tv PBS News Hour PBS September 30, 2010 7:00pm-8:00pm EDT
i'm jeffrey brown. the u.s. treasury and insurance giant a.i.g. unveiled a plan today to speed up the repayment of more than $100 billion in federal bailout money. >> suarez: and i'm ray suarez. on the "newshour"
tonight, economic writers louise story of the "new york times" and roben farzad of "bloomberg business week" weigh the pluses and minuses of the deal. >> brown: then, kwame holman looks at the down-to-the-wire scramble as congress pushed to adjourn just weeks ahead of the midterm elections. >> suarez: judy woodruff talks to speaker of the house nancy pelosi about the battle over tax cuts and the stakes for democrats in november. >> our members left congress last night. they are confident that they would return in the majority. >> brown: special correspondent miles o'brien reports on a mississippi community's plan to use stimulus money for mass transit in rural areas. >> suarez: betty ann bowser updates the johnson and johnson story as company executives and the f.d.a. come under fire on capitol hill for a string of recalls, real and phantom, this year. >> brown: and we visit a project
in pittsburgh that offers foreign writers whose lives are endangered, a new start, and the
chance to write freely. >> i think i'm writing social issues, but in burma, social issues are political issues. >> brown: that's all ahead on tonight's "newshour." major funding for the pbs newshour has been provided by: >> this is the engine that connects abundant grain from the american heartland to haran's best selling whole wheat, while keeping 60 billion pounds of
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>> suarez: the federal government and the bailed-out insurance giant, a.i.g., announced a deal today for the company to pay back the bulk of its massive debt to the treasury. at the height of the financial crisis, the treasury and the federal reserve agreed to spend more than $180 billion if needed to rescue the company. a.i.g. ultimately received more than $130 billion. it still owes over $100 billion. under the plan, the u.s. treasury will gradually sell off its majority stake of the company. a.i.g. will also sell off more of its insurance units to repay the treasury. in an audio recoding on a.i.g.'s web site, the company's chief executive robert benmosche predicted taxpayers would ultimately come out ahead. >> this plan adheres to the basic commitment we made on september 16, 2008 that a.i.g. would fully repay taxpayers. and i strongly believe, given how powerfully a.i.g. and its businesses have rebounded, that
we will repay the taxpayers with a profit. >> suarez: for a closer look at what shape the government and the company might find themselves in as they emerge from this unusual union. we turn to two financial writers who have followed the story closely going back to the early days of the financial crisis: roben farzad is senior writer at "bloomberg businessweek" magazine and louise story covers wall street for "the new york times." >> suarez: louise, you met with treasury officials in just the last few hours before the program. how did they explain the deal to you? >> i spoke with them on the phone, and what i understand they were trying to do was balance the interest of both the company -- because there are public shareholders out on the market that own some a.i.g. -- with that of the taxpayer. of course, you know, this is the company where the taxpayers got the biggest stake of all the financial companies. this is the company where the taxpayer owns the most.
after this deal, the taxpayer will own 92% of the insurance giant. >> suarez: and how will those shares are priced once the government decides to sell them off in the open marketplace, to get itself out of the a.i.g.-owning business? >> that is the huge negotiating part for a.i.g. and the government. over the past few weeks, they have been working night and day to agree on what a.i.g. is worth, because the dollar value they used to convert the government's preferred shares into common stock puts the value on a.i.g., so people i have been talking with have been debating. some people say this puts a value of $45 per share on a.i.g., some people say $29 per share, and the debate centers around whether you count the shares the government already had going back from two years ago from the fed loan to a.i.g., so you can argue it both ways. the thing that's really
important is that the taxpayer got these shares, paying at least $29 a share for it so over the next many months and years the taxpayer is going to have to be able to sell these shares for more than $29 to make any sort of profit. >> brown: robin, as a.i.g. converts from preferred shares to common shares, this u.s. government stake, doesn't that expose the u.s. taxpayer to even more downside risk than they had before? >> the idea is not for the government to sit out there and be a mutual-fund-like holder of these common shares. they're not portfolio managers. they did this holding their news and dragging their feet. they're looking to sell the shares in an orderly manner but in an expeditious manner. look, they want to offload this stuff and get hard cash back. it's a huge black eye. the september 2008 kind of gun to the head negotiations with the entire economy at the brink,
and i think it's critical for treasury to have this type of symbolic victory, but i disagree with what robert benmosche said in the recording there, it's incredibly deceptive to think that the taxpayer and the system is going to be made whole with even woo 100 or $150 billion paid back. the government and the treasury and the federal reserve and the new york fed have stepped in and taken measures at multiples the $180 billion bailout sticker price. you still have the federal reserve pursuing quantitative easing which is going out there and conjuring money out of thin air to buy toxic assets -- the very likes of these assets backed and insured by a.i.g., so while it might make sense from a headline perspective the taxpayer is going to make potentially a profit, going out three or four years, it's cold
comfort for a economy that's lost millions. >> you heard robin sounding skeptical. what price would those shares have to sell at in order for the taxpayer to even break even? is it much higher than the shares are trading right now? >> it's just below where the shares are trading, so they need to sell them for $29 a share, but the problem is the government owns almost the entire company. it's like if you own 92 homes in a neighborhood that had 100 homes and you wanted to sell all those homes, but every house you put on the market is going to affect the price of the other houses, potentially, and so the government is going to have a very tricky song and dance where they have to slowly sell this so they don't drive the price down too much because they've got all those other shares to sell. >> louise, let's reel back a little bit and remind people how the federal government ended up owning those 92 homes in the first place. what happened?
