaders are not gagged. They need to be able to speak out forcefully and if that's not sufficient, then to take other....

GWEN IFILL: Are senior military leaders intimidated?

LT. GEN. GREGORY NEWBOLD (Ret.): They certainly have been.

GWEN IFILL: One final question to both of you quickly which is whether... you're right. Secretary Rumsfeld comes under attack periodically. This isn't the first time we've had some version of this discussion. Would a change at the top if he were to be replaced make a difference in your opinion in terms of U.S. Administration policy, military policy?

JAMES SCHLESINGER: I don't think so. The policies come from the president. I think that the removal of Secretary Rumsfeld would be a boon to all of our enemies around the world. They would rejoice in the caves in which al-Qaida leaders hide; that our enemies in the Middle East would rejoice. He has become a symbol of American steadfastness, and I think that that would be tragedy if he were to be removed.

GWEN IFILL: General?

LT. GEN. GREGORY NEWBOLD (Ret.): I would not make a change until after the Iraqi elections. It would depend on who became the new secretary of defense and the forcefulness with which they articulated the importance of sticking with a policy of strength. I think that is absolutely critical so it depends on who would replace him.

GWEN IFILL: Gen. Newbold and Secretary Schlesinger, thank you both very much.

LT. GEN. GREGORY NEWBOLD (Ret.): Thank you.

FOCUS - COMMUNITY INVESTMENT

GWEN IFILL: Next tonight, possible changes in banking rules that could affect inner-city and rural communities. Tom Bearden has our story.

TOM BEARDEN: So this is your new house.

WOMAN: Yes,

TOM BEARDEN: Are you excited?

WOMAN: Very much.

TOM BEARDEN: Nanette Sonnier is about to become a homeowner for the very first time. She's doing it through a nonprofit organization called the Southern Mutual Help Association, which works with banks to finance mortgages for low-income workers.

TOM BEARDEN: Did you ever think you could have your own home?

NANETTE SONNIER: No, never. Because I had no credit, I had nosavings. So when I got the phone call that it had been approved, it just blew me away.

TOM BEARDEN: Sonnier lives in New Iberia, an economically depressed, rural community in southern Louisiana, known for sugar cane, Cajun music and Tabasco sauce. Some of its neighborhoods were pretty much ignored by the banking community, until Congress took action three decades ago. The Community Reinvestment Act was passed in 1977 to stop a practice called "red-lining," where some lenders would refuse to do business in certain geographic areas. The federal law requires lenders to offer loans, provide services and make investments in low- income communities. Banks must meet all three of those goals in order to receive a satisfactory rating from their bank regulators. Since the CRA was enacted, banks have put more than $1.5 trillion into community development nationwide. But now, some federal regulators want to loosen the CRA rules, and community activists think that could be the beginning of the end of the CRA. Lorna Bourg is the director of Southern Mutual Help. She says the CRA has forced regional banks to spend tens of millions of dollars in her region that they otherwise wouldn't have.

LORNA BOURG: The Community Reinvestment Act, as it is now, is good for business. It's good for all the segments in our community. I don't think we want an America where certain people perceive they can't get in to be a part of the American dream. If our bank partners are not induced to invest in difficult markets, then they're going to cream off the top of the market, and that's what we used to see many years ago.

SPOKESMAN: As you know, we already do seven days a week to help out people...

TOM BEARDEN: One of Bourg's bank partners is Rusty Cloutier, president of MidSouth Bank in Louisiana. Cloutier says CRA reporting requirements make it difficult for banks of his size to survive. He estimates he spends $75,000 a year just to fill out the paperwork to comply.

RUSTY CLOUTIER, MidSouth Bank: They keep putting these regulations on these small banks and saying you've got to jump through these hoops to protect the community, when in fact, what's happening is they're losing their community banks because they're saying that "if we've got to do all this stuff, that's not really servicing the community."

