The NewsHour with Jim Lehrer

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. . . . . . . . . . . And by the corporation for public broadcasting, his program was also made possible by contributions to your PBS station from viewers like you. Thank you. House and Senate negotiators rushed today to finalize a tax cut bill Republican leaders wanted passed before the memorial day recess. It would lower taxes by more than $1.3 trillion over 11 years, but there were sticking points over the top income tax rate and child tax credits. We'll have more on this story right after the news summary. Economic growth in the first quarter was slower than projected. The Commerce Department said today the gross domestic product grew at an annual rate of just 1.3% instead of two. Last night, Federal Reserve Chairman Alan Greenspan warned

the slowdown could continue. He spoke to a group of economists in New York. The period of subpar economic growth is not yet over. And we are not free of the risk that economic weakness will be greater than currently anticipated, requiring further policy response. The Fed's Open Market Committee has cut interest rates five times this year and an effort to spur the economy it meets again in late June. President Bush today urged military leaders to be visionary and to embrace high-tech advances. He did so in the commencement address at the U.S. Naval Academy in Annapolis. He said the armed forces must rely less on size and more on speed and precision weapons. And he said the need for change does not end there. Building a 21st century military will require more of the new weapons.

It will also require a renewed spirit of innovation in our Officer Corps. We cannot transform our military using old weapons and old plans. Nor can we do it with an old bureaucratic mindset that frustrates the creativity and entrepreneurship that a 21st century military will need. The President is awaiting results of a military strategy review by Defense Secretary Rumsfeld and will talk to the Secretary later in the program tonight. The Prime Minister of India today invited Pakistan's military ruler to hold talks on Kashmir the first in two years. Pakistan called it a welcome step. Both nations have nuclear weapons and both claim parts of Kashmir. Since 1947, they fought two wars over that region. Earlier this week, India declared an end to a six-month ceasefire in Kashmir. Macedonia's army claimed a victory today over ethnic Albanian rebels. And army spokesman said they'd been forced out

of villages close to the border with Kosovo after heavy fighting. We have a report from Vera Frankl of Associated Press Television News. The second day of a new Macedonian offensive against Albanian rebels in the board of a village of Buck's Sensei brought a ferocious ground and air bombardment. Helicopter gunship used missiles and high-caliber machine gun fire. Thanks on the ground, provide this support. Government officials reported heavy Albanian casualties. Short of resources to match the Macedonians and with no international support, the rebels were applied with submachine gun and other small arms fire. This is not the first offensive against Albanian insurgents since fighting began in February but it made me to be the most effective. About 2,000 refugees left the battle zone and crossed into a neighboring Serbia

overnight, a thousand more left today. And Atlanta today, a federal appeals court lifted an injunction against publishing the wind ungone. The book's author, Alice Randall, calls it a parody of Margaret Mitchell's Civil War novel Gone with the Wind. It's written from a slave's point of view. Mitchell's estate claimed a copyright violation, but Randall's lawyer said it was a free speech issue. We'll have more on this story later in the program tonight. Two Americans made mountain climbing history today in Nepal. Eric Weynmeier of Colorado became the first blind person to scale Mount Everest and in a separate expedition, Sherman Bull of Connecticut became the oldest person to climb the tallest mountain on earth, E64 years old. One of the world's oldest pairs of blue jeans is now the most expensive. Levi Strauss paid more than $46,000 last night for a pair it made in the early 1880s. They'd been found in the mud of an old Nevada mining town and were sold during an online auction on eBay.

They sold for a dollar when they were new, some 120 years ago. And that's it for the new summer tonight. Now it's on to wrapping up the tax cut, the changes in the Senate, mark shields in Rich Lowry, defense secretary Rumsfeld, and the wind-done gone to speed. MUSIC Call me home in on tax cuts. The grounds of the U.S. Capitol work quiet today. It was a sharp contrast to the flurry of activity yesterday as members of both parties reacted to the announcement by Vermont Senator Jim Jeffords that he would leave the Republican Party turning over control of the Senate to the Democrats. Well, let's get started. Today, attention centered on the members of the House and Senate's tax writing committees. For the last several days, they've been at work on a compromised version of an expected 11-year, $1.35 trillion tax cut package. Today, they felt the extra pressure to complete a bill

so that members can vote on it and leave town for their week-long memorial day recess. Iowa Republican Charles Grassley heads the Senate's finance committee. And I feel that we're making very, very real progress this morning and maybe quite candidly, the first time that we've been able to really make some breakthrough. So I hope that we'll be very successful. Do you think you'll get it done today? Our goal is to try to get it. That's all I've said. The answer is, of course, check with us tomorrow. Grassley's counterpart is House Ways and Means Chairman Bill Thomas of California. In any of these negotiations where there's a will, there's a will. And I believe that clearly, between last night and today, there's an expression of a will to do it. And we're simply going to do it. The problem for the House and Senate negotiators is that the two bodies approved tax cut plans with significant differences. Mr. Pratt. But both conform to the broad outlines proposed by President Bush. They agreed to cuts in top tax rates. Marriage penalty tax relief, repeal of the estate tax,

and doubling the child tax credit to $1,000. However, the House passed version mirrors the president's call to lower the top tax rate from 39.6% to 33%. But the Senate version offers a smaller cut to 36%. Senate moderates succeeded in diverting the $250 billion saved there to fund more education programs over the next 10 years. Republican Senator Olympia Snow of Maine says the negotiators may compromise somewhere in the middle. It's a question of whether or not that marginal rate would be come down from the 36. It's in the Senate bill to 35 and up from the bill and the House representatives from 33 to 35. But another key issue to the negotiations was the desire of Senate moderates to focus more of the tax cuts on lower income people. A proposal by Senator Snow would refund the child tax credit to even the lowest income families who may already pay no income taxes at all.