>> if you remember in september 2008, it was right after lehman brothers failed, the economy was on the brink, there was major panic, and a.i.g., one of the things they did that is the reason they failed is they wrote all these insurance contracts to banks, so banks like goldman sachs, and deutsche bank, and merrill lynch -- they had gotten a.i.g. to insure them against losses on their mortgage bonds, and sure enough, when the mortgage market went south, a.i.g. was paying out all these insurance claims to the banks, they couldn't afford it, and so the government stepped in and bailed out a.i.g. this is very controversial, because a lot of the money the government put into a.i.g. went right out the back door to the banks who had contracts with a.i.g., and that's part of the reason this has been one of the most controversial bailouts. >> suarez: robin, an indirect bank bailout to even more institutions we were aware of when it was happening? >> yeah. they got bailed out for the sins
of wall street. you talk to old-school a.i.g. executives, and they say that they were a patsy, or that they were crucified for everybody else's sins, that it was a transitive backdoor bailout, and in reality that's what it was, and the thing that held the entire system hostage was not just that a.i.g. being allowed to fail would subsume the entire system but a.i.g. was managing pensioner funds, 401(k)'s, municipal bonds, it was unthinkable in the haze of those terrifying days of september 2008, and october, to let this thing just fall and see how the dust cleared afterwards. so that's why -- >> suarez: did the ensuing two years, roben, provide a breather for a.i.g. to become a much more stable operation as the federal government is trying to figure out how to get out of it? >> yes, but you have to -- let me wax cynical here. you have to buy the fiction of it. you're no longer dealing with a
bunch of pyrotechnical -- i'm sorry, a bunch of pyromaniacs in the executive suite, it's the government that's the counter party so a.i.g. has enjoyed much lower borrowing costs, this is a way of dealing with the most credit worthy asset in the government so the government has cleaned up really their liability that protected them and they have been able to go out and reap the rewards of the bond market coming back, of the old, staid business, property and casualty coming back but you have to subscribe to that accounting and the taxpayer's really been on the hook for all of that, so let's see how this plays out. let's see if benmosshe's property can come true and the taxpayer can make a true profit on this in three or four years. >> brown: louise, before we go, tim geithner has referred to this shortening the time line a great deal. >> suarez: how long will it take for the united states government to get out of a.i.g.?
>> even treasury officials are saying today that it won't be until february or march next year that they kick off this plan where they'll start selling the stock, and a lot of different investors i have spoken to out there think that could take months, if not years. again, they're trying to sell a whole neighborhood, and it is very tricky. >> suarez: louise story and roben farzad, thank you both. >> thank you. >> thank you, ray. >> brown: still to come on the "newshour": as congress heads home to campaign, we talk to house speaker nancy pelosi. plus, stimulus dollars and public transit in mississippi; a drug maker under fire and a safe haven for writers in danger. but first, the other news of the day. here's hari sreenivasan in our newsroom. >> sreenivasan: the white house chief of staff rahm emanuel plans to resign tomorrow, to run for mayor of chicago. it was widely reported today that president obama will make the announcement tomorrow morning. white house spokesman robert gibbs would not confirm the move, but he did praise emanuel's contribution. >> he has been the leader of, i mean the title chief of staff in
many ways says it all. he has been the energetic, inspirational leader of us taking the president's promises and agenda and enacting them into law. >> sreenivasan: emanuel was elected to congress from chicago's north side in 2002. he rose to become part of the house democratic leadership, before taking the chief of staff job under president obama. first-time claims for unemployment benefits fell last week for the third time in four weeks. and growth in the second quarter was slightly better than initial estimates. the news sent wall street higher at first, but stocks pulled back later, to end the day with losses. the dow jones industrial average lost 47 points to close at 10,788. the nasdaq fell nearly eight points to close at 2,368. overall, the dow gained 8% this month-- its best september since 1939. more than 50,000 home foreclosures are now frozen, while j.p. morgan chase checks for errors in legal documents. the bank said late wednesday that employees may have signed affidavits in foreclosures, without verifying the information.