TOM BEARDEN: He says he has no problem with two of the three CRA requirements: Making loans and doing community service. It's the third requirement, investing, which he says is unfair. Cloutier's bank is required to put about a half million dollars a year in approved CRA investments. These are usually grants to organizations, like Southern Mutual, which are involved in community development. The banks often receive a lower rate of return on investments than they do on loans. But because many times there aren't enough projects in small communities to qualify for CRA credit, Cloutier is forced to put money into projects as far away as Detroit or Washington, DC.

RUSTY CLOUTIER: We're glad to be involved in investing in our communities, but to hold us to an investment test of buying investments in other parts of the country just doesn't make a lot of sense to me.

TOM BEARDEN: Some community leaders concede that minor tweaking of the CRA. Might be in order, but they say what the federal deposit insurance corporation is considering goes too far. The FDIC has proposed exempting about 850 banks that have assets under $1 billion from having to make CRA investments. Large banks, over $1 billion would still be required to do so. The FDIC's Donna Gambrell says the proposed change will not mean that community banks can abandon their CRA responsibilities.

DONNA GAMBRELL: What it does though, is give banks the flexibility to-- based on their own capacity, their resources, that they identify is needs within the community-- to say we may not have the resources or the capability to do investment, but we clearly have identified a need to make loans, community development loans in this community, and therefore that's where we're going to place our focus and our emphasis.

TOM BEARDEN: What's the genesis of this rule change? Where did it come from?

DONNA GAMBRELL: Well, I think that there's been a lot of discussion for a lot of years about the things about the Community Reinvestment Act that weren't working.

TOM BEARDEN: Mark Pinsky is president of the National Community Capital Association, which helps local organizations revitalize economically depressed areas. He predicts that many projects simply won't get funded if the requirements are dropped.

MARK PINSKY: We go out and talk to the banks and we ask them why they're doing this and there are people in banks, a lot of bankers who are really committed to this kind of work. But as institutions, they'll tell you up front that the Community Reinvestment Act is the reason they're putting this money into these markets.

TOM BEARDEN: Pinsky points to projects like the Gateway Arts District just north of Washington, DC, as one example. Once a neighborhood overrun with pawn shops and liquor stores, it's now being rebuilt, in part from CRA investment money. It will eventually have theaters, restaurants, low- income housing and workspace for artists. It's expected to create many new jobs, and additional investment possibilities.

MARK PINSKY: I once had a banker say to me a few years ago, "you know, we've finally come to understand that you're serving our under market, that you're developing a market that's going to be useful to us down the road." We specialize in serving markets that are, as I said, just outside the mainstream and trying to season them so that those markets can enter the economic mainstream and so that the economic mainstream can find opportunity there. We think everybody wins.

TOM BEARDEN: Back in Louisiana, Lorna Bourg says that the FDIC rule change would be especially disastrous for rural communities like New Iberia. She says the area would go from having 21 banks that have to meet the CRA investment test, to just one.

LORNA BOURG: You know, we've had over $1 trillion in investment into our states and into our communities that never would have seen it if it hadn't been for the Community Reinvestment Act. I think, you know, that's a pathway back to red-lining that we had before. And I think from a rural practitioner's viewpoint, it's disastrous for America.

TOM BEARDEN: If it ain't broke, don't fix it?

LORNA BOURG: If it ain't broke, don't fix it, for sure.

SPOKESMAN: Congratulations my man. If they can see you now.

TOM BEARDEN: Cloutier, who was recently honored by the city of Lafayette for his civic work, says he will still invest in his community. But he says activists are going after the wrong target; they should be demanding more investment money from urban mega-banks.

RUSTY CLOUTIER: Here's what amazes me. The community activists are spending all their time on this when the ten largest banks in America control 77 percent of the deposits. I mean, that's where the money is. The fact is I do serve my community. We're going to raise about $250,000 next week to feed and house the homeless. We do that automatically. Wewould do that if we had a CRA Act or not because those are just things that are right to do and to improve the community and to make it a better place to live.