One of my major issues is the refundability of the child tax credit, and I know that's one of the key issues of differences in disagreement with the House representatives. And I feel very strongly about that provision, because I do think it will benefit those making minimum wage, those between 10 and 20,000. It will benefit 10 million more children than the House representatives. Thank you. For their part, many Democrats kept to the a long standing position that the tax cut is too large. Congressman Charles Wrangle of New York is himself one of the tax bill negotiators. This tax bill, no matter how you look at it, is going to impact the ability of the federal government to fund programs for the next 10 or 20 years. Late this afternoon, House leaders told members a compromised tax cut plan was nearly ready. And members should expect to vote on it in the wee hours of tomorrow morning. The Senate also is prepared to vote tomorrow. Passage of the bill would clear the way for Senator Jim Jeffords power shifting departure

from the ranks of Senate Republicans, because he said he would officially become an independent once Congress approves a tax cut plan and sends it to President Bush for his signature. Now, more on that big Senate shake up into Margaret Warner. Senator Jeffords decision to switch from Republican to independent will trigger wholesale changes in Senate power and organization. For a roadmap of what lies ahead, we turn to two veteran Congress watchers, Norman Ornstein, a senior fellow at the American Enterprise Institute, and Sarah Binder is a fellow in governmental studies at the Brookings Institution. Welcome to both. Norman, as Kwame just reported, as long as the tax bill gets done, Jeffords set June 5th is the day his switch becomes official. What happens to them? We have some elements of this set in the unique power sharing arrangement that the leaders of the Senate worked out when this tie occurred back in January. Automatically, the majority leader's position

will switch to Tom Dashell. Automatically, the committee chairs will change. They have a lot of other things to work out, however, and what will have to be done in a resolution on the Senate floor, including the ratios of the committee's how many Democrats to Republicans now there, even Republicans would like to keep it that way. The staff arrangements, they're now even. And unless and until they work them out, the numbers revert to what they were before this Congress began, which means the freshmen sit around with no assignments, some committees have more Democrats than Republicans and vice versa. And this resolution, however, is something that could be filibustered, is that right? Potentially, it could be filibustered. It has to come to a full Senate for full vote. The reality, neither side wants to see the full lustre. Both sides have an incentive to get the committees up and running, more likely it'll be negotiated by Dashell in their move on. So where are we likely, once these committee chairmen ships switch, where are we likely to see a pretty visible and immediate impact right away? I think the biggest impact when we felt on the judiciary committee. And we'll see it on the fate of President Bush's judicial nominees to fill the federal event.

Democrats, under Missouri, Pat Leahy, there's some talk, Joe Biden, for reasserts seniority and take that committee, more likely it's Pat Leahy. Democrats are gaining incredible procedural control over those nominations. And just to say, Pat Leahy would then take over from Warren Hatch who has been the chairman, right? Now on a positive issue, you could get around the committee, you could get around the leadership of me beyond the floor, not so nominations. What Pat Leahy wants and what those committee Democrat wants, that's going to be pivotal. They're going to slow things down, they're going to listen to the ABA. They're going to let Democratic senators veto or blue slip these nominees. Leahy said, I don't want an ideological hard core right or hard core left. Are they looking for centrist nominees? All right, Norm, so where are we likely then to see the Democrats with their own agenda? In other words, which committees might be the center of that kind of? In policy terms, the first place we're going to look is an education and health, and a committee that is education, health, labor, and pensions, basically. That's a committee that Senator Jeffards has chaired, now he moves over to the Environment Committee,

and Ted Kennedy becomes chairman yet again. And we're going to see this actually first, I think, very early on the Senate floor when a new majority leader, Tom Dashow, brings up the patience bill of rights that has been negotiated with the Democratic leadership's ascent between John McCain, Ted Kennedy, and John Edwards of North Carolina. The administration has opposed this, and actually Senator Jeffards wasn't forward either. They'll be able to bring that up. Senator Kennedy has other issues in the health arena that he will push, including doing something about the uninsured, and ultimately a very different prescription drug benefit than the administration would like. We'll see the minimum wage come up, and he will clearly push very aggressively for more funding and education, which is one of the main issues that cause Senator Jeffards to switch. All right, what about back to Bush's agenda? Say his energy plan. What are the committees that don't have jurisdiction over that and what are the changes? Well, we'll see a lot of action in the energy and after resources committee, we'll see some environment public works committee. The big highlight issue there are to drilling.

That's for to be dead. All right, let's take a look at who's gonna, this is the energy committee. Senator Frank Murkowski has been the chairman and Senator Jeff Benjamin of New Mexico will become the chairman. Murkowski from Alaska has been much more supportive of drilling and resource extraction development. Benjamin has a record on energy efficiency, renewable resources, Democrats have come out against really the tenor of the Bush plan. We're gonna see the brakes put in a lot of good careful scrutiny of that plan. It hasn't been amended. Even called for higher fuel standards for SUVs. He has and he'll push for tax incentives there. And it'll be a very different, he will tilt away from offshore oil drilling and away from drilling in the Arctic National Wildlife Reserve towards conservation, towards alternative fuel sources and for some of these fuel standards. We'll also see an impact of the energy bill in the Environment Committee though as Sarah suggested. There it's not as huge a change in the chairmanship actually. Senator Bob Smith is a very conservative Republican, actually switched to independence and then back