j.p. morgan-chase is the second major company to impose a foreclosure freeze this month. last week, g.m.a.c. mortgage halted evictions and sales of foreclosed homes in 23 states. a banking crisis sent new shock waves across ireland today. the government acknowledged it will take another $16 billion to bail out irish banks. that brings the total to nearly $70 billion. meanwhile, in south america, police and troops plunged ecuador into chaos, in a protest over benefit cuts. they seized the main airport in the capital city, quito, and shut off road access. pakistan cut off a key supply route for u.s. and nato forces in afghanistan today. it followed a disputed nato raid along the border, and escalated tensions between pakistan and the u.s. dozens of trucks that carry supplies to u.s. and nato troops were turned back today on the pakistani side of the border. officials said they were stopped at the edge of the khyber tribal region on a major access route into afghanistan. some of the convoys returned to
peshawar, to unload massive containers filled with military goods. hours earlier, pakistani officials said nato helicopters struck inside their territory, killing three government soldiers. the interior minister said his government was no longer content with mere verbal protests. >> ( translated ): it should not be only a formal condemnation. it should be more than a formal condemnation, because we will not tolerate these kinds of attacks in which our regular soldiers and frontier corps soldiers or border security people come under attack. we will have to see whether we are allies or enemies. >> sreenivasan: meanwhile, prime minister yusuf gilani met with visiting c.i.a. director leon panetta in islamabad. gilani said he was profoundly concerned about a recent surge in drone and helicopter strikes. nato and u.s. officials said they were investigating today's incident. but they maintained a special agreement allows for and justifies hot pursuit of attacking militants across the pakistan afghanistan border.
five nato troops were killed in southern afghanistan today. three died when a homemade bomb exploded. the others were killed in separate attacks. nato did not give their nationalities. meanwhile, the u.n. reported afghanistan's opium production fell by half this year. disease heavily damaged the poppy fields. former president jimmy carter has been released from a hospital in cleveland. he left today after recovering from a viral infection. the former president was taken ill tuesday during a flight from atlanta. he'd been traveling to promote his new book, "white house diary". toy maker fisher-price issued a host of recalls today over safety concerns. the list includes seven million toddler tricycles and one million high chairs. both of which have parts that are blamed for injuries to children. more than two million other toys were also recalled. fisher price is offering free repairs or replacements for all
the products. postage rates will not be going up again, for now. the postal service had asked to raise the price of mailing a first class letter by two cents to 46 cents. but the agency's overseer -- the postal regulatory commission -- denied that request today. the postal service lost $ 3.8 billion last year. actor tony curtis died last night at his home in the las vegas area. he suffered a heart attack. curtis had a series of hits in the 1950's, including "the defiant ones" and "sweet smell of success". in "some like it hot", he starred with jack lemmon, as musicians who witness a mob killing and dress in drag to get away. nevada, jacksonville and miami. all aboard, all aboard. ♪ >> what's the matter now? >> how do they walk in these things? huh? how do they keep their balance? >> it must be the way the weight is distributed. now, come on. >> it's so drafty.
they must be catching cold all the time, huh? >> will you quit stalling? we're going to miss the train. >> i feel naked. everybody is staring at me. >> with those legs? come on. >> sreenivasan: later in his career, curtis battled drug and alcohol addiction. he recovered in the early 1980s, and continued in movies and television. he also became an accomplished painter. tony curtis was 85 years old. those are some of the day's major stories. now, back to jeff... >> brown: they haven't finished their work for the year, but members of congress adjourned overnight, to return to their districts with 33 days to go before the mid-term elections. newshour congressional correspondent kwame holman reports. >> reporter: in the house, democratic leaders struggled just to pass the motion to adjourn, and head home to campaign. ( gavel bang ) >> on this vote, the yeas are 210, the nays are 209. >> reporter: 39 democrats joined house republicans, to oppose adjournment. they wanted to stay until congress extends the bush-era tax cuts that expire in december. but that appeal fell short in the house and the senate, where republicans said it was a
telling failure. >> the democratic congress is going home this week with more concern about their jobs than the jobs of 10% of the american people who don't have jobs. with more concern about election day than new years day when we'll have one of the biggest tax hikes in american history. >> reporter: on the other hand, senate majority leader harry reid-- locked in a tough re- election fight-- argued going home was in everyone's best interest. >> we may not agree on much, but i think, with rare exception, all 100 senators want to get out of here and get back to their states. >> reporter: before scattering, house members and senators did pass a temporary spending bill to fund government operations for the next two months. that left unfinished ten of the 12 annual appropriations bills-- legislation that will be re- engaged in a lame duck session after the election. and possible house ethics trials for representatives charles rangel and maxine waters also
will wait until november. in the meantime, many embattled democrats will face voters frustrated about the bad economy and angry over government deficits. and they'll have to work to defend votes for president obama's economic stimulus and the new health care law both unpopular with some voters. but democratic leaders, including house majority leader steny hoyer, insist those measures were signal accomplishments. he said today it's the most productive congress he's known. >> republican strategy has been to create gridlock and failure. that has been their objective in house and senate. what was the result? they failed. but gave impression to the american people we couldn't work together. that was their political strategy. >> reporter: this afternoon, house minority leader john boehner laid out a republican
view. he spoke at the american enterprise institute in washington. >> the house finds itself in a state of emergency. the institution does not function, does not deliberate, and seems incapable of acting on the will of the people. from the floor to the committee level, the integrity of the house has been compromised. the battle of ideas, the very lifeblood of the house is virtually nonexistent. leaders overreach because the rules allow them to. legislators duck their responsibilities because the rules help them to. and when the rules don't suit the majority's purposes, they are just ignored. there's no accountability, and there are no consequences. whether we here in washington believe this or not, the people clearly do. >> reporter: to improve accountability, boehner called for a radical change in the way congress handles its bread and butter-- appropriations.