TOM BEARDEN: He says the community will really suffer if small banks are forced to sell out to the large mega-banks.

RUSTY CLOUTIER: Was rural America better off when it had the local stores in town that supported everything or was it better off when Wal-mart came in? Was it better off when they had the local pharmacy or was it better off when the mega- pharmacies came in and took over the community?

SPOKESPERSON: Have a nice day.

SPOKESPERSON: Thanks.

SPOKESPERSON: You're welcome.

TOM BEARDEN: The FDIC could decide within the next several weeks whether to adopt the C.R.A. Rule change.

FOCUS - LEFT BEHIND

GWEN IFILL: Finally tonight, the hot bestsellers about the apocalypse. Arts Correspondent Jeffrey Brown has that.

JEFFREY BROWN: As the novel "Left Behind" opens, airline pilot Rayford Steele is told that many of his passengers are suddenly missing. The biblical rapture has occurred, when millions of born-again Christians are taken up to heaven. Everyone else has been left behind. The novel, published in 1995, was the first in a series of 12 apocalyptic thrillers based on the book of revelations and other biblical texts, following Rayford Steele and other characters through a seven-year period of tribulations until the return of Jesus to Earth in the book "Glorious Appearing," released this spring. Altogether the series has been a publishing phenomenon, more than 60 million copies sold including spin-offs for children's books. The authors are 78-year-old Tim LaHaye, a former pastor and co-founder of the Moral Majority, and 54-year-old Jerry Jenkins, a novelist and biographer. For each book, LaHaye provided a long outline of biblical prophecy and commentary, and Jenkins created the characters and wrote the stories. We spoke at this year's Christian Book Sellers Association Convention in Atlanta.

JEFFREY BROWN: Dr. LaHaye, how did you see your mission in writing these books? What were you trying to do?

TIIM LA HAYE: I'm trying to use fiction to communicate Bible teaching on the future. God has a wonderful plan for the future of mankind but most people don't even know about it. But it's in the pages of the Bible. We tried to flesh it out and use fiction as a vehicle to the mind to get it through to people.

JEFFREY BROWN: And why was fiction the right way to do it?

TIIM LA HAYE: Because there's so many fiction readers who weren't reading my non-fiction. I had written 50 non-fiction books. But if you're going to fish, you have to fish where the fish are. And I saw this army of millions of people out here reading fiction so I thought, "Hey, why can't we use fiction?"

JEFFREY BROWN: Mr. Jenkins, you're the novelist. Why does it work as fiction?

JERRY JENKINS: Well, I think people are looking for something beyond themselves. We live in a very fearful time. And even before 9/11, I mean, our books came out in the fall of '95, and they were pretty successful even before 9/11. There was a blip in sales and interest during that time. There was also at the end of the century and the millennium. But clearly people are worried about the future. They wonder about the future. I think they're intrigued by what the Bible might say about it. But for it to become the phenomenon that it has, I think it must be working. People love the characters, and they tell us they just can't wait to keep turning the pages and find out what happens next.

JEFFREY BROWN: The series has been credited with opening the door for Christian fiction into the mainstream culture. But it's also provoked controversy. The fictional anti-Christ rises to power as the head of the United Nations. The pope serves as his assistant. And Jews by the thousands convert to Christianity. In "Glorious Appearing," Jesus wreaks vengeance in a bloody slaughter of the soldiers of the anti-Christ. A number of scholars have questions LaHaye and Jenkins' scriptural interpretations. Evangelical author Os Guinness was attending the book sellers convention.

OS GUINNESS: It literally is junk food for the soul. And it doesn't represent the best of evangelicalism. It gives the impression that evangelicals are all irrational fundamentalists who have this apocalyptic world view, and I think it's disastrous.

JEFFREY BROWN: LaHaye and Jenkins insist they have been true to the Bible.

