thumbnail of PBS NewsHour; May 12, 2011 7:00pm-8:00pm EDT
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>> Lehrer: PRESIDENT OBAMA MET WITH CONGRESSIONAL LEADERS TO WORK ON A DEAL TO REDUCE THE NATION'S DEFICIT. GOOD EVENING, I'M JIM LEHRER.
>> Woodruff: AND I'M JUDY WOODRUFF. ON THE "NEWSHOUR" TONIGHT, RAY SUAREZ HAS THE LATEST ON THE BATTLE LINES BEING DRAWN BY BOTH PARTIES-- FROM SPENDING CUTS TO NEW TAXES.
>> Lehrer: AND WE HAVE A NEWSMAKER INTERVIEW WITH SENATE REPUBLICAN LEADER MITCH McCONNELL.
>> Woodruff: THEN, WE EXAMINE THE CASE FOR-- AND AGAINST-- GENEROUS TAX BREAKS FOR BIG OIL COMPANIES.
>> Lehrer: SPECIAL CORRESPONDENT FRED DE SAM LAZARO REPORTS ON A PROGRAM THAT'S MAKING A DIFFERENCE FOR POOR WOMEN IN PAKISTAN.
>> IT'S NOT JUST ABOUT NUMBERS. IT'S NOT JUST HOW MANY WOMEN YOU ACCESS; IT'S NOT HOW MANY FAMILIES YOU ACCESS; IT'S HOW MANY LIVES YOU TRANSFORM.
>> Woodruff: AND JEFFREY BROWN TALKS TO DIANA HENRIQUES OF THE "NEW YORK TIMES" ABOUT HER NEW BOOK CHRONICLING BERNARD MADOFF'S MASSIVE INVESTMENT FRAUD.
>> UNLIKE THE TYPICAL PONZI SCHEME THAT TENDED TO EXPLOIT PEOPLE'S GREED, MADOFF EXPLOITED PEOPLE'S FEARS.
>> Lehrer: THAT'S ALL AHEAD ALONG WITH A PERSONAL PERSONNEL ANNOUNCEMENT BY ME ON TONIGHT'S "NEWSHOUR." MAJOR FUNDING FOR THE PBS NEWSHOUR HAS BEEN PROVIDED BY:
>> I WANT TO KNOW WHAT THE UNIVERSE...
>> LOOKS LIKE.
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>> FROM DEEP SPACE.
>> TO A MICROBE.
>> I CAN CONTRIBUTE TO THE WORLD BY PURSUING MY PASSION FOR SCIENCE.
>> IT REALLY IS THE KEY TO THE FUTURE.
>> I WANT TO DESIGN...
>> A BETTER SOLAR CE.
>> I WANT TO KNOW WHAT'S REALLY POSSIBLE.
>> I WANT TO BE THE FIRST TO CURE CANCER.
>> PEOPLE DON'T REALLY UNDERSTAND WHY THINGS WORK.
>> I WANT TO BE THAT PERSON THAT FINDS OUT WHY. ♪ ♪ MOVING OUR ECONOMY FOR 160 YEARS. BNSF, THE ENGINE THAT CONNECTS US.
>> AND BY THE BILL AND MELINDA GATES FOUNDATION. DEDICATED TO THE IDEA THAT ALL PEOPLE DESERVE THE CHANCE TO LIVE A HEALTHY PRODUCTIVE LIFE. AND WITH THE ONGOING SUPPORT OF THESE INSTITUTIONS AND FOUNDATIONS. AND... THIS PROGRAM WAS MADE POSSIBLE BY THE CORPORATION FOR PUBLIC BROADCASTING. AND BY CONTRIBUTIONS TO YOUR PBS STATION FROM VIEWERS LIKE YOU. THANK YOU.
>> Lehrer: THE PRESIDENT AND CONGRESS WORKED TODAY ON A RECIPE FOR REDUCING THE NATIONAL DEBT. THE INGREDIENTS COULD INCLUDE SPENDING, TAXES AND OIL. RAY SUAREZ BEGINS OUR COVERAGE.
>> Reporter: PRESIDENT OBAMA WAS FIRST TO BE HEARD FROM-- IN A PRE-TAPED TOWN HALL BROADCAST ON CBS. HE SUGGESTED IT MIGHT TAKE AUTOMATIC SPENDING-CUT AND TAX- INCREASE TRIGGERS TO FORCE ACTION ON CURBING THE NATIONAL DEBT.
>> I THINK WHAT WE'RE GOING TO END UP HAVING TO DO PROBABLY IS TO SET SOME TARGETS, AND SAY, YOU KNOW, THOSE TARGETS HAVE TO BE HIT IF NOT AUTOMATICALLY, SOME CUTS AND TAX INCREASES START TAKING PLACE. THAT WILL GIVE INCENTIVE FOR US TO NEGOTIATE AND FIGURE SOMETHING OUT. THIS IS GOING TO BE A TOPIC NOT JUST OVER THE NEXT COUPLE MONTHS. THIS IS GOING TO BE A VALUES QUESTION FOR THE AMERICAN PEOPLE OVER THE NEXT SEVERAL YEARS. I KNOW MY ANSWER, AND I'M GOING TO BE INTERESTED IN HAVING A VIGOROUS DEBATE WITH THE REPUBLICANS ABOUT THIS ISSUE.
>> Reporter: THE PRESIDENT HAD ALREADY TOLD SENATE DEMOCRATS ON WEDNESDAY NOT TO DRAW LINES IN THE SAND. BUT SENATE MINORITY LEADER MITCH McCONNELL DID DRAW A LINE, AFTER MEETING WITH MR. OBAMA TODAY.
>> THERE WILL BE NO TAX INCREASES IN CONNECTION WITH RAISING THE DEBT CEILING. WE'RE TALKING ABOUT SPENDING REDUCTIONS. WE KNOW WHAT THE OPTIONS ARE. THE QUESTIONS-- THE ONLY QUESTION REMAINING IS WHAT WILL WE PICK UP AND AGREE TO ON A BIPARTISAN BASIS?
>> Reporter: THE FEDERAL GOVERNMENT IS EXPECTED TO HIT THE DEBT CEILING NO LATER THAN MAY 16. IT CAPS WHAT THE GOVERNMENT MAY BORROW, RIGHT NOW THE LIMIT IS $14.3 TRILLION. TREASURY SECRETARY TIMOTHY GEITHNER SAYS HE CAN PREVENT A DEFAULT UNTIL AUGUST SECOND, BUT THE PRESSURE IS ON TO GET AN AGREEMENT SOON. MONDAY, HOUSE SPEAKER JOHN BOEHNER SAID REPUBLICANS WOULD DEMAND $2 TRILLION IN SPENDING CUTS, AS THE PRICE FOR RAISING THE DEBT CEILING. AND TODAY, LIKE SENATOR McCONNELL, HE INSISTED THAT TAX INCREASES NOT BE PART OF ANY DEAL.
>> THIS IS THE MOMENT, AND THIS IS THE OPPORTUNITY FOR AMERICA TO GET ITS FISCAL HOUSE IN ORDER. I BELIEVE THAT RAISING TAXES ON THE VERY PEOPLE THAT WE EXPECT TO REINVEST IN OUR ECONOMY AND TO HIRE PEOPLE IS THE WRONG IDEA. FOR THOSE PEOPLE TO GIVE THAT MONEY TO THE GOVERNMENT, THAT MEANS IT WON'T GET REINVESTED IN OUR ECONOMY AT A TIME WHEN WE'RE TRYING TO CREATE JOBS.
>> Reporter: AMID THE VERBAL SPARRING, VICE PRESIDENT BIDEN AND A BIPARTISAN GROUP OF HOUSE AND SENATE LAWMAKERS HELD A THIRD ROUND OF TALKS ON DEFICIT REDUCTION AND THERE WAS MORE ACTION AT THE CAPITOL. THE SPENDING FIGHT SPILLED OVER INTO A SENATE HEARING TODAY WITH TOP EXECUTIVES FROM THE FIVE LARGEST OIL COMPANIES. DEMOCRATS ON THE FINANCE COMMITTEE SAID IF REPUBLICANS ARE SERIOUS ABOUT CUTTING SPENDING, THEY WOULD SUPPORT ENDING TAX BREAKS FOR THE OIL INDUSTRY. DEMOCRATS ARGUE THAT DOING AWAY WITH THE SUBSIDIES WOULD SAVE $21 BILLION DOLLARS OVER TEN YEARS. BUT AT THE OUTSET, THE COMMITTEE'S TOP REPUBLICAN, UTAH'S ORRIN HATCH, CHARGED DEMOCRATS WERE MORE FOCUSED ON POLITICS THAN POLICY.
>> THIS HEARING SHOULD NOT BE USED TO SCORE POLITICAL POINTS, BUT I'M AFRAID-- WITH ALL DUE RESPECT MR. CHAIRMAN-- THAT THAT'S WHAT WE'RE GOING TO SEE HERE TODAY. I HAVE A CHART DEPICTING WHAT I EXPECT THIS HEARING TO TURN INTO. THERE YOU GO.
>> Reporter: NEW YORK SENATOR CHUCK SCHUMER SHOT BACK THAT HIS SIDE HAD A JUST CAUSE.
>> SOME OF MY COLLEAGUES SUGGESTED THAT THIS HEARING IS NOTHING MORE THAN A DOG AND PONY SHOW. WELL YOU'D HAVE AN EASIER TIME CONVINCING THE AMERICAN PEOPLE THAT A UNICORN JUST FLEW INTO THIS HEARING ROOM THAN THAT BIG OIL COMPANIES NEED TAXPAYER SUBSIDIES-- THAT'S THE REAL FAIRYTALE. AND I WOULD JUST SAY TO
>> Reporter: ANOTHER DEMOCRAT-- JAY ROCKEFELLER OF WEST VIRGINIA-- WARNED THE OIL EXECS IT'S TIME TO DO THEIR PART.
>> I THINK THE MAIN REASON THAT YOU'RE OUT OF TOUCH, PARTICULARLY WITH RESPECT TO AMERICANS AND THE SACRIFICES WE'RE HAVING TO LOOK AT HERE IN TERMS OF TRYING TO BALANCE OR COME CLOSE TO EVEN BALANCING A BUDGET IS THAT YOU NEVER LOSE. YOU'VE NEVER LOST. YOU ALWAYS PREVAIL.
>> Reporter: IN FACT, THE COMPANIES-- INCLUDING CHEVRON, A "NEWSHOUR" FUNDER-- RACKED UP RECORD PROFITS OF $36 BILLION IN THE FIRST QUARTER OF THIS YEAR. BUT EXXON C.E.O. REX TILLERSON INSISTED EFFORTS TO ELIMINATE TAX BREAKS ARE WRONG-HEADED.
>> IT IS NOT SIMPLY THAT THEY ARE MISINFORMED AND DISCRIMINATORY, THEY ARE COUNTERPRODUCTIVE. BY UNDERMINING U.S. COMPETITIVENESS, THEY WOULD DISCOURAGE FUTURE INVESTMENTS IN ENERGY PROJECTS IN THE UNITED STATES, AND THEREFORE UNDERCUT JOB CREATION AND ECONOMIC GROWTH. AND BECAUSE THEY WOULD HINDER INVESTMENT IN NEW ENERGY SUPPLIES THEY DO NOTHING TO REDUCE PRICES.