>> most spending bills come to the floor prepackaged in a manner that makes it as easy as possible to advance government spending and programs, and as difficult as possible to make cuts. again, this is not a new problem. but if we're serious about confronting the challenges that lie ahead for our nation, it's totally inadequate. i propose today a different approach. let's do away with the concept of comprehensive spending bills. let's break them up, to encourage scrutiny, and make spending cuts easier. rather than pairing agencies and departments together, let them come to the house floor individually, to be judged on their own merit. >> reporter: boehner's proposal would include a "cut-as-you-go" rule-- forcing lawmakers to cut or end an existing program anytime they create a new one. >> suarez: and to our newsmaker interview with house speaker nancy pelosi. judy woodruff talked to her at the capitol before minority
leader boehner's speech today. >> woodruff: house speaker nancy pelosi, thank you very much for talking with us. >> my pleasure, thank you. >> woodruff: virtually every respected political analyst in this town, around the country, are saying the republicans are poised to take control of the house of representatives. how worried are you? >> i think it's great that they think that, but we are acting upon another possibility, and that is that we will hold the house. our members left congress last night very confident that they would return in the majority. we take it one district at a time. nothing less is at stake than the choice between going back to the exact agenda of the bush administration, or moving america forward, and our members are ready for the fight. again, we take it one district at a time. for some reason, when they come here, they say what's all this conversation about in washington?
we don't see that in our districts. >> woodruff: the voters say the main issue on their minds is jobs. what do you say to voters that makes them believe that democrats are going to create more jobs than republicans especially when the democrats haven't been able to do anything significant here in the last few weeks? >> well, the fact is that -- >> woodruff: about jobs. >> we have done a great deal about jobs from day one. when president obama took office immediately, one week and one day later, we passed the recovery act, which created or saved 3.6 million jobs. and i want to add that in the first eight months of 2010 alone, more private sector jobs were created than in the eight years of the bush administration, so we have to go tell our story and understand that this is a choice. the american people love choice, and they will have a choice in this election, and so in terms of jobs, from day one we created or saved 3.6. the job situation is not where we want it to be.
we have to do more. that's why we have to get re-elected, to move forward, instead of going back to the failed economic policy that is got us where we are in the first place. >> woodruff: i ask, because voters keep raising jobs as their main concern. the one thing many democrats think that congress should have done before adjournment is pass middle-class tax cuts to accentuate the differences with republicans. the decision was made not to go for that vote. was that a miscalculation? >> no, not at all. it's a decision, because the fact is our president got out there and talked about giving a tax cut to all americans. not -- but he does not agree that we should give an extra bonus to people making over $250,000 a year. they too will get a tax cut under president obama's plan. we support that. our members are fully prepared to go home and talk about what they support in it. it doesn't require a vote to take a position on it, so we
feel -- we are very confident about the decisions that we have made, about the priorities and legislation that we have passed, health care reform for all americans, improving quality, expanding coverage, lowering costs, wall street reform -- the list goes on. members are going home to talk about that, but also to talk about the future. what is the choice. and one of those choices is, do we give a tax cut to everyone which creates jobs? or do we give a tax cut -- a bonus to the upper incomwhich will only add to the deficit? we're not going to do that. >> woodruff: well, speaking of that, there are 47 house democrats -- about a fifth of your democratic caucus -- who are urging you and the president to go along with extending tax cuts on investments like the capital gains tax. their argument is that if it's a tax that's going to create jobs, even if someone's income is higher than $250,000, why not go ahead and do it?