TIIM LA HAYE: True to the Bible is that it's literally interpreted. We believe that God intended us to interpret the Bible literally.

JERRY JENKINS: The idea of taking it literally where you can. I mean, it's not, as he often points out, it's not a wooden literalism where, for instance, in "the glorious appearing," prophecy says that Jesus will slay his enemies with the sword that comes from his mouth. We don't believe there's a literal sword in his mouth, but that that's the word of God.

JEFFREY BROWN: There's been criticism of your books for focusing on a vengeful Jesus-- thousands of people are killed by his words-- rather than focusing on a loving Jesus.

JERRY JENKINS: It is a little bit unfair. People will look at Book 12, the one scene where Jesus, you know, wins the battle, and say, you know, "This is a picture of Jesus that maybe we've made up." It's in the prophecy. It's in the scriptures. It's the well-rounded version of the Jesus of the scriptures. He's a loving, merciful God and at some point he's the God of justice.

JEFFREY BROWN: Another criticism of the books is that you set up a kind of us against them. You're either with us or against us. So there's a sort of division inherent.

TIIM LA HAYE: Jeff, we didn't invent that. That's right in the Bible. You either are a believer or an unbeliever. And the thing about God, he's not... he's not discretionary. That is, he doesn't just accept certain people because they're of a certain race or anything. All men have the same opportunity. They can accept Jesus Christ or they can reject Him. But they have to spend eternity in the light of what decision they've made.

JERRY JENKINS: That is the crucible of people who believe this. In my mind, I call it the crucible of the evangelical because there's no question that's a divisive and can be an offensive message, to say that we believe Jesus when he said he was the way, the truth and the life and that no man comes to God but through him. We live in a pluralistic society. We're not against people practicing their own faith, being devout in their own religion. We feel an obligation to tell this... what we believe is the truth, and then what they do with it is up to them. It's between them and God.

JEFFREY BROWN: Do you think that evangelicals have felt shunned or neglected or even disrespected by the mainstream culture, and therefore were hungry for what you have to offer?

TIIM LA HAYE: It was more, I think, more prevalent twenty-five, thirty years. And I've watched it gradually as the people in media begin to recognize we are here. And the sale of our books and 60 million copies all of a sudden somebody is reading us. They're not just buying them and trashing them. They're reading these books. And the contagious spirit is a writer's dream, where a person reads a book and then they've got all these friends they want to read the book. That's great for sales, and it's great for carrying on the ministry.

JERRY JENKINS: You know, I tend to hesitate to make the media a target because sometimes it's too easy. I mean, so often the mainstream media talks about evangelicals as sort of a strange little sub- group. But the sales of our books and the success of Mel Gibson's movie, I think, didn't really find a market as much as reveal a market. It didn't surprise us. We know these people are out there.

JEFFREY BROWN: Dr. LaHaye, I know you've talked about wanting the books to reach the individuals and their faith. But do you also want it to have an impact on the larger society and political culture?

TIIM LA HAYE: Well, yes, I think that they will, as they study the Bible, they'll learn the principles of God. We're in a great conflict today, which is a whole subject unto itself, as to whether or not there are moral absolutes and there are rights and wrongs. We, of course, believe that there are based on biblical principles.

JEFFREY BROWN: Tim LaHaye and Jerry Jenkins, thank you very much.

JERRY JENKINS: Thank you.

TIIM LA HAYE: Our pleasure.

RECAP

GWEN IFILL: Again, the major developments of the day: Iraqi police rounded up scores of suspects after two deadly car bombs on Sunday killed at least 66 people. Late today a new FDA warning said the painkiller naproxen may increase heart risks. The generic drug is sold under the brand name Alleve, among others. The FDA said patients should not exceed recommended doses or use the drug for more than ten days, unless directed to by a doctor. We'll see you online, and again here tomorrow evening. I'm Gwen Ifill. Thank you and good night.