>> Reporter: DEMOCRATS ARE PUSHING TO HOLD A SENATE VOTE ON THEIR PROPOSAL TO STRIP THE OIL COMPANIES OF THEIR SUBSIDIES, NEXT WEEK.
>> Lehrer: AND NOW TO OUR INTERVIEW WITH THE REPUBLICAN LEADER OF THE SENATE, SENATOR MITCH McCONNELL OF KENTUCKY. HE JOINS US FROM THE CAPITOL. SENATOR WELCOME.
>> I'M GLAD TO BE WITH YOU. AND SORRY THAT YOU'RE GOING TO HANG IT UP AFTER ALL THESE MANY YEARS. IT'S BEEN A GREAT EXPRID WE ENJOYED WATCHING AND YOU AMERICAN PEOPLE ARE GOING TO MISS YOU.
>> Lehrer: THANK YOU, SENATOR. I'M STILL GOING TO BE HERE ON MANY OF THE FRIDAY NIGHTS. I'M ANYTHING TO EXPLAIN THIS AT THE END OF THE PROGRAM TONIGHT. BUT THANK YOU FOR YOUR KIND WORDS. HOW WOULD YOU DESCRIBE YOUR MEETING TODAY WITH PRESIDENT OBAMA?
>> VERY GOOD AND VERY CANDID. YOU GUYS, MEANING THE PRESS, WERE NOT IN THE ROOM WHICH, YOU KNOW, DOES CONTRIBUTE TO CANDOR, AND THE PRESIDENT, I THINK CORRECTLY, VIEWED IT AS MORE OF A LISTENING OPPORTUNITY FOR HIM. HE DOESN'T HAVE, OBVIOUSLY, AS MUCH INTERACTION WITH REPUBLICANS AS HE DOES DAERJZ WHICH IS UNDERSTANDABLE. AND SO, IT WAS AN OPPORTUNITY FOR HIM TO HEAR FROM OUR MEMBERS HOW WE SEE WHERE WE'RE HEADED. I CAN SPEAK FOR MYSELF. I BEGAN OUR DISCUSSION BY POINT POINTING OUT WHEN STANDARD & POORZ SAYS THEY'RE ABOUT TO DOWNGRADE THE U.S. CREDIT RATING THAT'S A PRETTY BIG RED FLAG. AND, ALSO, WHEN WE KNOW OUR DEBT NOW IS THE SIZE OF OUR ECONOMY, WE BEGIN TO LOOK A LOT LIKE GREECE. AND WHEN WE KNOW THAT EVEN BEYOND THAT, WE HAVE OVER $50 TRILLION IN UNFUNDED LIABILITIS-- THAT IS, PROMISES WE'VE MADE THAT WE CANNOT KEEP TO VERY POPULAR THINGS LIKE MEDICARE AND SOCIAL SECURITY AND MEDICAID, THE HEALTH PROGRAM FOR THE POOR-- HOW MUCH MORE DO WE NEED TO KNOW? AND SO NOTHING FOCUSES OUR ATTENTION ON DEBT AND DEFICIT LIKE THE PRESIDENT'S REQUEST TO RAISE THE DEBT CEILING, AND SO WHAT WE DISCUSSED IN A VERY CANDID WAY WAS HOW HE COULD ACHIEVE THE SUPPORT THAT HE NEEDS TO RAISE THE DEBT CEILING, AND WE MADE IT CLEAR THAT WE THINK THE FEDERAL GOVERNMENT HAS A SPENDING PROBLEM. WE DON'T HAVE THIS PROBLEM BECAUSE WE TAX TOO LITTLE. WE HAVE IT BECAUSE WE SPEND TOO MUCH. AND WE NEED TO ATTACK THIS, BOTH SHORT TERM, MEDIUM TERM, AND LONG TERM WITH A COMPREHENSIVE EFFORT TO BEGIN TO SIGNIFICANTLY REDUCE SPENDING, ONE THAT GUARANTEES THAT OUR CREDIT RATING DOESN'T GO DOWN, ONE THAT CONVINCES FOREIGN COUNTRIES THAT WE ARE-- THE ADULTS ARE IN CHARGE HERE AND AMERICA IS NOT GOING THE WAY OF SOME WESTERN EUROPEAN COUNTRIES. AND I THINK SUCH AN AGREEMENT ON A BIPARTISAN BASIS AND OBVIOUSLY THAT'S WHEN IT WOULD HAVE TO BE WHEN YOU HAVE A REPUBLICAN HOUSE OF REPRESENTATIVESES AND A DEMOCRATIC PRESIDENT-- WOULD ALSO ASTONISH AND PLEASE THE AMERICAN PEOPLE, EVEN IF THEY DIDN'T LIKE THE DETAILS OF WHAT WE HAD TO DO TO GET OUR HOUSE IN ORDER.
>> Lehrer: WHEN YOU SAY, "BIPARTISAN" AND YOU JUST POINTED OUT, SENATOR, THAT YOU HAVE A DEMOCRAT CONTROLLED SENATE AND A DEMOCRAT PRESIDENT AND REPUBLICAN CONTROLLED HOUSE, IS IT CORRECT THAT YOU TOLD THE PRESIDENT NO TAX INCREASES UNDER ANY SNAERKZ.
>> HE KNOWS THAT. I MEAN, THAT WAS REALLY DECIDED LAST NOVEMBER. HE UNDERSTANDS THAT THE REPUBLICAN HOUSE IS NOT GOING TO VOTE TO RAISE TAXES. SO THIS IS GOING TO BE ABOUT SPENDING REDUCTION, AND I'M OPTIMISTIC THAT WE CAN-- WE CAN COME TOGETHER AND REDUCE GOVERNMENT SPENDING. THAT IS THE REASON FOR THE PROBLEM.
>> Lehrer: BUT--
>> AND I'M PRETTY OPTIMISTIC-- JIM, LET ME JUST SAY ONE OTHER THING.
>> Lehrer: SURE.
>> I KNOW AMERICANS SOMETIMES THINK WHEN YOU HAVE DIVIDED GOVERNMENT NOTHING GETS DONE. THE FACT OF THE MATTER IS, DIVIDED GOVERNMENT IS SOMETIMES THE ONLY GOVERNMENT THAT CAN DO BIG, TOUGH STUFF. AND LET ME JUST CITE A COUPLE OF QUICK EXAMPLES THAT YOU WOULD CERTAINLY REMEMBER, AND MANY PEOPLE IN YOUR AUDIENCE WOULD AS WELL. RONALD REAGAN AND TIP O'NEIL FIXED SOCIAL SECURITY FOR A GENERATION IN 1983. RONALD REAGAN AND TIP O'NEIL DID MASSIVE TAX REFORM, WHICH WE NEED TO DO AGAIN IN 1986. BILL CLINTON AND THE REPUBLICAN CONGRESS DID WELFARE REFORM IN '96. AND BILL CLINTON AND THE REPUBLICAN CONGRESS ACTUALLY BALANCED THE BUDGETS IN THE LATE 90s. SO DIVIDED GOVERNMENT, ONE COULD ARGUE, IS MOST TIMES THE ONLY KIND OF GOVERNMENT THAT CAN DO REALLY DIFFICULT THINGS.
>> Lehrer: BUT IN EVERY ONE OF THOSE CASES, YOU JUST NAMED, SENATOR, I WENT THROUGH THOSE, AND EVERY ONE OF THOSE CASES A COMPROMISE INVOLVED BOTH SPENDING CUTS AND INCREASES IN TAXES. BUT YOU'RE SAYING THAT THAT'S NOT THE CASE-- THAT YOU WILL NOT THAT THE REPUBLICANS WILL NOT ACCEPT AS A "COMPROMISE" ANYTHING THAT INVOLVES WHAT THE DEMOCRATS WANT, PARTICULARLY THE PRESIDENT, WHICH IS RAISING TAXES FOR PEOPLE WHO MAKE OVER $250,000 A YEAR.
>> WELL, I DON'T WANT TO GET INTO AN ARGUMENT WITH YOU.
>> Lehrer: SURE.
>> I DON'T BELIEVE THE REPUBLICAN CONGRESS IN THE LATE 90s RAISED TAXES TO BALANCE THE BUDGET. I'M PRETTY SURE WE DIDN'T DO THAT.
>> Lehrer: THERE WERE SOME--
>> WITHOUT REHASHING THAT.
>> SURE.
>> I THINK THAT ISSUE WAS PRETTY WELL SETTLED LAST NOVEMBER, EVEN IF ANYBODY ON MY SIDE WERE TO ADVOCATE A TAX INCREASE, IT'S NOT GOING TO HAPPEN. IT WON'T PASS THE HOUSE. AND I THINK THE PRESIDENT UNDERSTANDS THAT. WE'VE GOT A SERIOUS SPENDING PROBLEM HERE. HE'S INDICATED HIS OPENNESS TO REDUCING SPENDING. WE NEED TO DO IT BOTH ON THE DISCRETIONARY BUDGET-- THAT IS, THE BUDGET WE ACTUALLY VOTE ON EVERY YEAR. AND THAT COULD HAVE-- NEEDS TO HAVE IMPACT IN THE NEXT BUDGET YEAR '12 AND THE NEXT ONE, '13-- AND WE NEED TO HAVE AN IMPACT ON ENTITLEMENTS. THEY'RE, HAVE VERY POPULAR. BUT IF WE'RE GOING TO HAVE ENTITLEMENTS FOR OUR CHILDREN AND GRANDCHILDREN WHEN THEY REACH RETIREMENT AGE WE HAVE TO CHANGE THE TRAJECTORY. RIGHT NOW IT'S ANYTHING UP. IT'S UNSUSTAINABLE. THE MEDICARE CRISIS IS NEAR AT HAND. SOCIAL SECURITY RAN A $50 BILLION DEFICIT THIS YEAR. I THINK WE ALL KNOW ALL OF THOSE FACTS, AND MOST OFs IT, CLEARLY, I THINK ALL OF IT, FRANKLY, IS ATTRIBUTABLE TO SPENDING TOO MUCH, NOT TAXING TOO LITTLE.
>> Lehrer: WHERE, THEN, WILL THE COMPROMISE COME? ARE YOU CERTAIN-- DO YOU BELIEVE BASED ON THIS MEETING AND EVERYTHING ELSE THAT YOU KNOW THAT THERE IN FACT WILL BE AN YAEMT THAT WILL-- AN AGREEMENT THAT WILL AVOID NOT HAVING THE DEBT CEILING REACHED?
>> WELL, IF WE CAN REACH AN AGREEMENT, OBVIOUSLY IT WILL BE ON A BIPARTISAN BASIS, WITH THE ONLY DEMOCRAT IN AMERICA WHO CAN CIPE A BILL INTO LAW, THE PRESIDENT OF THE UNITED STATES, IF WE CAN REACH AN AGREEMENT WITH HIM, IT WILL CERTAINLY PASS. AND THAT NMY VIEW-- AGAIN, SPEAKING FOR MYSELF IS GOING TO REQUIRE A SIGNIFICANT ENOUGH SPENDING REDUCTION TO IMPRESS THE MARKETS SO THAT THEY HAVE CONFIDENCE THAT THE AMERICAN GOVERNMENT IS GOING TO GET ITS HOUSE IN ORDER, IMPRESS FOREIGN COUNTRIES THAT THE UNITED STATES IS NOT GOING TO GO INTO FINANCIAL DECLINE, AND AS I SAID I THINK IT WOULD ALSO ASTONISH THE AMERICAN PEOPLE IF WE COULD DO SOMETHING OF THIS MAGNITUDE TOGETHER.