and isn't this going to be, now, inevitable when you've got more republicans in the congress after november? >> well, we intend to have a majority in the congress after november, but the fact is if they want to go into other issues related to the tax code, we're all for putting everything on the table, talking about simplification, talking about fairness, perhaps lower the corporate rate if we close loopholes and some of the things that we have done have been very good for small businesses -- we probably passed 16 tax considerations favorable to small businesses. but the decision here, and the distinction here is do you want to give a tax cut to all americans which creates jobs? or do you want to hold that tax cut hostage to giving an extra tax cut to the high end which will take us $700 billion into debt? we're not going to do that. >> woodruff: but is there room, though, for compromise on tax cuts on investments? for people who earn income through
investments that create jobs? million dollars -- >> our position is clear. everybody gets a tax cut. if you make over $250 million -- $250,000 a year, you do not get an extra tax cut. most of that tax cut, by the way, at the high end goes to people making over -- 80% of it goes to people making over a million dollars a year as joint filers. so we feel very clear about our position. it's where jobs are created. it is not where the deficit is increased. and democrats, as i say, will go out there and make that case. >> woodruff: house minority leader john boehner is giving a speech today in which he is talking about reckless democrats and saying, among other things, we're told, that there needs to be an end to comprehensive spending bills -- that spending bills need to be done department by department. >> that's great. the fact is, though, that the republicans in the senate have
held up legislation over and over again. that's why we have to go to a comprehensive bill. i agree. i would much rather do it. we're prepared to. we've taken our bills through their subcommittees which is where you do it -- not one department at a time, but two or three departments at a time, which is how congress is set up. but it's interesting that he would say that because that's not what they did when they were in power. >> woodruff: i know you believe and you have said the democrats are going to have the majority, you're going to be the next speaker but to the republicans who say john boehner is going to be the next speaker, what kind of speaker will he be? >> i'm not here to talk about that because i'm not predicating any conversation on the basis of democrats not winning the majority. we're proud of our record. we know what the choice is for the future. we have the candidates. the candidate will always tell. battle-tested, courageous, convinced of the fact that
nothing less is at stake in this election except the future of the middle class. >> woodruff: some of those candidates are -- who are running for reelection, though, are running against -- trying to distance themselves from you. they're out there is aing, "i didn't go along with nancy pelosi. -- they're out there is aing, "i didn't go along with nancy pelosi -- they're out there saying "i didn't go along with nancy pelosi." >> that's their record. we don't have -- sometimes washington gets used to a rubber-stamp congress which was the very homogeneous congress of the republicans. we are very diverse in opinion, gender, generation, geography, philosophy and the rest -- house democratic caucus -- and some members did not vote for some the bills and that's their record and that's what they go out and say. i just want them to win. they know their districts. they are great communicators. very eloquent communicators to their own constituents. and they are the ones who will
be the independent representatives. i say to them, "your job description and your title are one and the same. representative." so they run on who they are. they don't run on -- and what this is about, again, just takes it to the middle class. it's not about me, it's about the middle class. they know that. that's what unites us. >> woodruff: even if they're implying criticism of you in a campaign? >> they took a different vote, so that's a disagreement. i don't call that a criticism. >> woodruff: when it comes to health care reform, madam speaker, the republicans are talking about if we can't repeal it we're going to defund it, we're going to make sure important pieces of it are not funded. >> that's another important reason we must win this election, and we will, making health care affordable, accessible and higher quality is important to the american people, republicans want to defund -- stopping a denial of coverage because you have a preexisting medical condition.
stopping repeal of your -- of your policy because you become sick or because you need an operation. the list goes on and on of very positive initiatives which have already gone into effect that the republicans want to defund, so our members know that it was one thing to pass historic health care reform. now, we have to make sure it is enforced. the republicans want to stand in the way of that. >> woodruff: one last question about post-election, lameduck session. >> yeah. >> woodruff: you will presumably be dealing with the tax cut. what else do you have in mind that might be part of the lameduck? >> anything we do, i always say to members that it has two standards. does it create jobs? does it reduce the deficit? as we go forward in the lameduck and even beyond it's about job creation, it's about innovation, and that begins in the classroom. it's about keeping america number one. it's about making it in america. >> woodruff: any specific proposals? >> well, we do have -- we havea an agenda for this, but in terms
of -- what we must do is pass our -- our bills to fund the government and go forward -- and again, deficit-reducing, positive way to create jobs and we'll have to do the tax cuts in the lameduck. in the lame duck. but it is -- it is the way -- there is a lot of time between the election and the new congress, traditionally, we have come back to do the people's business. we will come back and we will be preparing for a democratic majority. i wouldn't say that if i didn't believe it was so. that i wasn't so convinced that our members are battle-tested, ready for the campaign and we'll see. >> woodruff: on that note, house speaker nancy pelosi, thank you very much for talking with us. >> thank you. my pleasure. >> suarez: we have requested an interview with house republican leader john boehner. >> brown: next: a story about how federal stimulus dollars are helping build a new transportation system in rural mississippi. it's another in our "blueprint america" series-- a collaboration with wnet.org in new york city. the reporter is special correspondent miles o'brien.