to Republican kept this committee but he's been a strong environmentalist. This is the prize now for Jim Jeffords. Harry Reid is gonna be the Democratic majority. Whip, he would have been the chair. He's given this up to get Jeffords over. Jeffords is an ardent environmentalist and the difference here will probably come in terms of hearings, tilt probably criticism of what the administration is doing in Kyoto and global warming, but also an attempt to make that energy plan something that does not do away with environmental safeguards. That points out one of the powers these committee chairman have, which is simply to make an issue front and center to hold hearings to call the kind of witnesses they want. We'll see this on oversight across committees. We'll see it on arm services on the whole issue of missile defense. Well, let's talk about that now because that of course is another item on President Bush's agenda, getting National Missile Defense and also this revamping of the military. But tell us about the committee. Clearly on this defense, take the arm services, we're moving from John Warner, classic pro defense, Senator to Carl Levin,

who's a true defense policy expert. He's been very vocal on retaining ABM treaty and that's at the heart of the debate over missile defense. That plan's gonna slow down and will be really scrutinized by Levin in his committee. But ironically, Margaret, Carl Levin is a military reformer and he will probably be more sympathetic towards the kind of revamping to get a 21st century military. The president Bush was talking about earlier that Don Rumsfeld will talk about later tonight on the show, then some of the Republicans, including now Minority Leader Trent Lot, who's been very unhappy about what Rumsfeld is doing. So he may have an ally here in an unexpected way. And what about on-farm relations? We'll see much of the grounds we'll change here from Helms, Jesse Helman, all the way to Joe Biden from Delaware, who's been, we call him an internationalist. He's been very vocal on issues, particularly the ABM and missile defense, Louis visiting Kosovo and so forth. They're gonna be a lot of oversight

of what the administration wants to do and where it wants to do it. Finally, we get to the whole area of budget, tax, finance. You know, with the budget blueprint already approved and the tax cut apparently on its way to finally being finalized, how much of a difference will those committee shifts really need? Starting in the finance committee, which is the most significant committee for most of Bush's priorities. He wants a second tax cut down the road. Max Baucus, the Democrat, who's been cooperative with Chuck Grassley here, is gonna be less cooperative about a second tax cut that includes substantial business breaks. But this committee also has trade in its jurisdiction. Top Bush priority. Fast track now called trade promotion authority to give him flexibility to negotiate agreements for up and down votes in Congress. Max Baucus, much less sympathetic to that than Grassley, more concerned about lumber and wheat in Montana. He's up for reelection and social security, further down the road. Bush creating this commission wanting private accounts.

Chuck Grassley would have used this committee as a vehicle to try and promote those things. Baucus will probably move in exactly the opposite direction. So we're at the crossroads there. The budget committee, we've dealt with a budget this year. It's not a significant right in the short term. Although Kent Conrad will be a very vocal person using the bully pulpit of that committee to criticize the budget priorities of the president. But on appropriations, while there's no substantial difference. Now let's explain. Appropriations is the committee that actually decides how the money that was in the budget resolution, how that's actually spent. And in every specific, and here Democrats and Republicans on the committee tend to think alike. They like to spend. So we're not going to see a dramatic difference. But what you're going to see is an attempt to reorder priorities with the now most senior senator who will become the president of pro-temporia, Robert Verde of West Virginia, moving over from Ted Stevens. He doesn't like the president's spending priorities and we can expect more confrontation, a little bit further down the road, probably in August, September, October

when these appropriations bills come up. So it's a big change there as well. Finally, Sarah, I've been to just a little perspective here. Now the committee chairman's power certainly is anything but absolute in the Senate. Well, I mean, you can't issues. In other words, the minority party can still get its votes out there on the floor just through the but amendment process. Democrats though are gaining an agenda platform. They're gaining a way to put their issues back on the agenda. Even if they're going to run into stumbling blocks when they go to conference with the house, they have a platform. It allows them to define their differences with the Republicans. That's just as important to them going into the elections in 2002. Got to leave it there. Thank you both very much. Thank you. Sure, thank you. Still to come on the news hour tonight. Analysis by Mark Shields and Rich Lowry, a conversation with Defense Secretary Rumsfeld and the wind-ung-gone case. Grace Juarez is with Mark and Rich tonight.

And that syndicated columnist Mark Shields and National Review Editor Rich Lowry, Paul Gigo, is on vacation. Well, we've had a little time to digest the news of the last 48 hours. See the outlines of the impact? What do you make of it? Well, it hurts. It's a big blow to the White House and to Trent Lott. And it's a little hard to finger exactly who specifically is responsible. But I think it would be a refreshing change. It's actually someone voluntarily took the fall for it. And I think that person would ideally be Trent Lott. It's his majority. Those lost on his watch, you can argue that he is an adequate sort of steward of a majority. But it's hard to see that he is well-suited to engaging in the sort of long-running trench warfare that's going to have to go on with Tom Dashl. So I think it would be refreshing if Trent Lott would step aside, I'm not sure whether it actually

happened or not. If that was to happen, is there an appropriate period of time that has to pass first? No, leadership challenges are funny things. They're always extremely unlikely until the moment they're done deals. And at the moment, this seems very unlikely. Because the mood in the Senate caucus at the moment, among Republicans, is to blame Jim Jeffords for this. I mean, he's the left most Republican in that caucus. There's no one to his left. And he's always been a bit of a quirky personality, a little mystifying to fellow Republicans. So at the moment, Jeffords is getting a blame and not a lot, but look, when committee chairman have to give up their chairmen's ships, have to maybe fire staff, there may be a whole new attitude. Mark? Well, I think Rich puts his finger at that. The recriminations are yet to come. They're not starting already. I mean, it's to who's to blame. And what you can see is the two camps kind of split happens in every losing political effort. This was a losing political effort to lose control