>> Lehrer: BUT, IS IT GOING TO BE DONE, SENATOR? I MEAN DO, YOU--
>> OH, YES, I'M OPTIMISTIC IT WILL BE DONE. WHAT THE "IT" IS I CAN'T DESCRIBE TO YOU TONIGHT. WE'RE IN THE PROCESS OF NEGOTIATING THAT AGREEMENT, BUT I BELIEVE WE WILL BE ABLE TO COME TOGETHER AND DO SOMETHING THAT WILL BE VIEWED AS A TURNING POINT TO PREVENT FURTHER AMERICAN DECLINE, WHICH IS HAPPENING. IT IS CLEARLY HAPPENING.
>> Lehrer: BUT, FOR INSTANCE, SPEAKER BOEHNER SAYS THAT HE'S NOT GOING TO SUPPORT ANYTHING THAT DOESN'T HAVE AT LEAST $2 TRILLION IN SPENDING CUTS. IS THAT YOUR POSITION AS WELL?
>> AT LEAST THAT. I MEAN, WE'RE TALKING ABOUT TRILLIONS HERE, NOT MILLIONS-- I MEAN NOT BILLIONS. WE'RE TALKING ABOUT TRILLIONS. OF COURSE. LOOK, EVERYBODY KNOWS ARE THAT WE NEED TO DO MULTIPLE TRILLIONS OF DOLLARS HERE-- MEDIUM TERM, SHORT TERM, AND LONG TERM-- TO HAVE ANY CREDIBILITY AT ALL BECAUSE THE BUDGET IS SO MASSIVE. LET ME PUT IT ANOTHER WAY, JIM. THE GOVERNMENT'S TAKING IN $2.2 TRILLION THIS YEAR. ALL THAT DOES IS COVER-UP THE ENTITLEMENTS AND INTEREST. IT DOES NOT COVER THE ENTIRE DISCRETIONARY BUDGET, WHICH MEANS DEFENSE. IT MEANS EDUCATION. IT MEANS ALL OF THE REST OF THE BUDGET WE'RE BORROWING MONEY FOR. THIS IS CLEARLY UNSUSTAINABLE AND CANNOT CONTINUE.
>> Lehrer: I WANT TO GET BACK TO THE POINT OF RAISING THE DEBT CEILING. SECRETARY OF THE TREASURY GEITHNER AND OTHERS HAVE SAID THAT IF THE DEBT CEILING ISN'T RAISED, IT LAB CATASTROPHE FOR THE AMERICAN ECONOMY AND THE AMERICAN FINANCIAL SYSTEM AND FOR THE WORLD GENERALLY.
>> YEAH.
>> Lehrer: ARE YOU SAYING THAT YOU IF YOU DON'T GET WHAT YOU WANT, YOU'RE NOT GOING TO VOTE TO RAISE THE DEBT CEILING?
>> WHAT I'M TELLING YOU IS IT WOULD BE A CATASTROPHE NOT TO USE THIS OPPORTUNITY PRESENTED BY THE PRESIDENT'S REQUEST TO RAISE THE DEBT CEILING, TO DO SOMETHING SIGNIFICANT ABOUT THE DEBT. THAT WOULD BE THE CATASTROPHE.
>> Lehrer: I UNDERSTAND--
>> THE AMERICAN PEOPLE ARE WAITING FOR US TO ACT. THIS IS THE OPPORTUNITY. IT'S AN OPPORTUNITY FOR BOTH SIDES TO COME TOGETHER AND DEAL WITH THE SUBJECT RAISED BY THE PRESIDENT'S REQUEST TO RAISE THE DEBT CEILING, WHICH IS, THE DEBT.
>> Lehrer: BUT MY QUESTION IS--
>> I UNDERSTAND WHAT YOUR QUESTION IS, BUT I BELIEVE WHAT WOULD BE CATASTROPHIC IS TO LEAVE-- TO MISS THIS OPPORTUNITY PRESENTED BY THE PRESIDENT'S REQUEST TO RAISE THE DEBT CEILING, TO DO SOMETHING GENUINELY SIGNIFICANT ABOUT THE DEBT, SOMETHING THAT IMPRESSES OF THE MARKETS, IMPRESSES FOREIGN COUNTRIES THAT THE AMERICANS ARE GOING TO GET THEIR ACT TOGETHER.
>> Lehrer: AND THAT WOULD BE A WORSE CATASTROPHE THAN NOT RAISING THE DEBT CEILING?
>> OF COURSE, OF COURSE.
>> Lehrer: NRLDZ, SO YOU THINK THAT-- IF THE CONGRESS FAILS TO PASS A LEGISLATION THAT RAISES THE DEBT CEILING, AND ALL THE CATASTROPHE-- THAT CATASTROPHE HAPPENS, THAT WOULD NOT BE AS BAD AS DOING WHAT YOU AND SPEAKER BOEHNER WANT, WHICH IS THE TRILLION DOLLARS, NO CHANGE IN TAXES, ET CETERA?
>> JIM, YOU'RE A SMART GUY, BUT I'M NOT GOING TO LET YOU ANSWER FOR ME.
>> Lehrer: OKAY.
>> MY ANSWER IS THIS-- TO FAIL TO TAKE THIS OPPORTUNITY TO DO SOMETHING REALLY DRAMATIC AND SIGNIFICANT ABOUT THE DEBT WOULD BE A CATASTROPHE. AND WE'RE NOT GOING TO DO THAT. WE ARE GOING TO DO SOMETHING SIGNIFICANT ABOUT THE DEBT, SOMETHING THAT REASSURES THE MARKETS AND OTHER COUNTRIES THAT THE AMERICANS ARE GOING TO GET THEIR FISCAL HOUSE IN ORDER NOW. NOT TOMORROW. NOT NEXT YEAR. BUT NOW.
>> Lehrer: ALL RIGHT, DO YOU-- DO YOU THINK ALL THIS WILL HAPPEN BEFORE AUGUST 2?
>> I DO, YEAH. THAT IS THE POINT-- THIS IS WHAT MAKES US ACT. YOU KNOW, WE'VE BEEN KICKING THE CAN DOWN THE ROAD FOREVER. THE TIME TO KICK THE CAN DOWN THE ROAD IS OVER UPON THE TIME TO ACT IS NOW. I THINK THE PRESIDENT SHARES THAT VIEW. ALL OF MY MEMBERS DO. WE'RE GOING TO GET THIS DONE.
>> Lehrer: SENATOR, YOU FAMOUSLY SAID IN OCTOBER 2010, I BELIEVE IT WAS, THAT-- IN FACT I EVEN HAVE THE QUOTE HERE-- THAT YOU ASKED WHAT YOU SAW AS YOUR JOB AS A REPUBLICAN LEADER OF THE SENATE. "THE SINGLE MOST"-- I KNOW YOU HEARD THIS MANY TIMES. "THE SINGLE MOST IMPORTANT THING WE WANT TO ACHIEVE IS FOR PRESIDENT OBAMA TOO BE A ONE-TERM PRESIDENT." MY QUESTION IS HOW IS THAT WORKING OUT?
>> WELL, LOOK, THAT'S-- THAT'S THE MAIN GOAL FOR 2012. THAT'S WHAT I WAS ASKED. AND WE'LL-- WE'LL-- BOTH SIDES WILL BE TRYING TO WIN THE ELECTION IN '12. THE CHALLENGE AT THE MOMENT IS WHAT ARE WE GOING TO DO BETWEEN NOW AND' 12. WE HAVE HAD AN ELECTION EVERY TWO YEARS SINCE 1778, RIGHT ON SCHEDULE, YET AT VARIOUS TIMES, EVEN THOUGH THERE WAS AN ELECTION COME CATEGORY UP, WE DID WHAT WAS NECESSARY TO SAVE THE COUNTRY. THAT'S WHAT WE'RE ABOUT RIGHT NOW. HE'S THE PRESIDENT. HE GOT A FOUR-YEAR TERM. WE'RE GOING TO WORK WITH HIM TO GET THIS BIG JOB DONE THIS YEAR.
>> Lehrer: DO YOU THINK IT'S UNFAIR TO KEEP USING THIS QUOTE ALL THE TIME?
>> I'D BE HAPPY TO SAY IT AGAIN FUNDAMENTALLED TO. I DON'T THINK IT'S PARTICULARLY SHOCKING THAT THE REPUBLICAN LEADER OF THE SENATE WOULD LIKE A REPUBLICAN PRESIDENT. I WAS ALWAYS A LITTLE BIT ASTOUNDED THAT PEOPLE THOUGHT THAT WAS EVEN WORTHY OF OBSERVATION ON THE PART OF REPORTERS.
>> Lehrer: HAVE YOU TAKEN THE OPPORTUNITY, OR HAVE-- THE OPPORTUNITY FROM THE CIA TO SEE THE DEATH PHOTOGRAPHS OF OSAMA BIN LADEN?
>> YEAH, I DON'T THINK WE OUGHT TO BE DISCUSSING THESE KIND OF CONFIDENTIAL MATTERS, AND I DON'T INTEND TO DISCUSS THEM TONIGHT.
>> Lehrer: IN OTHER WORDS, YOU'VE SEEN THE PICTURES OR YOU HAVE NOT SEEN THE PICTURES?
>> IN OTHER WORDS, I DON'T INTEND TO COMMENT ON WHAT I MAY OR MAY NOT HAVE SEEN. I COMMEND THE PRESIDENT FOR MAKING THE DECISION TO EXECUTE THE RAID, AND THE SOLDIERS THAT IT'S MILITARY PERSONNEL WHO CARRIED IT OUT. IT WAS AN ASTONISHING SUCCESS. BUT I THINK, FRANKLY, WE'VE SAID QUITE ENOUGH ABOUT WHAT WE MAY OR MAY NOT HAVE LEARNED IN THESE INTELLIGENCE BRIEFINGS OVER THE LAST FEW MONTHS. I THINK, FRANKLY, MORE HAS BEEN SAID THAN SHOULD BE SAID.
>> Lehrer: I HEAR YOU, ALL RIGHT. SENATE, THANK YOU VERY MUCH.
>> THANK YOU.
>> Woodruff: STILL TO COME ON THE "NEWSHOUR": GIVING TAX BREAKS TO OIL COMPANIES; COMBATING POVERTY IN PAKISTAN; DISSECTING THE MADOFF SCANDAL. PLUS, A PERSONAL NOTE FROM JIM. BUT FIRST, THE OTHER NEWS OF THE DAY. HERE'S HARI SREENIVASAN.