>> unit one, gonna be 10-80 leaving the center. >> reporter: it's 6:00 a.m. in natchez, mississippi a small town of about 20,000 people right along the mississippi river. >> good morning, kenny. >> morning time right back charles, how you doing? >> reporter: before the day is over, natchez transit driver kenny watson will have driven more than 300 country miles and picked up about 25 passengers. >> people look for that transit system like they look for the sun to come up. they know it's got to be there. >> reporter: there are small, door to door public services like this throughout rural america. they transport people who can't drive or don't have access to a car. around here that's about 10% of the population. >> this is my main source of transportation, and i thank the lord for it. till i get me a car, this is it. >> reporter: robert adams takes the bus every morning to his job as a customer service manager at the local walmart. >> we have a lot of people here
really, they can't do anything and they need that bus. they need to get to the doctor, they need to get to the store to buy food, buy clothing, however they're going to do it, they need that bus. >> reporter: a ride costs as little as $2. it comes when you call it. >> hello, would you please kindly send a transit bus to such and such address? okay. wait, 15 minutes, beep, beep! there it is! you on it, you gone. >> i do not have to tell you how important that transportation is in the community. >> reporter: sabrena bartely has been at the helm of natchez transit for nearly a decade. >> we want to expand services to under-served rural areas. >> reporter: she has been holding meetings to let people know that she recently got $4 million in stimulus dollars from washington to transform her call a ride service into a much larger regional mass transit system. with stagnating wages and rising energy costs, bartley says the need for affordable and reliable transportation in rural america
is growing. >> we've just got to have some transportation options in rural america just like we do in the big cities. >> reporter: you think big, don't you? >> yes, indeed. i am a visionary thinker. the first thing that is going to happen is that this building is going to come down, and we'll build a new facility from the ground up. >> reporter: the renovated building will cost $2.5 million. a centralized call center will coordinate busses rumbling through 13 rural counties. busses that for the first time will operate 24 hours a day and have set routes and time tables. but not everyone buys the idea. natchez car dealer carl rogel thinks people would be better off buying cars. >> and i just don't see the value in it. i think it's just an example, a microcosm of how although the stimulus may be a good idea the waste. this $4 million doesn't need to be spent on the bus system here. he says a bus system will never catch on out here in the country.
>> so not only are we spending the initial $4 million of the stimulus money, someone is going to have to support that system and that someone is going to be the tax payer. >> reporter: the editorial board at the "natchez democrat" is also skeptical. they did some math and warned that at about $20 a ride taxpayers may not be getting the most bang for their buck. >> this is one of those things about the stimulus money, we have got to dot every "i" and cross every "t." >> reporter: charles carr, is the director of transit services for the mississippi department of transportation. he helped secure the stimulus grant and says the new transit program will be subsidized, but no more than any other public system. i've seen some of the critics on the web say it's welfare on wheels essentially. how do you respond to that? >> well, we can't necessarily respond directly to that and wipe that opinion away because any form of subsidy in the minds
of certain people is always going to be interpreted as welfare mentality. but is that same welfare mentality that has supported amtrak for years? that supports the airlines? do most folks understand that highway construction is supported by subsidies? >> reporter: bartley thinks the money will come back into the community. the stimulus package will create 40 short term and 25 full time jobs. and perhaps attract others. if you're going to attract some industries, one of the things people want to know, well, how are my employees going to get to my job site? transportation is that link. and since low wage workers on average spend at least 40% of their income on car, gas and maintenance, she says they could save money taking the bus. peggy polk is a cook at a local diner. so, if you didn't have this service, what would you do? >> oh, my goodness. if i didn't have it what would i do?