to the Senate, which was terribly important for the first time really, since Eisenhower, the Republicans controlled the House, the Senate, and the White House. And basically, it splits into two groups that what I call the converts and the heretic seekers. The heretic, they say, well, who are these people who don't believe? Be damned with them. Let them go. They get rid of Jim Jeffords in the world, the Lincoln, Shafees, the world. We don't need them. And the converts of those who are always kind of reaching out to the other side to bring people in to enlarge, say, look, we agree on more than we disagree. And it'll be interesting to me to see which side prevails. Because if, in fact, it is blamed upon, I think George W. Bush has a magnificent opportunity right now, which Democrats have terrified of. Democrats with scared different Bush came in, right, that he would clear the middle. They would absolutely isolate the two wings of the party. Is he still on an education? I mean, that's basically what he did with this education bill. Many concerned is complaining about it, criticizing it part, but it was a masterful when I even talked about it, because this is Jim Jeffords' week.

But if you started off the first three days and five days in office by stylistically reaching out to everybody, Bob Strauss, the former Democratic chairman for Texas and Kennedy, but other Democrats as well. And then he spent the next 95 days, he struck me as mobilizing his own troops. That's how he decided the same way Bill Clinton did in 1993. That's how he passed his economic package, his tax bill. That's how Bush decided to go on his tax bill. If, in fact, George Bush would decide to say, okay, this is the opening. I need to really become the middle right candidate president. I think it'd be a formidable, formidable political force. Right now, though, I don't think that's in the office. Earlier today, Vice President Cheney was asked about this. And he said, it's very easy to overestimate the impact of this, because it's the same 100 men and women who'll be walking back into that chamber in a few days' time. Let me figure that out. Well, that's certainly the silver lining perspective. And there's some truth to it.

There is a natural but extremely tenuous George Bush majority in the Senate. We saw it on the Ashcroft vote, where there are almost 60 votes to confirm. We saw it on the tax cut, where there's 62 votes to pass a bill that was fairly close to George W. Bush's original proposal. Something I think is completely wrong-headed is the commentary we're hearing that it was George Bush's move to the right, that somehow drove Jim Jeffords to this. I mean, the press loves writing the story. Prior to the Iowa caucus, George W. Bush was supposedly lurching to the right. In South Carolina, he supposedly lurch to the right. Now he's lurch to the right even more. If this were true, he'd be well beyond my right by now. But it's not true. And I think it'd be a big mistake for Bush to give up his agenda in light of this, because I think the biggest political advantage he has going for him is political character. I think that's the thing that matters to most to voters in this environment. And that means delivering on your promise. Promise is doing what you said you would do.

And Marcus interesting that you would highlight the education bill as the model for Bush, because I think the tax bill is a better model, because he racked up a pretty good bipartisan majority with the tax bill, but didn't have to give away nearly enough. And that's because he stuck to his guns from the beginning, and then he went over the heads of Congress, took his case directly to the people in the states of Democratic senators. This is a point of disagreement. I think that if there's one major shortcoming that President Bush has shown in his first four months in office, it's an ability to reach to the nation. He has not made a single persuasive message to the nation on any issue. And I think the case on the tax cut is not the toughest thing in the world to sell. You know that on Capitol Hill, and I'm going to ask you to do one thing, which is a patriot. I'm going to ask you to stand up and cut the taxes. And the major contributors will be displeased enormously. I think that Democrats are terrified that he'll follow something like the education model. And that's a specific, I'm talking about a sense

of preempting the middle politically, beginning with this Republican base, but reaching over across the aisle. If he did that, I mean, on other issues, the faith-based on the environment, where I think he has cacked very hard, right? I think that he'd be formidable. I don't see any indication he's going to do that. But wouldn't that move to the center that you're talking about, bring some comfort to Republicans who are representing states that Al Gore won in the last November? That's, I think you put your finger on it, right? In the sense that Jim Jeffords, basically, was coming from a state, all politics is local, it's Thomas P. O'Neill, Jr. once observed, and everybody's quoted him. He comes from the states that the Democrats he carried by an average of 16% in the last three presidential elections, just as conservative Democrats and moderate Democrats in the South and border states, when the Republicans became the dominant party at the presidential level, felt themselves more and more uncomfortable with a national party that was too liberal for them.

Jim Jeffords is obviously, has not changed over the 27 years, he's been in public life. He is a lot more liberal than his national party. So it is, it becomes a matter of survival, there's no doubt about it. The other thing that's gonna hit sooner or later, just as it hit the Democrats in 93 and 94 is this, that the guy in the White House is an up for three and a half years. I face reelection a year from November, and that's when they start to go nervous. We're having this conversation in what, by all accounts, would have been George Bush's week, if not for Jim's Jeffords. That was a little bit about taxes and how that got kind of lost in the sources. Well, it's a big victory for Bush. I had the education bill passed by about, with about 350 votes in the House, and I had the tax bill passed with 62 votes in the Senate, and the tax bill's watered down some, but the fact is the 10-year numbers close to what Bush wanted minus 300 billion or so, thanks to Jim Jeffords and others.