>> Sreenivasan: THOUSANDS OF PEOPLE ALONG THE MISSISSIPPI RIVER SPENT ANOTHER DAY TRYING TO HOLD BACK THE WATER OR TRYING TO GET OUT OF THE WAY. AND, PRESIDENT OBAMA SIGNED A DISASTER DECLARATION FOR 14 MORE COUNTIES IN MISSISSIPPI. THE RIVER KEPT GROWING TODAY WITH MORE AND MORE HOMES IN SMALL TOWNS IN ARKANSAS, MISSISSIPPI AND LOUISIANA BEING SWALLOWED BY THE FLOODWATERS. AND, THOUSANDS MORE IN JEOPARDY. PEOPLE IN BUTTE LAROSE, LOUISIANA WERE TOLD TO EVACUATE BEFORE THE ARMY CORPS OF ENGINEERS DECIDES WHETHER TO OPEN A MAJOR SPILLWAY AND RELIEVE PRESSURE ON THE RIVER BEFORE IT REACHES THE CITY OF BATON ROUGE, FURTHER DOWNSTREAM.
>> WE'RE GIVING YOU TIME TO DO THAT, KNOWING THAT THE MORGANZA SPILLWAY IS GOING TO BE OPENED YOU HAVE TIME TO DO THAT NOW.
>> Sreenivasan: OPENING THE SPILLWAY MEANS HOMES AND FARMS MIGHT BE LOST TO THE RIVER, NEWS THAT'S HARD TO HEAR.
>> IT'S JUST THE UNKNOWN. IT'S EVERYTHING. YOU KNOW, WE FINALLY WORK HARD FOR OUR STUFF. IT'S JUST HARD.
>> Sreenivasan: THERE WERE ALSO RENEWED CONCERNS THAT FLOODING COULD IMPACT OIL REFINERIES ALONG THE LOWER MISSISSIPPI.
>> WE HAVE MANY CUSTOMERS THAT ARE SOLE SOURCE AND DEPEND ON OUR OIL. IT WOULD HAVE AN EFFECT DOWNSTREAM IF THESE MANUFACTURING FACILITIES, IF THEY WERE TO LOSE, IF WE WERE TO SHUT DOWN AND NOT BE ABLE TO SUPPLY THEM WITH PRODUCT.
>> Sreenivasan: THE MISSISSIPPI IS FLOWING SO SWIFTLY THAT BY MONDAY THE COAST GUARD COULD CLOSE IT TO SHIP TRAFFIC ALL THE WAY FROM BATON ROUGE, LOUISIANA TO THE GULF OF MEXICO. IN THE MEANTIME, THE FLOODING ALSO FORCED WILDLIFE POPULATIONS TO MOVE.
>> NORMALLY, YOU DON'T SEE THIS MANY DEER AND TURKEYS IN THIS AREA. NORMALLY, YOU HAVE TO LOOK IN THE TREELINES TO LOOK FOR THEM AND NOW HERE ON THIS LEVEE THEY'RE VERY EASY TO RUN ACROSS.
>> Sreenivasan: WHILE ANIMALS FLED, PEOPLE KEPT SANDBAGGING, HOPING TO HOLD BACK THE FLOOD TIDE IN THE DAYS AHEAD. IN ECONOMIC NEWS, THE RECOVERY STRUGGLED TO GAIN MOMENTUM IN APRIL. RETAIL SALES WERE UP AGAIN, BUT BY THE SMALLEST AMOUNT IN NINE MONTHS. AND FIRST-TIME CLAIMS FOR UNEMPLOYMENT BENEFITS WERE DOWN, BUT REMAINED AT RELATIVELY HIGH LEVELS. ON WALL STREET, STOCKS CLOSED HIGHER TODAY. THE DOW JONES INDUSTRIAL AVERAGE GAINED NEARLY 66 POINTS TO CLOSE AT 12,696. AND THE NASDAQ WAS UP 18 POINTS TO CLOSE AT 2,863. F.B.I. DIRECTOR ROBERT MUELLER MAY BE STAYING ON THE JOB FOR TWO MORE YEARS. HIS TERM EXPIRES IN SEPTEMBER, BUT PRESIDENT OBAMA ASKED CONGRESS TODAY TO GRANT AN EXTENSION. IN A STATEMENT, THE PRESIDENT SAID IT IS CRITICAL TO HAVE CONTINUITY AND STABILITY AT THE F.B.I. RIGHT NOW. MUELLER WENT TO WORK JUST A WEEK BEFORE THE 9/11 ATTACKS. TWO MORE PROTESTERS WERE SHOT DEAD IN YEMEN TODAY AND 47 WERE WOUNDED. SECURITY FORCES IN THE CITY OF TAIZ SPRAYED CROWDS WITH MACHINE GUN FIRE FROM MILITARY VEHICLES. THE DEATHS CAME A DAY AFTER 13 PROTESTERS WERE KILLED AND THEY RAISED CONCERNS OF A BROADER CONFLICT. IN LIBYA, A FRESH ROUND OF NATO AIR STRIKES ROCKED MOAMMAR QADDAFI'S COMPOUND IN TRIPOLI. THE BARRAGE HIT HOURS AFTER THE LIBYAN LEADER APPEARED ON STATE TELEVISION, FOR THE FIRST TIME IN NEARLY TWO WEEKS. LATER, LIBYAN OFFICIALS SHOWED THE DESTRUCTION TO REPORTERS. THEY SAID QADDAFI AND HIS FAMILY HAD MOVED AWAY FROM THE FORTIFIED COMPLEX SOME TIME AGO. MEANWHILE, REBELS SAID THEY WERE ADVANCING WEST FROM MISRATA, AFTER BREAKING A LONG SIEGE BY GOVERNMENT TROOPS AND TANKS.
>> MISRATA IS NOW COMPLETELY LIBERATED FROM QADDAFI AND HIS FORCES. THE AIRPORT IN MISRATA WAS THE LAUNCHING ZONE FOR QADDAFI'S FORCES AND PRAISE BE TO GOD IT IS NOW UNDER THE CONTROL OF OUR REVOLUTIONARY FORCES. THE REST OF THE AREA EAST AND WEST OF MISRATA ARE NOW COMPLETELY VOID OF ANY QADDAFI LOYALISTS TROOPS FOR AN AREA APPROXIMATELY 25 MILES AWAY FROM MISRATA.
>> Sreenivasan: IN ANOTHER DEVELOPMENT, LIBYAN OPPOSITION LEADERS PLANNED TO MEET WITH U.S. OFFICIALS IN WASHINGTON TOMORROW. THERE WERE NO PLANS FOR PRESIDENT OBAMA TO JOIN THE MEETINGS. A GERMAN COURT CONVICTED JOHN DEMJANJUK TODAY, OF AIDING IN THE MURDER OF 28,000 PEOPLE, AS ATI NMPH DERD GCA.UA DEMJANJUK IS A RETIRED AUTO WORKER FROM DETROIT, BUT HE WAS BORN IN UKRAINE. GERMAN PROSECUTORS CHARGED HE WORKED AS A LOW-RANKING GUARD AT THE SOBIBOR CAMP IN POLAND IN 1943, DURING WORLD WAR TWO. TODAY, THE 91-YEAR-OLD DEFENDANT SAT IN A WHEELCHAIR, AS THE VERDICT WAS READ. HE SHOWED NO REACTION, BUT RELATIVES OF DEATH CAMP VICTIMS WELCOMED THE VERDICT.
>> HE WAS PART OF THE KILLING MACHINE AND HE IS AN ACCESSORY TO MURDER, THERE IS ABSOLUTELY NO DOUBT ABOUT THE EVIDENCE AND THE RELATIVES OF THE NAZI VICTIMS, THEY THINK IT IS ABSOLUTELY NECESSARY THAT EVERYBODY WHO PARTICIPATED IN MURDERING THEIR FAMILY HAS TO FACE THIS RESPONSIBILITY TO THE END OF HIS LIFE.
>> Sreenivasan: IN THE 1980s, AN ISRAELI COURT CONVICTED DEMJANJUK OF BEING A NOTORIOUS GUARD AT A DIFFERENT DEATH CAMP. BUT IT TURNED OUT HE HAD BEEN MIS-IDENTIFIED, AND THE CONVICTION WAS OVERTURNED. TODAY'S CONVICTION CARRIED A FIVE YEAR PRISON SENTENCE, BUT DEMJANJUK REMAINS FREE, PENDING APPEAL. FORMER U.S. SENATOR JOHN ENSIGN NOW FACES A JUSTICE DEPARTMENT INVESTIGATION. THE SENATE ETHICS COMMITTEE MADE THE REFERRAL TODAY, NINE DAYS AFTER ENSIGN RESIGNED HIS SEAT. THE COMMITTEE CHARGED THE REPUBLICAN OBSTRUCTED ITS INVESTIGATION, AND MADE FALSE STATEMENTS TO THE FEDERAL ELECTIONS COMMISSION. THE PROBE STEMS FROM ENSIGN'S AFFAIR WITH THE WIFE OF A TOP AIDE AND PAYMENTS TO HER FAMILY. THE OBAMA ADMINISTRATION LAID OUT A PLAN TO BEEF UP U.S. CYBERSECURITY EFFORTS. IT CALLED FOR A NEW LAW THAT WOULD MANDATE BETTER PROTECTION FOR THE ELECTRICAL GRID, NUCLEAR POWER PLANTS AND FINANCIAL SYSTEMS. JUST LAST MONTH, AUTHORITIES EXPOSED A HACKING RING THAT BROKE INTO MORE THAN TWO MILLION COMPUTERS WORLDWIDE STEALING MORE THAN $100 MILLION. THOSE ARE SOME OF THE DAY'S MAJOR STORIES. NOW, BACK TO JUDY.
>> Woodruff: THE LATEST EFFORT BY CONGRESS TO TARGET THE OIL INDUSTRY OVER TAXES AND PROFITS IS HARDLY THE FIRST. BUT AS WE HEARD EARLIER, THIS TIME THE LEGISLATION IS TIED DIRECTLY TO THE DEBATE OVER DEBT AND DEFICITS. IT WOULD LIMIT TAX BREAKS FOR OIL PRODUCTION AND MODIFY OTHER RULES THAT COMPANIES USE TO LOWER THEIR TAX BILLS. ALL TOLD, IT WOULD BRING $21 BILLION IN NEW REVENUE TO THE GOVERNMENT. WE LOOK NOW AT WHETHER IT'S TIME TO CHANGE THOSE TAX LAWS. FOR THAT, WE TURN TO TYSON SLOCUM, THE DIRECTOR OF THE ENERGY PROGRAM AT PUBLIC CITIZEN, A NATIONAL CONSUMER INTEREST GROUP. AND BRIAN JOHNSON, A SENIOR ADVISER ON TAX POLICY FOR THE AMERICAN PETROLEUM INSTITUTE, WHICH REPRESENTS THE OIL AND GAS INDUSTRY. GENTLEMEN, THANK YOU BOTH FOR BEING WITH US.
>> THANK YOU. GOOD TO BE HERE.
>> Woodruff: TYSON SLOCUM, I'M GOING TO START WITH YOU. WHAT DO YOU HAVE AGAINST THESE TAX BREAKS FOR THE INDUSTRY AND IN PARTICULAR, JUST AS AN EXAMPLE, THEY GET A BREAK FOR DRILLING COSTS. WHY SHOULDN'T THEY HAVE THAT KIND OF A BREAK?