i would probably have to get a used car, and probably have trouble with it, and end up not going to work half the time. because, you know how dependable used cars are. >> reporter: to make this new venture a success, natchez transit is counting on hundreds more people to choose to leave their cars behind and start taking busses. >> are we going to change that overnight? no, but how we change it by one person at a time providing excellent service and by someone deciding this is an option and i am going to try this option. >> reporter: for now carl rogel remains unconvinced. >> i think after we see this experiment, and that's what it really is is an experiment; we'll see a lot of waste, a lot of buses sitting around and a lot of expense. >> reporter: so far, this stimulus project has created five new jobs in natchez. for driver kenny watson, whose
part time employment just became full time, the investment is already paying off. >> brown: this week the newshour announced that miles o'brien, the reporter on that story, will join us as our science correspondent. and we're very happy to welcome him aboard. >> suarez: lawmakers continued their probe today of a drugmaking giant and the way it's handled recalls and manufacturing problems. "newshour" health correspondent betty ann bowser has the story. the health unit is a partnership with the robert wood johnson foundation. >> reporter: johnson and johnson has recalled over the counter medications for children and adults nine times in the last year for a range of problems. one of those recalls was the largest in history of children's non-prescription drugs. and in recent weeks, the company has acknowledged that it and a subsidiary pulled adult motrin from the shelves without publicly announcing a recall. today the company's top executives were called before the house oversight committee to explain committee chairman, new york
democrat edolphus towns: >> since then there have been documents that raise troubling questions both about the acuity of johnson and johnson's earlier testimony and the extent of the phantom recall. when johnson and johnson learned it had a problem with one of it's adult motrins in 2008 and 2009, the company hired contractors to go into the stores and buy the product off the shelves. without announcing a recall, so the public and the news media wouldn't know what was really happening. >> reporter: johnson & johnson's chief executive william weldon came to apologize, saying the company and its subsidiary mcneil healthcare made a serious mistake. >> i know that we let the public down. we did not maintain our high quality standards, and as a result, children do not have access to our important medicines.
i accept full accountability for the problems at mcneil, and i will take full accountability for fixing them. >> reporter: weldon also said he was not personally aware of the phantom recalls. colleen goggins is the outgoing head of mcneil's consumer division that produced the recalled products. ohio democrat dennis kucinich. >> now, ms. goggins, as the head of this consumer group, are you
trying to lead this committee to believe that you knew nothing about it? that apparently, from this memo, there was widespread discussion within your organization, about a phantom recall, about the cost of the recall, about not being able to get cooperation from the marketing people. you're at the top of this group and you knew nothing about it? really? i'm not talking about what's on please help us. >> i did not know at the time that i testified in may, i have since learned from looking at documents that there was a retrieval going on, i did not know that at the time of my >> reporter: the f.d.a. itself came in for serious criticism. ranking republican darrell issa is from california. >> regrettably, the pattern emerging at f.d.a. is one of carelessness, deficiencies and untruthfulness. >> reporter: f.d.a. deputy commissioner dr. joshua sharfstein acknowledged today they were aware of the repurchasing of motrin as early as april 2009, but didn't ask
the company to recall the motrin until july. dr. joshua sharfstein told the >> this communication did not dr. joshua sharfstein told the committee his agency did not initially know how contractors were hired to pose as regular >> reporter: but he said the f.d.a. should have pushed the company for a call. >> from this point, it took until july for fda to tell the company that a recall should be conducted. >> reporter: some members argue that congress needs to give the fda authority to mandate recalls but there is little prospect of that happening anytime soon.
>> brown: finally tonight, a safe haven for writers in danger. >> brown: you don't hear burmese too much in pittsburgh and certainly not burmese poetry. but on a recent night, the writer khet mar read a poem about seeking shelter in this city, after being persecuted in her native country. >> beneath the warmth of the sun, in the sanctuary of pittsburgh where i take refuge, life takes place amidst blooming flowers. >> brown: khet mar was one of several writers who performed at an annual jazz and poetry celebration for an organization known as city of asylum/ pittsburgh, which provides writers two years of free living here and a chance at a new life. >> i wrote some political poems with my friends and we distributed those poems in the crowd. that made me in jail.
>> brown: khet mar was a writer, teacher and social worker in burma in the late 1980s and 90s when university students, workers and monks first took to the streets to protest the country's repressive military regime. >> generals in my country don't want people to know the real situation. for example, they don't want people know we are poor and very bad conditions. >> brown: much of her writing told of the plight of poor villagers. in one instance, she wrote of an uncle who was forced to work in a labor camp because he couldn't pay a government tax. >> my uncle couldn't pay money. so he was working in the very hot weather. and he died. >> brown: so you wrote a story about this and that becomes a political issue. >> yes, i think i'm writing social issues, but in burma,
social issues are political issues. >> brown: because of her work and writing, khet mar spent a year in prison and faced regular censorship. when fellow writers were jailed during the 2007 saffron revolution, she sought help from human rights organizations, which work with the pittsburgh asylum program. she moved here with her family 18 months ago. in addition to rent-free housing, she's provided with a $30,000 annual stipend and health insurance. it's not amnesty in the legal sense, but for khet mar it's given her safety and freedom she didn't have in burma. her artist husband, than htay maung, captured that in a mural he painted on their home-- life in burma on one side, in pittsburgh on the other. >> we welcome them to a safe place to do what they need to do unencumbered. >> brown: next door to khet mar is the home of businessman henry reese.