And it's also the first rate cut, major rate cut, since 1987. But in some ways, it's too early to tell when it comes to the tax cut, and we'll really have to discuss this in 2007, when a lot of its major provisions actually are supposed to kick in. So it's extremely backloaded, which I think is a political and economic peril for Bush. A political peril is that a lot of people won't be feeling the major benefits anytime soon. The economic peril is if the economy continues to soften, and perhaps go into a recession, there is nothing in this bill that serves as an economic incentive. So Bush will have sold this as a prescription for an economic downturn, and it actually has nothing that will do as it's sold. Rich is absolutely right. It would have been an enormous story that George W. Bush began his campaign with the tax cut, carried it through to an indifferent public through a campaign where he was criticized in his own party primary part by his principal challenger, and prevailed. I mean, that would have been a big story.

It was stepped on by Jim Jeffords. Your point about your question of a Dick Cheney. Dick Cheney is so wrong about the Senate, and as we all know, we just went through with the previous panel with Margaret on the new committee chairs. With the agenda is set, the hearings are held. Just think if there were Democratic Senate committees holding hearings on the California rate increases in electricity, and they were bringing in the natural gas companies, the electricity suppliers, and questioning the rate increases and the profits. That's the kind of thing that who controls the Senate determines. They set not only the terms of the legislative agenda, they set the terms to considerable degree of the public debate, and that's what the loss of that means to the Republicans a lot more than just Jim Jeffords. Well, for the record, Rich did say that Dick Cheney was put on his- No, no, he did. That's right. He did. I think Dick Cheney knows better. Well, there's a big strategic choice ahead for the White House here. Do they in effect make Tom Dashl their partner in power,

which will isolate the congressional Republicans and really move George Bush off his agenda, and ensure that he passes a sort of new Democrat agenda, or does he take a more confrontational approach, does he try to out Tom Dashl as a liberal obstructionist, and take his agenda over the heads of Congress to the public? We're going to have to leave it there. Rich Lowry, Mike Shields, thank you both. Thank you, thank you. Now, a conversation with Defense Secretary Donald Rumsfeld. I talked with him late yesterday. Mr. Secretary, welcome. Thank you very much. How are you coming on your review of military strategy and needs? Well, it's complicated. It is interesting. You don't stop doing what you're doing, unless you have something that's a lot better. And we are testing various models or alternatives against the so-called two major regional conflict idea,

which we've had for about 10 years in our country as a way of sizing our force, organizing our force, equipping our force. So we're working hard on it. We're talking to an awful lot of people, and I don't know whether there will be a change in strategy. They may or they may not, but there certainly won't be. Without a great deal of discussion and thought and care and attention, but didn't you go into this with the idea that something needed to be changed, something very important and large needed to be changed? The, I guess the answer is, is anyone who looks at the last decade and sees that we were organized to fight two major regional conflicts and realized we didn't have one. But we did, in fact, have Kosovo, Bosnia, 85 other things that went on in the world, has to ask the question, how do we want to be arranged for the coming decade, decade or two? And it may very well be, and my suspicion is, that we ought to be arranged somewhat differently.

But actually finding that difference, the way it should be, is something that takes a awful lot of care and attention and discussion with all kinds of people. I noticed you told some members of Congress the other day that you needed to be prepared. The United States needed to be prepared for surprises, for the unexpected. How in the world can you be prepared for the unexpected? Well, one thing you can do is expect the unexpected. If you think about it, Dick Cheney's confirmation hearing in 1989, not once United States Senator mentioned a word about Iraq. The word Iraq was never mentioned in his entire confirmation hearing. One year later, we're at war with Iraq. Now, what does that tell you? Well, it tells you that you'd best be flexible. You'd best expect the unexpected. You ought to recognize that it's very difficult for forced planners to predict the future. And what we need to do is see if we can't get arranged in a way that we have the kind of flexibility

to deal with a spectrum of contingencies and activities, rather than getting locked into a fixed set of something that seems probable today, which may very well not be probable at all. Well, it sounds like you pretty well decided that this two wars at one time thing has gone. No, that's not correct. What I have decided is that it deserves to be tested. It deserves to be analyzed. It deserves to be talked about. Because it is so important. It is a big idea. And we need to address it as a country and in the Congress and in the Department of Defense. And that's what we're doing. I'm raising that issue up and saying, let's look at this. Let's ask ourselves, what are the real threats? We know we don't have a threat from the Soviet Union coming across the North German plane. We also know that with the proliferation of all these technologies around the world

that many more countries are going to have weapons of mass destruction, many more countries are going to have the means to deliver them. There's the risks of information and warfare. We're highly vulnerable because we're so dependent on high technology as a country. And we need to invest enough in research and development, I think, so that we can stay ahead of those threats. Now, when you started this, the expectation right or wrong was that one on one day in spring, like say, right now, there was going to be a rumsfeld plan for reorganizing the military. Is that not exactly that? Certainly, never came out of buying mouth then. Anyway, I think a lot of people assume that you come into these, the president came in with some ideas and he asked me to look, for example, at the morale in the armed forces, and the circumstance of the men and women in the armed forces, and we're doing that. And we're going to have some proposals to change the circumstance and improve that. We have to. There are the whole process depends on that we're attracting and retaining the very best people. He asked us to look at nuclear forces. And I'm doing that.

I've had my seventh or eighth meeting today. And I have another one tomorrow. We've been doing it repeatedly, where we're going through how our offensive nuclear forces are arranged. At some point, we'll have some proposals to very likely make some adjustments with respect to them. But I think the expectation that you're going to make an enormous change is not understandable. Once you say you want to look at something, it's understandable, but it doesn't necessarily follow that that will happen. We certainly think we can come up with something better. But until we do, we have to keep looking. Is the new democratic control of the United States Senate going to change anything for you? I don't know. It's been a very bipartisan committee. The Armed Services Committee in the Senate. So too, the Appropriations Committee has very been bipartisan in the subcommittee on defense. I've been working with both sides of the aisle continuously since I arrived several months ago. And we've approached our task in a non-partisan way. Well, Senator Jeffords and his announcement

of his becoming an independent, leaving the Republican Party listed missile defense as one of those issues, with which he disagreed with the president and the Republican Party. Does that send trouble signs to you? Well, I don't think so. I mean, there are people who feel strongly about missile defense on both sides. There have been for several decades. And we're hard at work looking in a variety of different ways, looking for the most cost-effective ways, the technologically most advantageous ways to be able to deploy missile defense in some point in the period ahead. His position hasn't changed. Nor has any number of other senators. I think we'll find a receptive group when we finally get to the point where we have some specific proposals by way of architecture. What do you say to those Democrats and other critics who hammer you on this idea that you have said or suggested? Well, an imperfect missile defense system

is better than no missile defense system. But okay, it may not work perfectly, but let's do one that does kind of work, sure. Well, I mean, I suppose it's like if you should be abolished audible bills because they don't work every single time we get in them? Of course not. The Wright brothers, how many times did they fail before they finally flew? We wouldn't have airplanes if we said, oh my goodness, the Wright brothers flight didn't fly. It crashed. Therefore, let's not try again. There's never been an advanced research and development project that hasn't had some mishaps in its early period. And furthermore, there's practically no system I know of that works 100% of the time. And that is to say that it does everything anyone could conceivably want all the time. But what about the psychology? Okay, it could be a potential enemy. It even could be a civilian in the United States. And well, we have this missile defense system. There's a missile coming.

I don't know if we're going to get it or not. Are they not going to get ours? Does that confuse things? Does that help things? Oh, I don't think so. I think it will. Let's say you have a take a medicine. We spend billions of dollars developing new medicines. And what do they do? Well, they work on some people, but not others. And they work 60% of the time for some people and not others. Now, is that bad? Does that mean you shouldn't have the medicine? Because it helps save lives 60% of the time. I think that if one looks at any complicated system, you'll find that it does not work perfectly 100% of the time. And maybe a 0.9 and maybe 0.7 success. That's plenty. I've been a lot of news stories about people who are upset at your style and going about this review, particularly the stories, say, among the brass at the Pentagon if you cut them out of the process. I have you. No, really haven't. It depends on which brass you're talking about, I suppose. But I mean, there's 850 adables in generals

in the United States Armed Forces. And you can't meet with all of them. They won't fit in a room. But I've had something like 60 or 70 meetings with the senior military and have met with, personally, over 44 adables in generals. And the materials have been widely circulated among the military. I think the problem is that you've got a group of people in the Congress and in the Department of Defense who care deeply about the defense department. They want it to be healthy. They want it to serve the country well. And it comes a new president who decides that he'd like to have some studies made. He doesn't have a bunch of answers. He's got questions. He wants things looked at. He wants to make sure we're arranged for the future. Well, that's unsettling for people. They say, oh, my goodness, things could change. And of course, the defense contractors don't want any change. The building is uncertain about change because you don't know how it'll affect them. Congressional districts worry about it from the standpoint of contracts and the like. So it immediately injects a little fear and concern into it.

And I understand that. The other thing is the president decided to delay sending up an O1 supplemental for fiscal year O1 and a fiscal year O2 budget amendment. And normally more money for defense. And normally the Congress has those to work on right now. They'd be chewing them up and debating them and discussing them and so forth. And they aren't there. So that creates a little unsettled feeling. Fortunately, the O1 supplemental is going up this week. You don't feel anybody's out to get you on this. Now, these stories are not a result of some kind of revolution among the admirals and the generals. No, indeed. You're very secure. You're very secure. I mean, they're awful with the fine group of people and they're what's going to happen next is that whatever results from these studies, they go into what's called the quadrennial defense review and the entire defense establishment engages those subjects and considers them and weighs them and argues them.

And then out of that will come the buildup for the fiscal year, O3 budget. And everyone will be a part of the normal process. So there will not be a rumsfeld manifesto that one day you will hand out and say, OK, guys, go do it. Of course not. It'll be pieces. We've already announced some changes with respect to space. We're going to be announcing some other changes with respect to, for example, the president's initiatives on quality of life for the men and women in the armed services. When we finally finish our nuclear review, we probably won't announce much at all because it's highly classified. The budget will be announced and everyone will look to see if there are weapons systems in there and if it helps. That's when they'll find out. It's when the budget comes out. Oh, no. It'll everything in the defense department leaks. It'll be all during the build-up of the process. Everyone in town will be writing stories about this that are wrong in this story and everyone will try to be second guessing what's going to happen. No, it's the great game in this town. Let me ask you, finally, you're a long time Republican.

And you've been in all kinds of jobs and all different levels of the Republican Party and the government of the United States. How do you feel about what Senator Jeffords did? Well, I'm disappointed that he shifted the control of the United States Senate from one party to another. Senator Warner told me today that he thinks that's the first time in history that a branch of our Congress has changed as a result of anything other than an election. And so it was a big event. On the other hand, every individual can do what they must do. And that's what we all do. We get up in the morning and we think is right. I'm sure he decided to do what he thought was right. What about the basic thrust of his decision, which is, I am too liberal in effect to be a Republican. There are a lot of Republicans who agree with it. They don't like the idea that he filed up the leadership of the Senate, but they're good riddance. Are you feel that way about that?

No, I'm a big 10 person. I kind of like to see that I think we have a wonderful system with two big political parties. I don't like, I think the umbrella's ought to be large enough for a lot of people under those two big parties. And I'm not one for minority, small, little, fractional parties that complicate things in coalition governments. I don't know him. Well, I met him, but I wish him well. I have no nothing bad to say about him at all. Mr. Secretary, thank you very much. Thank you. Finally tonight, the legal battle over the Windungon, a federal appeals court today, said a lower court was wrong to ban publication of the book, but did not yet decide a key argument of the case, whether the new book violates copyright law. Gwen Eiffel conducted our own legal argument of the case

earlier this week prior to today's ruling. Even the title of the book, The Windungon, owes a debt to Margaret Mitchell's Civil War epic, Gone with the Wind. But how much does it owe? That's the question making its way through the courts right now in a case that pits intellectual property rights against an artist's freedom of speech. First published in 1936, Gone with the Wind has never gone out of print. Perhaps better known as an Oscar-winning film starring Clark Gable and Vivian Lee, it has become part of popular American culture. The new unpublished book, with slight name changes of people in place, retells that story from a slave's point of view, and not just any slave, but Scarlett's imagined mulatto half-sister. Author Alice Randall says the book is a parody. Margaret Mitchell's estate says it is copyright infringement. With us now to explain, Martin Garvis, a partner at Frankfurt Garvis, current client and sales, represents the Mitchell estate. Here's the author of Tough Talk,

how I fought for writers, comics, bigots, and the American way. And Joe Beck, lead counsel for Houghton Mifflin. He is an attorney with Kilpatrick Stockton and a professor of intellectual property law at Emory University in Atlanta. We invited Alice Randall to join us as well, but she declined. Mr. Beck, tell us about this book. Yes, thank you, and I hope that your viewers soon will be able to read it for themselves. This is a short book, it's written in the form of a diary, and it's a parody. Now, some people think that parody has to be silly or funny, and there are parts of this book, in the testimony of some great experts, that are very funny, but the book primarily ridicules going with a wind, and that's really why they brought this lawsuit. For those of us who have a ridicule and effective satire and effective criticism, which is of course is what the Constitution allows to be done. For those of us in their viewing audience who have not read the book, what's the plot? Well, the story is about, as you said, the mulatto have sister of Scarlett Ahhera, and essentially everything is inverted.

For example, Ashley Wilkes, and gone with a wind, we know is the perfect Southern gentleman. And when done gone, he's a very different person. He is gay, he sleeps with a slave. Melanie, the perfect Southern lady, is a serial killer. Why does Ms. Randall write the book this way? She wants to show a different perspective. She wants to tell a story that has never been told, and that's the story of what it was like of African-American slaves and newly freed people. Margaret Mitchell, in her version of this story, pictured the slaves, the African-Americans essentially cartoons. They're one dimensional, and I'm sorry to have to say that they are sometimes described in terms of today, go far beyond what would be acceptable. Let me get Mr. Garfish respond. Why do you consider this book to be a ripoff? What Mr. Beck says is this story has never been told. There are many, many fine authors, there are very fine black authors and white authors, who've been writing about slavery and the horrible effects of slavery

and the consequences of slavery, without taking characters from another book. In this book, Ms. Randall takes 15 characters, plots and sequences. Our experts testify, now our experts are from Dartmouth, Brandeis, respectable Southern universities, the head of the Goulinheim Foundation, that the book is basically, and I don't mean this in the pejorative way, parasitic, that basically, if you took gone with the wind, out of the book, there's no book left. It's a case of people reacting to everybody within, gone with the wind. If you were to open a page there, would you would see, is Rhett Butler, Scarlett O'Hara, and they're the same exact people, basically, that are in gone with the wind. I think the other thing that should be mentioned is that the Constitution talks about copyright. It talks about protecting authors. It talks about giving authors the right to have sequels. One, in one's passage here, Scarlett O'Hara is described as, a vital black hair green bell of five counties.

Wasn't, she was not beautiful, but men seldom recognize it. That's from the original gone with the wind. In Alice Randall's book, the character whose name is other, who is the Scarlett character, is described as, quote, a raven hair green-eyed bell of five counties. She's not beautiful, but men seldom recognize this. It's terribly similar. And that goes to two points. That's important. I'd like you to expect to respond to it. Thank you, Martin. Yeah, there are two points. First of all, when you do something called parody, you have to bring up, it's called conjure up, the underlying work. We could not describe Scarlett O'Hara as a blind from San Francisco, and somehow suggest Scarlett O'Hara. We had to call her who she was, but that, what you just quoted, is the only example. Here's another example of what they call verbatim copying. At the end, Scarlett says, tomorrow is another day. At the end of our book, and they call this verbatim copying, she says, Sennara says, I offer this for those for whom there will be no tomorrow. Is that verbatim copying?

Of course not. What that is is parody. In one case, tomorrow is another day, I hope for the return of the old South by Margaret Mitchell. In our book, for those for whom there will be another day, is a prayer for the slaves. Well, let's let Mr. Garfish. Well, first of all, she has an absolute right to do a parody. This is not a parody. Now, it seems to me that Mr. Beck has just said, basically proves my point. There is no book without the 15 characters from going with the wind. There is no book without the sequences and the plots from going with the wind. Now, every writer has a right to control the sequel. If John Uptike has a character called Rabbit Angstrom, which he has developed over a number of novels, he has the right to control that story. But that's exactly right. As long as I can finish, it's an each hair right going with the wind, for example. There can be another go on with the wind. This time, it's the perspective of the next door next door. I'm Mr. Moore. It's the perspective of a Yankee who comes through, or the perspective of somebody else.

So if you believe Mr. Beck's theory, you could have 15 novels, all talking about the same 15 characters. Okay, Mr. Beck, we don't have a lot of time, and let me just respond quickly. Rabbit Angstrom maintains, he stays in character. That's what a sequel does. A sequel is a contract with a reader, and the next story will be like the last one. If this were a sequel, then Ashley Wilkes must have been gay, Scarlett must have been black, and Melanie must have been a serial killer. Of course, it's not a sequel. And he knows that. The Supreme Court has ruled in at least in another case, which is not necessarily related, but I'm curious about what you think the connection is, in which two-life crew was accused of plagiarizing the words to white or business pretty woman. And in fact, the Supreme Court ruled on the side of two-life crew, the last group. That's right, that's not so I think. I think you're wrong as a matter of law. What the court said was that you can take something for parity, you can only take a minimal amount. There's no objection to Miss Randall writing a book where she may have read Butler in a scene,

or she may have scarlet in a scene. Soil Bellow does that with James Joyce characters. He even has incidents from James Joyce characters. Philip Roth writes a book called The Breast, which clearly comes from Casca's metamorphosis. You have a right to refer to other people. Well, you're exactly right. This is an iconic book, and you're absolutely entitled to refer to things. The question is, how much have you taken? Mr. Garvis, would there have been any case in which the Mitchell State would have agreed to the licensing of a story told from a slaves point of view about gone with the wind? Of course. I mean, that would have to be presented to them. They have already authorized the sequel, and there's already been one sequel, and there's another sequel coming out. I think what's happened is, this is- No, they've authorized the sequel. Let me tell you, please, Mr. Bakker. The legal issues have been somewhat obscured because of the racial connotations, because Miss Randall is black, and because she's written a book about slavery, and because Miss Mitchell is allegedly a racist, and gone with the wind is allegedly a racist book.

Those aren't the issues. The issues here have to do with the North there, having control over the right to do a sequel, and having the right to the characters that she created. First of all, you're right about what the Supreme Court held in the two-life crew case. The song, Ugly Woman, was a parody of the song, Pretty Woman, same tune, very similar words. Secondly, Mr. Garvis actually just told us that they had authorized when you said a sequel from the point of view of a slave. He said, they've already authorized one. That's scarlet. If that's their idea of the point of view of a slave, I think the answer is obvious. And the answer is what I said in this day. The other sequel wave, just what I said, is that just the reality talk. I'll let you talk. Let me finish. What you said in that, and the response to her question about a sequel from the point of view of a slave is we've just authorized another one. You know who that's going to be? That's what this sequel is. Excuse me, Martin. Well, gentlemen, this is a say that, Mr. Butler, is the person that is going to be telling the next story. And if that's the story of this book in the point of view of a slave, I rest my case. Thank you, gentlemen.

We're all out of time. Thank you for joining us. This afternoon, an attorney, Martin Garbus, said the Mitchell state will appeal today's ruling that allows publication of the book, the publisher, Houghton Mifflin, said it, plans to get the book out by the end of June. And again, the major stories of this Friday, House and Senate negotiators rush to finalize a tax cut bill, Republican leaders wanted passed before the Memorial Day recess. And the Commerce Department said economic growth in the first quarter was slower than projected. We'll see you online and again here, Monday evening. Have a nice holiday weekend. I'm Jim Lara. Thank you and good night. Major funding for the new sour with Jim Lara has been provided by. Imagine a world where no child bakes for food. While some will look on that as a dream, others will look long and hard and get to work.

A.D.M., the nature of what's to come. Helping people with the state planning so that those they care about get more than a simple will can provide. Let's see how we earn it. Salomon Smith-Darn. And by the Corporation for Public Broadcasting, this program was also made possible by contributions to your PBS station from viewers like you. Thank you. MUSIC Video cassettes of the news hour with Jim Lehrer are available from PBS video call 1-800-328-PBS-1

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Video cassettes of the news hour. On the New South tonight, Kwame Holman tracks the tax cuts in-game. Margaret Warner goes over the details of the big shake-up in the Senate. Mark Shields and Rich Lowry analyze that on other pieces of the Jeffords Party switch. Defense Secretary Rumsfeld talks about reform and change in the military. And Gwen Eiffel looks at the issues of the wind-done-gone case. It all follows our summary of the news this Friday. Major funding for the news hour with Jim Lehrer has been provided by. Imagine a world where we're not diminishing resources, we're growing with ethanol, a cleaner burning fuel made from corn, and the idea for the nature of what's to come. And by the Corporation for Public Broadcasting, this program was also made possible by

contributions to your PBS station from viewers like you. Thank you. House and Senate negotiators rushed today to finalize a tax cut bill Republican leaders wanted passed before the Memorial Day recess. It would lower taxes by more than $1.3 trillion over 11 years, but there were sticking points over the top income tax rate and child tax credits. We'll have more on this story right after the news summary. Many growth in the first quarter was slower than projected. The Commerce Department said today, the gross domestic product grew at an annual rate of just 1.3 percent instead of two. Last night, Federal Reserve Chairman Almond Greenspan warned the slowdown could continue. He spoke to a group of economists in New York. The period of subpar economic growth is not yet over, and we are not free of the risk that economic weakness will be greater than currently anticipated, requiring further

policy response.