>> WELL, BECAUSE AVERAGE AMERICANS ARE BEING ASKED TO BELT TIGHTEN, WE'RE CUTTING PROGRAMS FOR HIGHER EDUCATION ASSISTANCE, AND SO IF WE'RE ASKING AVERAGE AMERICANS TO BELT TIGHTEN, I THINK THAT WE OUGHT TO TARGET THE MOST PROFITABLE INDUSTRY IN THE U.S. ECONOMY. THE FACT IS THE OIL INDUSTRY'S PRIMARY SIGNALS FOR INVESTMENT IN EXPLORATION AND PRODUCTION IS THE MARKET PRICE OF CRUDE OIL, WHICH IS STUBBORNLY OVER $100 A BARREL. THAT IS PROVIDING AMPLE INCENTIVE FOR THE INDUSTRY TO DO WHAT IT DOES BEST WHICH IS EXTRACT OIL THAT WE NEED OUR ECONOMY. WE USE 20 MILLION BARRELS OF OIL EVERY DAY. WE DO NOT NEED, AS TAXPAYERS, TO PROVIDE SUBSIDIES, WHETHER IN THE FORM OF TAX BREAKS OR ROYALTY RELIEF, THAT TOTAL BETWEEN $8 BILLION AND $10 BILLION A YEAR TO THIS VERY PROFITABLE INDUSTRY. I THINK IT'S TIME THAT THE INDUSTRY ACKNOWLEDGE THAT THEY DON'T NEED THESE TAX BREAKS LIKE THEY DID BACK IN 2005, WHEN THEY SAID THAT THEY DIDN'T NEED THESE TAX BREAKS TO DO THEIR BUSINESS.
>> Woodruff: BRIAN JOHNSON, YOU'RE FAMILIAR WITH THE ARGUMENT, THAT THE INDUSTRY IS ADDICT SO WELL, THAT IT DOESN'T NEED THESE ADDITIONAL INCENTIVES TO CONTINUE DOING ITS JOB, DOING WHAT IT DOES.
>> I WOULD ACTUALLY AGREE WITH MY GOOD FRIEND TYSON. WE BELIEVE TAXPAYERS SHOULD NOT BE SUBSIDIZING ANY FORM OF ENERGY. CURRENTLY, AMERICAN OIL AND GAS COMPANIES DO NOT RECEIVE TAXPAYER SUBSIDIES, CONTRARY TO POPULAR BELIEF. THERE'S NOT ONE CREDIT IN THE TAX CODE FOR US. UNCLE SAM ISN'T TAKING MONEY OUT OF YOUR POCKET AND GIVING IT TO ANY COMPANY. WE BENEFIT FROM DEDUCTIONS AND COST RECOVERY, JUST LIKE ANY OTHER INDUSTRY. AND WE REALLY WANT EQUITABLE TREATMENT. IF IT'S AVAILABLE FOR OTHERS, IT SHOULD BE AVAILABLE TO US AS WELL.
>> Woodruff: SO WHO ARE YOU SAYING IT IS AVAILABLE TO THAT IS EQUIVALENT TO WHAT THE OIL INDUSTRY GETS?
>> RIGHT, WELL, SECTION 199, FOR EXAMPLE, IS THE JOBS PROVISION TO CREATE JOBS. IT'S AVAILABLE TO STARFWURKZ GRINDING IMPORTED COFFEE IN THE U.S. ASK THE "NEW YORK TIMES" FOR PRINTING PAPERS. TO SINGLE OUT OUR INDUSTRY AND USE THE TAX CODE IN A VINDICTIVE MANNER SENDS A SIGNAL.
>> Woodruff: TYSON SLOCUM, WHAT ABOUT THIS ARGUMENT, THIS INDUSTRY, THE OIL AND GAS INDUSTRY, IS SIMPLY GETTING TAX BREAKS THAT EVERY OTHER CORPORATION IN A SIMILAR SITUATION GETS?
>> ABSOLUTELY NOT. THESE ARE SPECIAL TAX BREAKS THAT ARE UNIQUE TO THE INDUSTRY, AND THIS ISN'T ABOUT BEING VINDICTIVE. THIS IS ABOUT FAIRNESS. WE'VE GOT AMERICANS PAYING $4 OR MORE FOR A GALLON OF GAS. ECONOMISTS ARE WARNING THAT THESE SUSTAINED HIGH PRICES THREATEP THE VERY FRAGILE ECONOMIC RECOVERY. AND CONSUMERS ARE BEING HIT TWICE-- ONCE THROUGH THESE HIGH ENERGY PRICES AND A SECOND TIME THROUGH REDUCED FEDERAL REVENUES BECAUSE OF THESE TAX BREAKS. THE FACT IS THAT THE OIL INDUSTRY IS ENJOYING WINDFALL PROFIT. OVER THE LAST FEW YEARS, SINCE 2005, NOT ONLY HAVE THEY HAD MORE THAN $500 BILLION IN PROFIT THE LARGEST FIVE COMPANIES, BUT THEY HAVE SPENT NEARLY HALF A TRILLION DOLLARS BUYING BACK THEIR STOCK AND PAYING OUT CASH DIVIDENDS TO THEIR SHAREHOLDERS. THAT'S GREAT IF YOU'RE A SHAREHOLDER OF THESE COMPANIES. BUT THE FACT IS, IT'S A MASSIVE MISALLOCATION OF CAPITAL. IMAGINE IF WE SPENT HALF A TRILLION DOLLARS IN SOLAR PANELS ON THE ROOFS OF HOMES OR DEPLOYING ELECTRIC KEERZ IPVESTING IN MAZ TRANSIT? THE FACT IS WE NEED TO INCREASE TAXES ON THESE OIL COMPANIES TO CAPTURE THEIR HUGE AMOUNTS OF REVENUE SO WE CAN INVEST IN THE THINGS WE NEED TO GET OFF OF OUR HARMFUL ADDICTION TO OIL SGLOID SGLOOUD LET ME TRY TO GET TO HIS MAIN POINT THAT THE COMPANIES ARE AWASH-- IF YOU ACCEPT THOSE FIGURES, IN PROFITS.
>> YEAH.
>> Woodruff: AND THEREFORE HOW, WHY THEN DO YOU DESERVE THESE ADDITIONAL FAVORS, I THINK HE'S SAYING, OR SUGGESTING FROM THE GOVERNMENT.
>> THAT WAS A LOT THERE. OUR PROFITS ARE HIGH. WE SELL A LOT OF PRODUCT. IF YOU LOOK AT OUR EARNINGS, WE ONLY EARN 5.6 CENTS FOR EVERY DOLLAR SOLD. WHAT DO WE DO WITH THE PROFITS? WE DO SILLY THINGS LIKE INVEST IN PENSIONS, STATE PENSIONS, AS A MATTER OF FACT, WHICH WE ALL KNOW STATES ARE SEEKING BAILOUTS LEFT AND RIGHT FROM THE FEDERAL GOVERNMENT TO PROP UP THYSELF STATE PENSIONS. OUR ASSETS IN STATE PENSION PLANS FEDERAL ON AVERAGE 46% RATE OF RETURN COMPARED TO AN AVERAGE 13% FOR OTHERS. HE ALSO MENTIONED STOCKS. ONLY 1.5% OF THE STOCKS OF OUR COMPANY ARE OWNED BY CORPORATE MANAGEMENT. THE REST ARE OWNED BY YOU, MR. SLOCUM, WHO I'M SURE HAS A RETIREMENT PLAN, 401(K), IRA. THE AMERICAN INVESTOR, THE TEACH ETHE FIREFIGHTER-- AND THEY'RE NOT GOING TO DO ANYTHING TO LOWER THE PRICE AT THE PUMP.
>> Woodruff: BRIAN JOHNSON WHAT WOULD HAPPEN IF THESE TAX INCENTIVES, BREAKS-- WHATEVER YOU WANT TO CALL THEM-- WERE TAKEN AWAY FROM THE STRAY. THE ARGUMENT IS MADE ON THE OTHER SIDE THAT IT WOULD LEAD TO LOWER FUEL PRICES, PRESUMABLY?
>> IF YOU RAISE TAXES ON THIS ONE INDUSTRY, YOU'RE NOT ONLY GOING TO COST JOBS, YOU'RE GOING TO COST PRODUCTION. TWO OF THE TAX DEDUCTIONS, IF YOU TAKE THEM AWAY YOU'RE LOOKING AT 58,000 JOBS IN ONE YEAR. YOU KNOW, WE'RE AN INDUSTRY THAT PAYS $87 MILLION A DAY TO THE FEDERAL GOVERNMENT. THAT'S ABOUT 37 BILLION A YEAR IN RENTSS, ROYALTIES, AND LEASE PAYMENTS. IF YOU WANT TO TALK ABOUT CONTROLLING THE DEFICIT, IF YOU INCREASE ACCESS BETWEEN NOW AND 2025, WE'D BE ABLE TO GIVE THE FEDERAL TREASURY $149 BILLION. SO WE ARE PAYING OUR FAIR SHARE, AND WE'RE WILLING TO DO OUR PART.
>> Woodruff: SO TYSON SLOCUM, LOST PRODUCTION AND LESS REF ARE NEW IS THE ARGUMENT WE'RE HEARING FOR THE GOVERNMENT RATHER THAN MORE.
>> NO, THAT'S FALSE. THE FACT IS THAT THE PRIMARY INDICATOR OF WHERE OIL COMPANIES MAKE THEIR INVESTMENTS IS WHAT THE MARKET PRICE OF CRUDE OIL. THEY ARE NOT MAKING THEIR DECISIONS BASED ON DOMESTIC TAX POLICY.
>> WE--
>> YOU TELL THAT TO A WORKER WHO IS LAID OFF.
>> YOU GUYS ARE NOT GOING TO BE LAYING OFF WORKERS BECAUSE WE INCREASE TAX RATES BY A COUPLE OF BILLION DOLLARS FOR THE ENTIRE INDUSTRY. YOU GUYS, THE AVERAGE COST TO EXTRACT A BARREL OF OIL IS AROUND $20. YOU'RE SELLING IT BACK TO THE AMERICAN PEOPLE FOR OVER 100. THAT IS A HUGE PROFIT MARGIN, AND THERE'S A RESPONSIBILITY THERE TO GIVE SOMETHING BACK, ESPECIALLY BECAUSE THE OIL INDUSTRY IS NOT MAKING THE INVESTMENTS THAT WE NEED TO GET OFF THE OUR ADDICTION TO OIL THE NATIONAL--.
>> Woodruff: WHAT ABOUT THAT?
>> WE'VE INVESTED $1.7 TRILLION SINCE 2000 IN ALTERNATIVE ENERGY AND NEW TECHNOLOGIES BETWEEN 2000 AND 2008 WE'VE INVESTED 58 BILLION IN ZERO CARBON TECHNOLOGIES. WE'RE INVESTING MORE IN THE PRIVATE SECTOR THAN THE GOVERNMENT PROVIDED -- I'M SORRY COMBINED. WE ARE DOING OUR PART, AND I THINK AS YOU HEARD TODAY, THE C.E.O.s SAY, THEY ARE INVESTING IN NEW FORMS OF ENERGY. WE UNDERSTAND THAT. WE DON'T THINK ANY FORM OF ENERGY SHOULD BE SUBSIDIZED BY THE TAXPAYER. WE CERTAINLY AREN'T RECEIVING CREDITS, AND WE THINK IT SHOULD BE A LEVEL PLAYING FIELD.
>> Woodruff: ALL RIGHT, GENTLENTLEM WE ARE GOI TO HAVE TO LEAVIT THERE. CLEAR DIFFERENCES BETWEEN THE TWO OF YOU, BRIAN JOHNSON, THE AMERICAN PETROLEUM INSTITUTE, TYSON SLOCUM, PUBLIC CITIZEN. THANK YOU BOTH.
>> THANK YOU.
>> THANK YOU. UPON
>> Lehrer: NEXT, POVERTY IN ISKPATAN. SPECIAL CORRESPONDENT FRED DE SAM LAZARO REPORTS ON A PROGRAM FOCUSING ON WOMEN.
>> OVER THE PAST TEN YEARS, A LOT OF CHANGES HAVE HAPPENED IN THIS NEIGHBORHOOD.
>> Reporter: ROSHANEH ZAFAR IS AN INVESTMENT BANKER WITH A MISSION: TRYING TO STAMP OUT POVERTY IN NEIGHBORHOODS LIKE THIS ONE, IN HER HOMETOWN OF LAHORE, PAKISTAN. EDUCATED IN THE UNITED STATES, ZAFAR HAS MADE AN ESTIMATED ONE MILLION LOANS TO SOME OF THE POOREST PEOPLE HERE.
>> YOU MAY NOT SEE THE SAME POVERTY THAT WE SAW OVER A DECADE AGO. SO AFTER 10 YEARS, YOU BEGIN TO SEE CHANGES IN THE FAMILY AND THEIR LIFESTYLE.
>> Reporter: HER BUSINESS IN MICRO-FINANCE-- LENDING SMALL AMOUNTS OF MONEY TO START AND EXPAND BUSINESSES-- IS TOUGH TO MAKE WORK IN A COUNTRY WHERE TWO THIRDS OF THE PEOPLE LIVE ON LESS THAN $2 A DAY. AND IT'S GOTTEN EVEN TOUGHER IN RECENT YEARS. LAST SUMMER'S EPIC FLOODS MEANT AN END TO ALL LOANS IN THE AFFECTED REGIONS. THOSE WHO HAD LOST EVERYTHING NEEDED IMMEDIATE ASSISTANCE TO GET THEIR LIVES BACK IN ORDER RATHER THAN LOANS THEY'D HAVE TO REPAY AND THERE'S THE ONGOING THREAT OF TERRORISM. SHE SAYS ITS BOTH AN ON-GOING THREAT AND AN URGENT REASON FOR HER WORK. WHAT'S THE CONNECTION BETWEEN THESE COMMUNITIES AND TERRORISM IN THE WORK THAT YOU'RE DOING?
>> I THINK ECONOMIC DEVELOPMENT IS ONE OF THE TOOLS THAT CAN HELP US CONTROL THE ISSUE OF TERRORISM BECAUSE I REALLY BELIEVE IT'S ABOUT WHEN ONE'S HOPELESSNESS SETS IN, YOU'LL START LOOKING FOR RADICAL CHANGE, OR YOU'LL START LOOKING FOR RADICAL OPTIONS. AND POOR PEOPLE AND THEIR KIDS BECOME CANNON FODDER FOR SUCH GROUPS.
>> Reporter: BUT IT'S GOTTEN HARDER TO CONVINCE PEOPLE THAT THERE'S ANYTHING TO BE HOPEFUL ABOUT, ESPECIALLY WHEN VIOLENT EVENTS MAKE IT HARD TO EARN MONEY OR TO FEEL SAFE.
>> THREE YEARS AGO, CLIENTS WERE BEGINNING TO TALK ABOUT THE FUTURE. AND THEY WERE MORE, MORE, YOU KNOW, OPTIMISTIC ABOUT THE FUTURE. NOW WE ARE SEEING, THEY'RE SAYING, "OKAY, WE WILL DO THE NEXT 24 HOURS. LET'S SEE HOW IT GOES. SO THAT'S THE MINDSET SHIFT THAT WE'VE SEEN."
>> Reporter: BUT ZAFAR AND HER GROUP ZASHF OR REVELATION WERE DETERMINED TO MAKE MICROFINANCING WORK. SO THEY CHANGED DIRECTION. RATHER THAN FOCUSING ON GROUPS, THEY STARTED CONCENTRATING ON INDIVIDUALS, SPENDING MORE TIME WITH EACH FAMILY TO GET TO KNOW THEM AND TO TEACH THEM HOW TO SUCCEED
>> IT'S NOT JUST ABOUT NUMBERS. IT'S NOT JUST HOW MANY WOMEN YOU ACCESS, IT'S NOT HOW MANY FAMILIES YOU ACCESS, IT'S HOW MANY LIVES YOU TRANSFORM.
>> Reporter: ZAFAR TARGETED WOMEN BECAUSE THEIR ROLE IN PAKISTAN'S ECONOMY HAS TRADITIONALLY BEEN HIDDEN BEHIND CLOSED DOORS.
>> THE WOMEN BUSINESSES ARE HOME-BASED BUSINESSES.
>> Reporter: SO BEHIND A LOT OF THESE STOREFRONTS ARE HOMES AND FAMILIES RUN BY WOMEN, AND THOSE ARE THE TARGETS OF YOUR... OF YOUR LOAN PROGRAM?
>> ABSOLUTELY.
>> Reporter: ACROSS PAKISTAN AND IN THE NARROW BY WAYS AND ALLEYS OF THIS ANCIENT CITY ARE SMALL FAMILY BUSINESSES, FINANCED WITH LOANS FROM KASHF. SINCE 1995, IT HAS GIVEN OUT ABOUT $200 MILLION, TO MORE THAN 300,000 WOMEN. MANY ARE REPEAT CUSTOMERS. SHE TOOK US TO VISIT RUQUIA BOOTA, WHO BORROWED $120 U.S. DOLLARS EIGHT YEARS AGO AND HAS GROWN HER EMBROIDERY BUSINESS WITH THE HELP OF TWO MORE LOANS. SHE NOW EMPLOYS HER TWO DAUGHTERS AND OCCASIONALLY UP TO TEN OTHER WOMEN FROM THE NEIGHBORHOOD.
>> ( translated ): HOW DO YOU KNOW WHAT IS SELLING AND HOW MUCH MATERIAL TO BUY?
>> ( translated ): WE GET ORDERS AND THEN BUY ACCORDINGLY, AND WE ALSO KNOW WHAT THE TRENDS ARE.
>> ( translated ): WHERE DO YOU GET YOUR MATERIALS FROM?
>> Reporter: HER QUESTIONS ARE NOT JUST POLITE CONVERSATION. KASHF'S LOAN OFFICERS ARE REQUIRED TO CLOSELY FOLLOW THEIR BORROWERS BUSINESS AFFAIRS. IT'S ALL PART OF A FINANCIAL EDUCATION THAT BEGINS BEFORE THE FIRST MONEY IS HANDED OVER.
>> ( translated ): I'M GOING TO SHOW YOU THIS CHART, IT HAS FOUR KINDS OF EXPENSES: NECESSARY, UNNECESSARY, EMERGENCY AND WISH LIST.
>> Reporter: PROSPECTIVE BORROWERS GET BASIC TIPS ON HOW TO BUDGET THEIR EXPENSES AND RANK THEIR PRIORITIES.
>> ( translated ): WHERE WOULD YOU PUT THE CELL PHONE?
>> Reporter: KASHF GETS MOST OF ITS FUNDS BY BORROWING FROM COMMERCIAL BANKS AND A DEVELOPMENT FUND BACKED BY PAKISTAN'S GOVERNMENT AND THE WORLD BANK. IT DISPERSES ITS LOANS-- TYPICALLY $150 U.S. DOLLARS EACH-- AFTER RIGOROUS VETTING. EVERY DAY, YOUNG LOAN OFFICERS, MOST OF THEM FEMALE, FAN OUT TO VISIT CLIENTS, LIKE SOBIA SAEED. SHE HAS STEADILY EXPANDED HER SALON BUSINESS, WITH THREE LOANS.
>> I'VE BEEN DOING THESE KIDS HAIR TODAY, ONE MORE LEFT TO DO.
>> ( translated ): HOW MUCH DO YOU CHARGE FOR EACH?
>> ( translated ): 30 RUPEES.
>> Reporter: THAT'S ABOUT 40 U.S. CENTS. THIS 27-YEAR-OLD ENTREPRENEUR IS DOING A LOT BETTER THAN BEFORE BUT LIKE MOST BORROWERS IS HARDLY WELL OFF. IT'S ONE REASON ZAFAR SAYS HER GROUP MAKES SURE THAT LOAN PROCEEDS ARE PUT TO THEIR INTENDED BUSINESS PURPOSE, NOT TO HOUSEHOLD OR EVEN EMERGENCY USE. THAT'S ALSO IS A CHANGE.
>> IF THE MONEY'S BEEN MIS- UTILIZED-- LETS SAY THEY SPENT HALF OF IT TO FIX THE ROOF IN THE HOUSE, THEN THE LOAN OFFICER GOES AND INFORMS THE BRANCH MANAGER AND WE TAG THAT LOAN. AND WE WILL MONITOR IT. 97% OF OUR LOANS ARE SPENT ON 98% OF THE LOANS ARE RE PAID. BUT FOR ZAFAR IT'S NOT JUST ABOUT THE MONEY. IT'S ABOUT CHANGING THE STATUS AND WELL-BEING OF WOMEN.
>> EVERY TWO TO THREE YEARS, WE DO AN IMPACT ASSESSMENT AND WE DISCOVERED THAT 40% OF MEN-- WE INTERVIEW MEN ALSO-- THEY SAID, "WE'VE STOPPED BEATING OUR WIVES BECAUSE OF THE LOANS BECAUSE MOST QUARRELS ARE OVER MONEY, LACK OF MONEY." 54% OF THEM SAID WE RESPECT OUR WIVES MORE NOW. INTER-SPOUSAL RELATIONSHIPS HAVE IMPROVED. AND OVER 80% OF MEN SAID TO US THAT WE NOW CONSULT OUR WIVES IN ALL DECISIONS. WHEN WE TALKED TO THE WOMEN,K THEY CORROBORATED THESE RESULTS.
>> Reporter: ZAFAR IS A FIERCE ADVOCATE OF MICROLENDING, BUT SHE'S LEARNED ITS LIMITS.
>> MICRO-FINANCE HAS BEEN BANDIED AS THE SOLUTION FOR POVERTY ALLEVIATION. I DON'T THINK WE'VE DONE OURSELVES JUSTICE BY FALLING INTO THAT TRAP EITHER. FINANCIAL INCLUSION DEFINITELY HELPS. BUT IT'S NOT THE ONLY THING. YOU NEED EDUCATION, YOU NEED HEALTH. AND THAT TAKES TIME. IT'S NOT GOING TO BE AS VISIBLE AS, LET'S SAY, CONSTRUCTING A DAM IS GOING TO BE.
>> Reporter: BUT SHE ALSO CAN SEE SOME LONG TERM RESULTS BEGINNING TO APPEAR. SADHIYA AIJAZ AND HER HUSBAND, MOHAMMED, WORKED FOR YEARS CUTTING METAL BY HAND INTO SHORT STRIPS TO BE BENT INTO CHAIN LINKS. LOANS BROUGHT THEM MACHINES.
>> ( translated ): WE'RE ABLE TO PRODUCE A LOT MORE NOW, THERE'S ALSO MORE MONEY. IT'S MUCH EASIER FOR US NOW.
>> Reporter: BUT MOST IMPORTANTLY, THEY CAN NOW AFFORD TO GET THEIR CHILDREN EDUCATED TO PREPARE THE NEXT GENERATION FOR A BETTER LIFE.
>> ( translated ): PREVIOUSLY, LIFE WAS VERY TOUGH BUT NOW WITH MONEY COMING IN, LIFE HAS BECOME MUCH EASIER. WE CAN SEND OUR CHILDREN TO BE EDUCATED, GIVE THEM CLOTHES, BOOKS, FOOD. I WANT MY CHILDREN TO BECOME OFFICERS, TO BE EDUCATED, LIKE YOU PEOPLE.
>> Reporter: FOR ROSHANEH ZAFAR, THE NEXT CHALLENGE IS TO HELP MORE WOMEN SCALE UP THEIR ENTERPRISES. KASHF HAS SET UP A BANK TO HELP BORROWERS MOVE FROM THE TYPICAL $150 LOAN TO $1,000 OR MORE. HER GOAL IS TO HELP 50,000 BORROWERS CREATE LARGER ENTERPRISES IN THE NEXT THREE YEARS.
>> Lehrer: FRED'S REPORTING IS A PARTNERSHIP WITH THE UNDER-TOLD STORIES PROJECT AT SAINT MARY'S UNIVERSITY IN MINNESOTA.
>> Woodruff: FINALLY TONIGHT, THE MAN AT THE CENTER OF A MASSIVE FINANCIAL FRAUD AND HOW HE MANAGED TO FOOL INVESTORS. JEFFREY BROWN HAS OUR BOOK CONVERSATION ABOUT THAT SUBJECT.
>> Brown: HE SITS IN A FEDERAL PRISON BUT FOR DECADES BERNARD MADOFF WAS A WILDLY SUCCESSFUL STOCK TRADER AND MONEY MANAGER AND THEN UNVEILED AS PERPETRATOR OF THE LARGEST PONZI SCHEME IN HISTORY INVOLVE TENS OF BILLIONS OF DOLLARS. A NEW BOOK "THE WIZARD OF LIES: BERNIE MADOFF AND THE DEATH OF TRUST" CHRONICLES THE STORY. ITS AUTH O"NEW RK TIMES" REPORTER, DIANA HENRIQUES, HAS JOINEDOUS A NUMBER OF TIMES IN THE PAST FEW YEARS TO REPORT ON THE SCANDAL AND IS BACK NOW. WELCOME BACK.
>> NICE TO BE HERE.
>> Brown: GENERAL QUESTION, FIRST.
>> JS YS.
>> Brown: WE'VE TALKED MAIN TIMES AND YOU REPORTED THIS OVER YEARS, WHEN YOU PULLED THIS TOGETHER AS A BOOK DID ANYTHING JUMP OUT AT YOU IN TERMS OF A THEME OR SURPRISE OR WHAT THIS IS ABOUT?
>> EVERY JOURNALIST DREAMS OF WRITING A NOVEL AND HAS ONE IN THE BOTTOM DRAWER. I CAN TAKE THAT OFF MY BUCKET LIST. THIS IS IT. IT HAD SUCH TIMELESSNESS. FRAUDS COME AND FRAUDS GO AND UNFORTUNATELY I'VE HAD TO COVER A LOT OF THEM OVER THE YEARS AND YOU HAVE, TOO, BUT THIS JUST SEEMED TO STRIKE BEDROCK WITH ME. IT WAS SOMETHING SO HUMAN AND SO UNIVERSAL ABOUT TRUST BESTOWED AND TRUST BETRAYED THAT I JUST COULDN'T GET IT OUT OF MY SYSTEM.
>> Brown: AND THE MAN AT THE CENTER OF ALL THIS, AS YOU SAY EARLY ON, ONE THING YOU LEARN IS THAT HIS HABIT OF DECEIT BEGAN EARLIER THAN WE KNEW.
>> IT DID. IN 1962, AS A VERY YOUNG MAN-- HE STARTED THIS FIRM WHEN HE WAS STILL IN COLLEGE, SOY THAT WAS IN 1960-- HE WAS AT AN INTERSECTION BETWEEN EXPLIZ TRUTH. HE HAD A COUPLE OF DOZEN FAMILY--.
>> Brown: ALL THE WAY BACK IN 1962 HE WAS AT THE INTERSECTION?
>> YES, INDEED.
>> Brown: WOW.
>> HE HAD PUT FRIEND AND FAMILY MEMBER INTO WILDLY INAPPROPRIATE STOCKS THAT HIT AN AIR POCKET IN 1962 AND LOST ALL THEIR VALUE. RATHER THAN ADMIT THAT, RATHER THAN GO BACK TO THESE INVESTORS AND SAY, "YOU KNOW, I REALLY LOST YOUR MONEY. I FAILED YOU." HE COVERED IT UP. HE TOOK ALL THE MONEY HIS FIRM HAD MADE IN THOSE TWO YIRZ, AND BOUGHT THOSE SHARES BACK, BORROWED MONEY FROM HIS FATHER-IN-LAW TO RECAPITALIZE THE FIRM, AND NEVER TOLD THEM WHAT HAD HAPPENED. SO THEY, OF COURSE, THOUGHT, OH, THIS YOUNG MAN. HE'S A GENIUS. HE MANAGED TO NAVIGATE THROUGH THIS DREADFUL STOCK MARKET PROBLEM IN '62, AND STILL PRESERVE MY MONEY." SO HE COULD NOT ADMIT FAILURE.
>> Brown: YOU CHRONICLE HERE DECADES OF SUCH DOINGS, AND I SUPPOSE WHAT STILL PEOPLE WONDER IS HOW DID HE PULL IT OFF? YOU KNOW, EVEN WITH SEEMINGLY SOPHISTICATED INVESTORS AND INSTITUTIONS. WERE PEOPLE CREDULOUS OR GULLIBLE OR TO WHAT EXTENT WERE SOME PEOPLE EXPLICIT? WHAT DO YOU CONCLUDE HERE?
>> WELL, MY CONCLUSION, FIRST OF ALL, HE HAD A WONDERFUL SET OF SKILLS FOR A PONZI SCHEMER, FOR A CON ARTIST. HE WAS UNLIKE MOST PONZI SCHEMERS THAT I'VE COVERED-- NOT CHARISMATIC, NOT CHARMING, NOT-- HE WAS NEVER THE MOST CHARMING PERSON IN THE ROOM. HE MADE YOU FEEL LIKE UPPER THE MOST CHARMING PERSON IN THE ROOM.
>> Brown: NOW SDPLAN THAT. HE WOULD MAKE YOU FEEL GOOD ABOUT YOURSELF AND SMART ABOUT YOURSELF, AND, THEREFORE, SO SMART THAT YOU WOULD INVEST WITH MIM.
>> EXACTLY. SO YOU WOULD NEVER DOUBT YOUR JUDGMENT ABOUT TRUSTING MADOFF BECAUSE MADOFF MADE YOU FEEL LIKE YOU WERE A GENIUS, TOO. SO HE-- WHEN I INTERVIEWED HIM IN PRISON IN AUGUST OF 2010, I HAVE TO ADMIT, HE MADE ME FEEL LIKE I WAS THE MOST INTERESTING, INTELLIGENT REPORTER HE'D EVER MET IN HIS LIFE. HE HAD THAT MAGIC. IT REALLY IS AMAZING. HE ALSO HAD ANOTHER GIFT, I THINK, GOT UNDER PEOPLE'S DEFENSES, AND THAT WAS HE MADE YOU FEEL SAFE. AND AS MARKETS GOT SCARIER, MORE VOLATILE, MORE TURBULENT, MORE COMPLEX, ALL THESE DERIVATIVES AND ALL THESE FANCY PRODUCTS, MADOFF MADE IT SIMPLE FOR YOU AND HE MADE YOU FEEL SAFE. SO UNLIKE TYPICAL PONZI SCHEME THAT TENDED TO EXPLOIT PEOPLE'S GREED, MADOFF EXPLOITED PEOPLE'S FEARS. HE MADE YOU FEEL LIKE HE COULD KEEP YOU SAFE IN THIS INCREASINGLY FRIGHTENING MARKET. AND THAT DREW AN AWFUL LOT OF CONSERVATIVE INVESTORS TO HIM, THINKING THAT THEY WERE GIVING UP HIGH-FLYING RETURNS TO GET THE SAFETY AND CONSISTENCY THAT MADOFF GAVE THEM.
>> Brown: ONE QUESTION IS OVERSIGHT, THE REGULATORS. IT'S NOT LIKE THE S.E.C. WAS NEVER ALERTED TO SOMETHING GOING ON, RIGHT?
>> RIGHT.
>> Brown: WHAT'S YOUR CONCLUSION LOOKING AT THESE YEARS?
>> WHAT'S SO FRUSTRATING, IT'S NOT THAT THE S.E.C. DID NOTHING AS PEOPLE SOMETIMES REACT. THEY SAY, "THE S.E.C. GOT ALL THESE TIPS AND DIDN'T DO ANYTHING". FRUSTRATINGLY THEY DID DO SOMETHING. THEY UNDERTOOK ONE FUMBLED FAILED INVESTIGATION AFTER ANOTHER. AS I WAS PUTTING THAT PART OF THE STORY TOGETHER IN THE BOOK, IT WAS LIKE WATCHING THE "TITANIC" SAIL TOWARDS THE ICEBERG. YOU JUST WANTED TO SHOUT OUT LOUD-- NO! SEND THAT LETTER! MAKE THAT PHONE CALL. GO ONE STEP FURTHER. AND THEY NEVER DID. YOU JUST GET A SENSE OF AN AGENCY THAT COULD NOT IMAGINE THAT THIS MAN THEY HAD RESPECTED AND RELIED ON FOR GUIDANCE AND ADVICE FOR DECADES COULD POSSIBLY BE RUNNING A FRAUD, EVEN THOUGH THEY CAUGHT HIM RED HANDED TELLING THEMMALIZE.
>> Brown: YOU KNOW, I WANT TO GO BACK TO YOUR INTERVIEW WITH HIM IN PRISON.
>> YES.
>> Brown: BECAUSE YOU SAY-- YOU WRITE HE SEEMS UNFAILINGLY CANDID, EARNEST, AND TRUSTWORTHY BUT THEN HE ALWAYS DOES, EVEN WHEN HE'S LYING. THAT IS HIS TALENT AND CURSE. WHAT WAS IT LIKE TO BE THERE WITH HIM AND WHAT IS THE ATTITUDE NOW TOWARDS THE CRIME AND THE VICTIMS?
>> THE CHANGE I SAW BETWEEN MY FIRST VISIT WITH HIM IN AUGUST AND MY SECOND IN FEBRUARY WAS QUITE DRAMATIC. THE MAN I MET IN AUGUST WAS VERY SIMILAR TO THE MAN I HAD KNOWN ON WALL STREET-- VERY PRECISE, VERY PLAINSPOKEN, VERY ACCESSIBLE. THE MAN I SAW IN FEBRUARY WAS VERY DIFFERENT. I WAS, OF COURSE, INTERVIEWING HIM JUST TWO MONTHS AFTER THE DEATH OF HIS SON, MARK, WHO MITTED SUICIDE ON THE SECOND ANNIVERSARY OF HIS FATHER'S ARREST. AND MADOFF WAS SDEFLD. -- DISHEVELED. HE WAS INTENSE RATHER THAN HUMOROUS. HE SEEMED SHAKY TO ME, AND SO THAT DIFFERENCE BETWEEN THOSE TWO MEN THAT I IN THE IN PRISON STRUCK ME VERY STRONGLY, BUT THERE WAS STILL THAT LASER-LIKE FOCUS ON WHAT HE WANTED TO SAY WHAT HE WANTED-- THE MESSAGE HE WANT TO DELIVER. AND, OF COURSE, ON THE SECOND VISIT, THAT MESSAGE WAS, "OH, THE BANKS, THE BANKS. THEY MUST HAVE KNOWN." IN FACT, HE TOLD ME--.
>> Brown: NOW HE'S SAYING THEY MUST HAVE KNOWN.
>> NOW HE'S SAYING THEY MUST HAVE KNOWN. HE TOLD ME AT THE END OF THE INTERVIEW-- WE WERE ALREADY STANDING UP AND THE GUARDS WERE MOVING HIM TOWARDS THE DOOR BECAUSE THE TIME WAS WELL PALSS HE SAID, "I NEVER REALIZED UNTIL I READ THESE LAWSUITS OF THE TRUST EASE FILING AGAINST THE BANKS HOW SUSPICIOUS THEY WERE BECOMING OF ME."
>> Brown: REALLY.
>> BECAUSE IN THEIR DEALINGS WITH HIM THEY GAVE NO INDICATION THEY WERE BEGINNING TO HAVE DOUBTS.
>> Brown: JUST TO FINISH, YOU STARTED BY SAYING THIS WAS A NOVEL YOU ALSO WANTED TO WRITE WITH THESE CHARACTERS. ARE THERE STILL MYSTERIES ABOUT BERNIE MAY DOVE AND ANY SCHEMES, THING YOU STILL WONDER ABOUT?
>> OH, THERE ARE. I WISH WE COULD NAIL DOWN WHEN IT STARTED. I SAY IT STARTED MUCH SOONER THAN MADOFF ADMITS. HE SAID 1992. I DO NOT FIND THAT CREDIBLE. I I THINK IT'S PLAUSIBLE IT WAS AROUND AROUND THE MID-80s BUT IT WOULD MEAN A LOT TO HIS VERY EARLY INVESTORS TO KNOW WHETHER HE WAS EVER HONESTLY MANAGING THEIR MONEY OR WHETHER HE JUST COLD BLOODEDLY TOOK IT ARE THEM FROM THE BEGINNING INTENDING TO STEAL IT. SO I WISH WE COULD GET THE ANSWER TO THAT.
>> Brown: IN THE MEANTIME, THE EFFORT TO GET BACK AS MUCH AS OF THIS MONEY AS POSSIBLE CONTINUES.
>> IT DOES. AND IT'S A REMARKABLE LEGAL BATTLE, ONE WE'RE GOING TO BE WATCHING CLOSELY IN THE YEARS TO COME. IT'S GOING TO MAKE NEW LAW. IT'S GOING TO GUIDE THE REST OF US AND AFFECT OTHER INVESTORS WHO GET CAUGHT IN CRIMES LIKE THIS.
>> Brown: THE BOOK IS "THE WIZARD OF LIES," "NEW YORK TIMES" REPORTER DIANA HENRIQUES. NICE TO TALK TO YOU.
>> NICE TO BE HERE.
>> Lehrer: AGAIN, THE MAJOR DEVELOPMENTS OF THE DAY: THE PRESIDENT AND CONGRESSIONAL LEADERS WORKED ON A RECIPE FOR REDUCING THE NATIONAL DEBT. ON THE "NEWSHOUR," SENATE MINORITY LEADER MITCH McCONNELL SAID AGAIN REPUBLICANS WILL NOT ACCEPT TAX HIKES. BUT HE SAID HE'S OPTIMISTIC ABOUT GETTING A DEAL ON SPENDING CUTS THAT WILL IMPRESS THE MARKETS AND ASTONISH THE AMERICAN PEOPLE. AND THOUSANDS OF PEOPLE ALONG THE MISSISSIPPI RIVER SPENT ANOTHER DAY TRYING TO HOLD BACK THE WATER AND TRYING TO GET OUT OF THE WAY. AND TO HARI SREENIVASAN, FOR WHAT'S ON THE "NEWSHOUR" ONLINE. HARI?
>> Sreenivasan: MARGARET WARNER IS REPORTING FROM BAHRAIN THIS WEEK. YOU CAN READ HER FIRST DISPATCH ON OUR WORLD PAGE. WE EXPLORE THE SCIENCE OF TORNADOES, AFTER THIS SPRING'S DEADLY TWISTERS AND ASK, WHAT ARE THE CONDITIONS THAT CREATE THE POWERFUL STORMS? PLUS, WHAT'S IT LIKE TO SPEND ONE YEAR INSIDE THE "NEW YORK TIMES" NEWSROOM? A NEW DOCUMENTARY CALLED "PAGE ONE" EXPLORES THE INNERWORKINGS OF THE NEWSPAPER. WE TALKED TO THE FILM'S DIRECTOR ON THE RUNDOWN BLOG. ALL THAT AND MORE IS ON OUR WEB SITE, newshour.pbs.org. JUDY?
>> Woodruff: AND THAT'S THE "NEWSHOUR" FOR TONIGHT. I'M JUDY WOODRUFF.
>> Lehrer: AND I'M JIM LEHRER. BEFORE WE GO THIS THURSDAY NIGHT I HAVE A PERSONAL PERSONNEL UPDATE. AS YOU REGULAR VIEWERS, KNOW, FOR SOME TIME NOW, I'VE BEEN GRADUALLY STEPPING BACK FROM MY DAILY ON-AIR DUTIES. THAT REALLY BEGAN IN DECEMBER 2009 WITH THE COMING OF THE PBS "NEWSHOUR". AS OF JUNE 6, ANOTHER PHASE WILL BEGIN. I WILL NO LONGER BE PART OF THE ONGOING DOUBLE ANCHOR ROTATION. THOSE DUTIES WILL BE PERFORMED BY OUR SUPERB TEAM ALREADY WELL KNOWN TO EVERYONE GWEN AISLE, JUDY WOODRUFF, JEFFREY BROURNG WARN AND RAY SUAREZ. I WON'T COMPLETELY DISAPPEAR, NOT FOR A WHILE AT LEAST. I'LL BE HERE MANY FRIDAY TO PARTICIPATE IN THE JOY OF MODERATING THE REMARKABLY CIVILIZED DISCUSSIONS OF MARK SHIELDS AND DAVID BROOKS AND THEIR SUBSTITUTES, RUTH MARCUS AND MICHAEL GERSEN, AMONG OTHERS. I WILL ALSO REMAIN INVOLVED IN THE PRINCIPAL EDITORIAL THRUST OF THE "NEWSHOUR" AND OF OUR ECONOMY, MacNEIL/LEER PRODUCTIONS. I'VE BEEN LABORING IN THE GLORIES OF DAILY JOURNALISM NOW FOR 52 YEARS. 36 OF THEM HERE AT THE "NEWSHOUR", AND ITS EARLIER INCARNATIONS AND THERE D CO A TIME TO STEP ASIDE FROM THE DAILY PROCESS AND THAT TIME HAS ARRIVED. FOR NOW, WE'LL SEE YOU ONLINE AND AGAIN HERE TOMORROW EVENING WITH MARK SHIELDS AND MICHAEL GERSEN, AMONG OTHERS. THANK YOU, AND GOOD NIGHT. MAJOR FUNDING FOR THE PBS NEWSHOUR HAS BEEN PROVIDED BY:
>> I MEAN, WHERE WOULD WE BE
>> AUTO COMPANIES MAKE HUGE PROFITS.
>> LAST YEAR, CHEVRON MADE A LOT OF MONEY.
>> WHERE DOES IT GO?
>> EVERY PENNY AND MORE WENT INTO BRINGING ENERGY TO THE WORLD.
>> THE ECONOMY IS TOUGH RIGHT NOW, EVERYWHERE.
>> WE PUMPED $21 MILLION INTO LOCAL ECONOMIES, INTO SMALL BUSINESSES, COMMUNITIES, EQUIPMENT, MATERIALS.
>> THAT MONEY COULD MAKE A BIG DIFFERENCE TO A LOT OF PEOPLE. AND BY THE ALFRED P. SLOAN FOUNDATION. SUPPORTING SCIENCE, TECHNOLOGY, AND IMPROVED ECONOMIC PERFORMANCE AND FINANCIAL LITERACY IN THE 21ST CENTURY. AND WITH THE ONGOING SUPPORT OF THESE INSTITUTIONS AND FOUNDATIONS. AND... THIS PROGRAM WAS MADE POSSIBLE BY THE CORPORATION FOR PUBLIC BROADCASTING. AND BY CONTRIBUTIONS TO YOUR PBS STATION FROM VIEWERS LIKE YOU. THANK YOU. Captioning sponsored by MacNEIL/LEHRER PRODUCTIONS Captioned by Media Access Group at WGBH access.wgbh.org VO:GEICO, COMMITTED TO PROVIDING SERVICE TO ITS AUTO INSURANCE CUSTOMERS FOR OVER 70 YEARS. MORE INFORMATION ON AUTO INSURANCE AT GEICO.COM OR 1-800-947-AUTO ANY TIME OF THE DAY OR NIGHT.
Series
PBS NewsHour
Episode
May 12, 2011 7:00pm-8:00pm EDT
Producing Organization
NewsHour Productions
Contributing Organization
Internet Archive (San Francisco, California)
AAPB ID
cpb-aacip/525-p843r0r24z
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Description
Description
News/Business. Jim Lehrer, Gwen Ifill, Judy Woodruff. (2011) New. (CC) (Stereo)
Date
2011-05-12
Media type
Moving Image
Duration
01:00:00
Embed Code
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Credits
Producing Organization: NewsHour Productions
AAPB Contributor Holdings
Internet Archive
Identifier: WETA_20110512_230000_PBS_NewsHour (Internet Archive)
Duration: 01:00:00
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Citations
Chicago: “PBS NewsHour; May 12, 2011 7:00pm-8:00pm EDT,” 2011-05-12, Internet Archive, American Archive of Public Broadcasting (GBH and the Library of Congress), Boston, MA and Washington, DC, accessed December 8, 2024, http://americanarchive.org/catalog/cpb-aacip-525-p843r0r24z.
MLA: “PBS NewsHour; May 12, 2011 7:00pm-8:00pm EDT.” 2011-05-12. Internet Archive, American Archive of Public Broadcasting (GBH and the Library of Congress), Boston, MA and Washington, DC. Web. December 8, 2024. <http://americanarchive.org/catalog/cpb-aacip-525-p843r0r24z>.
APA: PBS NewsHour; May 12, 2011 7:00pm-8:00pm EDT. Boston, MA: Internet Archive, American Archive of Public Broadcasting (GBH and the Library of Congress), Boston, MA and Washington, DC. Retrieved from http://americanarchive.org/catalog/cpb-aacip-525-p843r0r24z