13 years ago, he heard about the european-based city of asylum program and decided to start a pittsburgh branch. he used town houses he already owned on his block and raised money from foundations and local donors. >> this was a way that a small community could actually stand up and protect something that we all feel is important. bring that person into our community and maintain that dialogue within our community in both directions. we learn from the writers and benefit from it every bit as much as i would say initially they benefited from us by being protected. >> brown: the first writer in the program, six years ago, was chinese poet huang xiang. now living in new york city, he's still warmly greeted by old neighbors when he returns for a visit. as a young man in china, he spoke out against the cultural revolution in the 1960s and then participated in anti- government protests in the 1980s.
>> as a writer in china, my life was always underground. i produced thousands of works, but none of them were published. >> brown: not only were you not able to be published but you also went to prison for your writing? >> ( translated ): that's right. if i wrote, i had to pay the price. i was jailed six times in total because i wanted to write. >> brown: he came to the united states in 1997 and was granted political asylum, as shown in the documentary "well founded fear." >> the service is recommending your case be approved. so congratulations. >> brown: xiang got the legal status, but didn't have a place to live or a way to support himself until he found the pittsburgh program. here he got his poems published continued to work as a calligrapher, even painting several poems on the exterior of the house where he lived. and became a popular performance artist, reciting for us a poem called "writing in 3-d" which
begins: "the oldest way to write poetry is with a brush. the newest way to write poetry is with the body." xiang says he feels he's been given a new life in the united states. >> ( translated ): coming to pittsburgh, i found freedom to do what i want to do. from here, i made my first step into my spiritual and creative productivity. >> brown: one door away lives salvadoran writer horacio castellanos moya, another who's found a new life through the pittsburgh program. beginning in the late 1970s in el salvador through that country's violent civil war and uncertain aftermath, moya's work as a journalist and novelist put him in danger. his 1997 novel "revulsion"-- a satirical take on post-civil war politics-- led to death threats. >> i didn't say anything new. but it was the tone. >> brown: tone? >> yes. being sarcastic, being ironic.
not the information in it. so literature can still bother. >> brown: in the years that followed, castellanos moya moved from country to country, eventually settling here in 2006. three of his novels have been translated into english, all his work continues to be about life in central america. >> brown: why do you still, even now in pittsburgh, you're not going to write a pittsburgh novel? >> well, it has to do with the process of how i get these stories i write. it's different if a writer is looking outside and around for stories to write. i belong to another kind of writer and this is a writer motivated by something that is inside. memories. some things that were very heavy in some period of your life.
that's the reason: i have some kind of wounds. >> brown: wounds? >> and those wounds are there. and if i don't get rid of that, the wound will be open. >> brown: castellanos moya says he hopes to stay in pittsburgh and write. the burmese poet khet mar is less sure about the future, even if she knows she can't return home right now. >> i want to go back because i think there are more-- i don't know how to say-- responsibilities for me in burma. here i can just write. but if i was in burma i could help people, as i was doing before. >> brown: even though it's dangerous. >> yes. but i don't want to go to prison again. that's why i'm here. >> brown: for his part, henry reese intends to keep the program going. and, with help from fundraisers like this, expand it. he's hoping to open a small
bookstore and performance space just around the corner from the narrow alley that will continue to offer shelter to writers in need. >> suarez: again, the major developments of the day: the u.s. treasury and the bailed-out insurance giant, a.i.g., announced a deal for the company to pay back the bulk of its massive federal bailout. it was widely reported that white house chief of staff rahm emanuel will step down tomorrow, to run for mayor of chicago. on the "newshour", house speaker nancy pelosi insisted democrats will hold on to the house in the mid-term elections, because they're fighting for the middle class. and pakistan cut off a key supply route for u.s. and nato forces in afghanistan, after a disputed nato attack along the border. >> suarez: and to hari sreenivasan, in our newsroom, for what's on the "newshour" online. hari? >> sreenivasan: we have more on the authors given asylum in pittsburgh. you can watch videos of them reading their work. see political editor david chalian's interview with texas senator john cornyn.
as chair of the senate republican campaign committee, cornyn says that if the g.o.p. takes control in november, they'll move quickly to repeal the health care and financial reform laws. plus on "art beat," jeff talks with bestselling author jonathan franzen about his latest book, "freedom." all that and more is on our web site, newshour.pbs.org. jeff? >> brown: and that's the "newshour" for tonight. i'm jeffrey brown. >> suarez: and i'm ray suarez. we'll see you on-line and again here tomorrow evening with mark shields and michael gerson sitting in for david brooks, among others. thank you and good night. major funding for the pbs newshour has been provided by: