BILL MOYERS: Welcome to the Journal.

No sooner did Barack Obama get to Washington this week than he sounded an economic call to arms. 'We've got trouble', he said, 'trouble. If we don't take dramatic action fast, the recession could last for years and unemployment would continue to skyrocket'. 'Already', he said, 'nearly two million jobs have been lost. This is a perilous moment'.

PRESIDENT-ELECT BARACK OBAMA: Many businesses cannot borrow or make payroll. Many families cannot pay their bills or their mortgage. Many workers are watching their life savings disappear. And many, many Americans are both anxious and uncertain of what the future will hold.

BILL MOYERS: He wasn't all doom and gloom. The president-elect said recovery wouldn't come easily but it will come if we don't just ask, "what's good for me" but "what's good for the country my children will inherit?"

No one has more at stake in Obama's plan to pull us back from the brink than American labor, the working men and women hit so hard by the meltdown.

On Capitol Hill today, Obama's nominee for Labor Secretary, Representative Hilda Solis from Southern California, herself the daughter of a union household, and a strong labor advocate told congress that the needs of American workers will be front and center.

CONGRESSWOMAN HILDA SOLIS: Now more than ever, we must work together to insure that all Americans have the same opportunities that I had. Unfortunately, increasing numbers of middle class families, retirees, and youth in America are losing their jobs, their homes, and their retirement savings.

The Labor Department must insure that American workers are paid what they deserve, are treated fairly and have safe and healthy workplaces. We can accomplish this through enforcement, transparency, cooperation, and balance.

BILL MOYERS: America's unions have bet on the Obama administration being able to pull off a recovery that will revive not only the economy but the entire organized labor movement. And here to talk about labor's hopes and fears is Leo Gerard the International President of the United Steelworkers, the largest industrial union in North America. They're the dominant union in paper, forestry products, steel, aluminum, tires and rubber, glass, chemicals and petroleum. Whew! Born in Canada, the son of a union miner, Gerard has revitalized the steelworkers and brought hundreds of thousands of new members into the union. Welcome to the Journal.

LEO GERARD: My pleasure. Great to be here with you, Bill.

BILL MOYERS: So we have a new president, a new administration, and a new secretary of labor. And I know you have been excited by Obama's nomination of Congresswoman Solis. Why the enthusiasm for her in particular?

LEO GERARD: I think from my point of view, I can relate to her because I grew up like she did. I grew up in a in a union household where my dad made very little money. And when he needed the drill bits for the mine or he needed what they called oilers, which is the rubber-wear you work they took it off his paycheck. Congresswoman Solis grew up in a union family. Her parents were immigrants, didn't make a lot of money. So my personal thing is that

BILL MOYERS: She's one of you.

LEO GERARD: Well, not necessarily just one of me. But she can feel what I feel. So and that way there's a there's a relation there. But through her career she hasn't been an extremist on either side. She's been for working people. She's been for good jobs. She's been for good pay. She's been for opening the green jobs. She's been for making sure that workers are going to get trained and get an opportunity to get into the good jobs. So all of the things that she's fought for are the things that ordinary Americans would be supporting.

BILL MOYERS: What does it say to you that Obama names Congresswoman Solis, a real advocate of labor, and then he appoints as his nominates for his trade representative the former mayor of Dallas, who was a lobbyist for many of the companies that benefit from NAFTA? Seems to me that he has put two contradictory personalities and philosophies next to each other.

LEO GERARD: To be a bit facetious, I think he made one good decision and one bad decision. But it I think it goes to what he's always told us. He wants counter-views. He wants to be able to see people debate in front of him. Then he'll make the choice.

BILL MOYERS: And you're not worried about this

LEO GERARD: Absolutely I'm worried about that.

BILL MOYERS: You are worried.

LEO GERARD: I am worried about that. I think that there is no way that the current global agenda of America can be sustained for America. It's simple as that. And we've got to find a way to move into the kind of trade that brings in balanced trade. I've been panicked almost, to tell you the truth. And some people are tired of hearing my mouth run about it. We're accumulating now roughly $700 billion to $800 billion a year of trade deficit. And if you continue on the same curve during President Obama's first term, we'll hit a trillion dollar a year trade deficit. How do you sustain an economy like that? The accumulated trade debt that America has is in excess of $5 trillion. The interest on that debt or the asset sales that we have to make to protect that debt are almost $600 billion a year. Do you know what we could do with $600 billion? We could have national healthcare. We could make sure every kid that wanted to go to college could afford to go to college. So we've got to start reducing that. It took us 25 years to get there. It's going to take us a long time to get back. But that means we got to change direction.

BILL MOYERS: So Secretary of Labor Solis has called you in soon after she's taken the oath of office and says, "What do you want me to do on day one?" What's your answer?

LEO GERARD: On day one I think I want her to be a loud and strong voice for the right to workers to organize, protect collective bargaining and start to be a voice for moving toward the balanced trade agenda to I mean, there are so many things to do. We've got 25 years of this ideology that says don't interfere in the free market. And people never understood there is no such thing as a free market. All markets are regulated. If you took that and you put it out on the street, I'm sure that if I had a big, big powerful vehicle I could plow through New York without stoplights. But we put stoplights in so that the big trucks don't run over the small trucks, you know? And so we need to go back to the kind of meaningful regulation of the workplace, of collective bargaining, you know, and that to me is her big task. And she has to be. And so does President Obama. We can't let him off the hook.

BILL MOYERS: How do you want to hold him accountable?

LEO GERARD: I want to hold him to his values.

BILL MOYERS: What do you mean?

LEO GERARD: His values are to bring about change of direction. He knows what it was like for steel workers to lose their job when he went to work in the south side of Chicago. He knows the value of collective bargaining to bring some equity to the society, to raise the middle class. And so if we can hold him to his values, I don't expect him to change the world at once. He's inheriting a bigger problem than I believe even FDR did.

BILL MOYERS: He said yesterday in that speech on the economy and jobs that it we it's getting to be too late to save the economy. That's a pretty dire premise.

LEO GERARD: Well, look it, I'm almost sorry to be able to say this to you. But a week ago I got up for the first time in my adult lifetime and I said to my wife, I said, I don't know if we can save this thing.

BILL MOYERS: What do you mean?

LEO GERARD: There's so many problems. And the other side is so resentful of any change that President Obama and his team have to be strong. And they can't let themselves get pushed off their agenda. If they do, if he compromises too much, the economy won't recover quick enough. And we're going to continue to spiral down. We now got a whole generation of people that may not be able to afford to send their kids to college. One of my best friends in our in our building…

BILL MOYERS: In Pittsburgh?

LEO GERARD: In our building in Pittsburgh, he went to college and came out of college owing no money by working in a mill during the summertime. Now if he got his son to work in the mill in the summertime and his son graduated, he'd still owe $50,000. That's twice my first mortgage, you know? So that the time to act is now. It has to be bold. It has to be job creating. It has to be focused on putting America back to work. And we need it to be done.

BILL MOYERS: I know that one of the top priorities of the labor movement is passage of the Employee Free Choice Act. Help me understand exactly how that act would work.

LEO GERARD: Well, if a worker wanted to join a union, they simply would contact the union of their choice. Or sometimes union is contacting people in their sector, in their industry. And if a majority of the workers wanted to join the union, they would sign a petition or sign cards, whatever the process would be. And then at before, during, or after that process, they would indicate whether they wanted the final determination to be made in a vote or whether they want us to do it by the card check.

BILL MOYERS: What do you mean "card check"?

LEO GERARD: It's pretty simple. That a worker signs their name and says they want to belong to a union. And then those signatures are matched against their signatures. And if a majority of them have signed that out of 100, if 51 signed, then you get a union.

BILL MOYERS: Now, the opponents of the Employee Free Choice Act say that's exactly the problem, that it strips workers of their ability to vote in private, the secret ballot, which, of course, as you know opponents say is the is the heart of the democratic process.

LEO GERARD: In America, there's this myth about the way voting takes place in a workplace.

LEO GERARD: It's not a secret ballot when the only way that you can get to the vote is by the boss being able to call you in and sit you down alone and saying, "By the way, if the union comes in, you could lose your job. By the way, I hear you're the organizer for the union. You're done. Get out of here." And you do all that stuff in a power structure where the boss is over you, is that vote really secret then when you go in and you got all that piled on top of you? When we talk about intimidation, we ought to be talking about the intimidation that's taking place now. There's polls that are done that if workers were allowed to choose freely to join the union, almost 60 percent of them would today join the union. The reason the opposition is so great is because it - what we see by the lack of unionization is workers haven't been able to get their share of the wealth that they've been creating in our society.

BILL MOYERS: But if I put my name on a card that openly says where anybody can see it I don't want to have a union, I don't want to join a union, doesn't that mean that the union chiefs can come in and make life difficult for me?

LEO GERARD: Look it, we don't do that. I mean, the fact of the matter is that you go into a workplace. Usually it's worker talking to worker. This fallacy that union bosses I don't go around signing people into the union. We go in and give them the information. We talk to them. Workers organize workers. Workers get together and they decide they want a union. That's who organizes the union most of the time. The organizer is the facilitator. And our job is to create the environment where they have the facts and they have the knowledge. And they make an honest decision that they want a union. And once that's been done, what is a greater vote than putting my name on a card? Signing my name and saying I want this union?

BILL MOYERS: I brought a couple of ads that have been running by opponents of the Employee Free Choice Act. Take a look.

FIRST ADVERTISEMENT NARRATOR: Unions want to take away the rights of workers to cast a secret ballot in union organizing elections, so their spending is staggering. What the union bosses want is so un-American they have to spend big. They're showering money on politicians.

SECOND ADVERTISEMENT NARRATOR: Today when workers vote on whether to have a union at their workplace, they use a secret ballot. But a new law could change all that.

MOB GUY: How ya doing? Hey, whatcha got there?

WORKER: My secret ballot.

MOB GUY: Oh no it ain't.

NARRATOR: Under a card-check law, workers would just sign a card, and everybody would know how they voted.

BILL MOYERS: What's your take on that?

LEO GERARD: Well, the first ad is interesting because really what they don't tell us is what's in that Brink truck is bosses' salaries. And it is about the money. It's about them and having had all the money and workers having a declining standard of living. It's not about the kind of money that we put into the election campaign. The election campaign was not just about Employee Free Choice. The economy's going down the tank. America's losing its standing in the world. We represent the voices of ordinary people. And in this year's election the aspirations of, quote, "unionized" workers and non-unionized workers, were the very same. We want an economy that works. We want an economy that's fair. We want an economy that deals with equity. And, in fact, the best way to have a stake in the wealth of the country is through a bargain, through collective bargaining. It's the best vehicle that's ever been invented. Almost every country in the world has a higher rate of unionization than America. And 70 countries in the world, you can join the union by what would be the equivalent of card check. The second one is just really it's stunning about the myth that they create. And it's the way that the-

BILL MOYERS: The second ad? You know, that's the guy from "The Sopranos".

LEO GERARD: Yeah, he ought to be ashamed of himself. He made a ton of money getting union rate for the job he did. But the fact of the matter is that kind of myth is the myth that's created by the union busters. I grew up in a union family. I never… those guys make me sick, that live in that kind of world. And the reality is that that's not how unions organize. I would that flip that the reverse. Those are the kind of guys that come into the workplace now and call the worker into the room and say, "You know, buddy, if you join this union, we're going to move this plant to Mexico. Now go out and decide to vote." What are you going to do when your family and you're making $9 an hour, $10 an hour, and the boss is taking home $10 million? What are you going to do with your so-called secret ballot vote?

BILL MOYERS: What do you think the makers of that ad and the sponsors of that ad - what is it they're appealing to that's a strain in American life? What is that they hope that people respond to when they see that ad?

LEO GERARD: Oh, I think that there's an appeal to fear. It's the same kind of mentality that told us we couldn't have a clean environment and good jobs. It's the same kind of mentality that called Barack Obama a Socialist because he was talking about equity. It's the kind of econ- it's the kind of mentality that tries to divide the country and keep people afraid of their future. It's based on lies and propaganda. And it's really put together by the already rich and already very powerful who control the workplaces, who have control of the economy. And what we've seen is since the Reagan years we've seen a decline in the standard of living of ordinary working folks. We've seen a huge division in social equity. We're now the gap between the rich and the rest of us is the largest it's been since the Great Depression. There was a reason that FDR gave us the right to organize and the right to join unions because he believed that collective bargaining was the way for us to sit down with our employer and say how can we have a more productive workplace? How can we be able to benefit from our work? And we want a profitable company. We want to bargain with profitable, productive employers so that we have good secure jobs. And all we want to do is sit down and negotiate.

BILL MOYERS: But the irony to me is that in this period of time that we're talking about, the globalization has occurred so that capital goes looking for the cheapest labor it can find. So even if you had the card system over these years, wouldn't capital still have gone to where it can hire the lowest paid worker? Isn't that an economic phenomenon, not a political consequence?

LEO GERARD: No, I think it's a political phenomenon as well as an economic phenomenon. It's a political environment that's created in America the ability of jobs to move offshore. If you go to Germany and you want to move a job offshore, there's a huge economic price.

Everything that you put in from the management or excuse me from the government, all the training assistance and all that infrastructure, you got to put back into the social pot. Here we encourage them. We give them a tax break here to go overseas. And I'm proud of Barack Obama to say he's going to put an end to that. And these Toyota Republicans that we-

BILL MOYERS: Toyota Republicans?

LEO GERARD: The Toyota Republicans that were prepared to destroy the American auto industry the couple of weeks after they were blind and deaf and dumb to giving away $700 billion that never did what it was supposed to do. They just gave them taxpayer dollars. And you know what? It didn't do a damn thing. Hasn't helped one worker get back to work.

BILL MOYERS: But they then turned around, as you wrote recently, and opposed the bailout of the big three in Detroit.

LEO GERARD: Yeah, those Republicans were prepared to bail out the people that showered before they went to work. But they didn't give a damn about the people who had to shower after work.

BILL MOYERS: Let me read you what one Republican senator said during the discussion of the auto industry bailout. This is Jim DeMint of South Carolina telling Fox News, quote, "The take-home pay [of auto workers] is essentially the same. But gold-plated benefits that the unions have negotiated over the years have essentially brought the big three to the brink of bankruptcy. And they will freely admit that the American auto companies that are producing overseas are very competitive because they don't have to operate under the union agenda."

LEO GERARD: I think that Senator DeMint is delusional or being deliberately dishonest.

BILL MOYERS: How so?

LEO GERARD: Or absolutely uninformed. The difference is very simple on that issue. Most of the transplants have been here less than 30 years. I think in total they might have 300 retirees.

BILL MOYERS: The transplants being?

LEO GERARD: The Hyundais and Toyotas and the-

BILL MOYERS: The foreign company.

LEO GERARD: The foreign car companies that came into America in the last 30 years.

BILL MOYERS: Mainly in the South, right? Alabama, South Carolina.

LEO GERARD: Mainly in the South. Mainly given huge, huge amounts of taxpayer dollars to get there, in the billions of taxpayer dollars.

BILL MOYERS: By the states giving them subsidies to come there, right?

LEO GERARD: By the states who gave them subsidies. And lots of those subsidies were the flow of federal dollars. Then you end up and you say, okay, the auto industry and the American auto industry, the big three, have over a million retirees that they provide healthcare to. A million. They have pension funds. No one, no one that retires from the auto industry gets rich. They have a decent pension so that they can keep their home, that they can have a bit of comfort in their sort of autumn days. And these Toyota Republicans would want to see that taken away. The fact of the matter is that if we had universal healthcare in America, like most of the rest of the industrialized world, most of the rest of the world, that would not be the burden that's put on the auto industry. People miss the huge burden on North American manufacturing in the way we provide healthcare in America. It's a huge competitive disadvantage. I don't blame General Motors for being decent enough to work with the union to provide healthcare to those retirees. If you ever worked on an assembly line for 25, 30, 40, 45 years or in a steel mill you're tired when you're at 60 years of age and 65 years of age. And when you retire, you ought to have some healthcare.

BILL MOYERS: Is that why you are an advocate of universal healthcare, to take the burden off of companies?

LEO GERARD: I'm an advocate of universal healthcare for a number of reasons. Taking the burden off of employee employers and taking it out of the collective bargaining system is one. But also I think it's the right thing to do as a human being. It's the right thing to do as a civil society. It's the right thing to do as a society that wants to I forget who said the comment. But we ought to be judged by what we do for the weakest among us.

BILL MOYERS: I know that you would like to see the Obama administration start to rebuild our manufacturing base. But what gives you hope that we can resurrect the manufacturing base in this country?

LEO GERARD: I think that we have to go back to a dialogue. And I met with some CEOs yesterday to talk to them about whether they want to get in that fight. We'd have to go back to a dialogue in America that understands that the way you really create wealth in America is by making things that people want to buy, not by creating asset bubbles and credit crunches and that kind of stuff, which has been our experience for the last 40 years.

BILL MOYERS: What do you think America can manufacture now that consumers want and that the world wants?

LEO GERARD: I think we can manufacture cars. And I think that if we had the right focus and we took the healthcare burden off not just the auto industry, all industry in America, the way the rest of the world does, that would increase our global competitiveness. I think if we enforced our trade laws so that, and by the way, when we compete with China, most the time we're competing against the government, not against the country. So we need to enforce our trade laws. And we need to look at green jobs. We need to look at solar energy. We need to look at fixing our energy grid. We need to retrofit our public buildings. We've got kids that are going into buildings that are using air handling systems from the '40s and '30s. We need to retrofit our courthouses and our city halls. We need to fix the glass in our buildings so that they're energy efficient. And we need to do that using American workers and American products.

BILL MOYERS: I happen to know that way back in 1990 you were the first labor leader that I can remember who was advocating moving to a green economy, advocating environmentally friendly business and products. But the question that's come up over the years is suppose we do develop green jobs. What's to keep them from being sent abroad to low-wage workers the same way auto jobs have been sent abroad?

LEO GERARD: I think what we need to do is fix our legislative process so that it's designed to not export our jobs the way other countries do. If having trade-

BILL MOYERS: Your opponents will say that's protectionism and-

LEO GERARD: It's not Protectionism. It's creating an environment where it's healthier to keep your jobs at home. And by the way, what's - how why does protectionism become a bad word? Why does creating jobs at home become a bad thing? You know what? Try to do this in France. President Sarkozy said immediately we're going to help our auto industry in France. But the French taxpayers' dollars are going to be spent in France. What's wrong with that? Try to do this in Japan. I was at a meeting with the head of the Chinese steel industry, where one of the American steel company CEOs said, "What do you think if we were to buy into part of the Chinese steel industry?" She said, "No, no, no." She said, "No, no, no. Steel is too important to China." In America today 52 percent of our steel is foreign owned.

BILL MOYERS: Where did you come to this sense of economic justice? It runs all through your speeches.

LEO GERARD: The way I grew up. Growing up in my hometown, it's where I became an environmentalist. When I grew up in my hometown it was the pollution capital of North America.

BILL MOYERS: Where is that?

LEO GERARD: Sudbury, Ontario, Canada. And there were days where I ran track. I was 17 years old before I understood you could actually run without sucking in sulfur in the air. I grew up three miles from a smelter. And I didn't know any better And when I became an adult I said to myself it doesn't have to be this way. And for all my years growing up, the mining company would say, well, you got to have a choice between these good jobs and a little bit of pollution. The reality is we didn't have to have a choice. We either are going to have both a clean environment, or good jobs, in the long run, we'll have neither.

BILL MOYERS: So with this kind of background and this kind of conviction and also being a fairly realistic political man, what realistically do you expect soon from Obama?

LEO GERARD: First thing I expect him to stand up and make this bold economic renewal step that is going to have a combination of putting manufacturing back to the top of the heap. Understand you got to put workers back to work, dealing with the environment by retrofitting buildings, fixing the energy grid, looking at mass transit. Those aren't all going to be instant fixes. But they're going to be the kinds of investments that return America and American companies to being the most productive and competitive in the world.

I want President Obama to stick to what he said, that this is the final verdict on a failed philosophy where if you reward everybody at the top, it'll trickle down on the rest of us. He was right then. He's right today. He'll be right two years from now. And if he sticks to those values and develops an economic and social agenda that expresses his values, we'll become well again.

BILL MOYERS: Come back in a few months and tell me how you think he's doing, all right?

LEO GERARD: I'll be glad to do it.

BILL MOYERS: Thank you very much, Leo, for being-

LEO GERARD: My pleasure.

BILL MOYERS: Thank you.

LEO GERARD: Thank you.

BILL MOYERS: The members of the new Congress now in Washington face a daunting challenge just to count all the zeroes after the dollar signs. A trillion dollars is a thousand billion dollars. And that's how much Washington says our government will be spending, beyond its means, for Barack Obama's economic stimulus program. So the corridors of Capitol Hill are filled with happy faces, because it's a lot more fun to spend billions than it is to pinch pennies.

Now, you may be concerned that so much spending invites a feast for the ogres of waste, fraud, and abuse. But on Tuesday, President-elect Obama promised a higher standard of accountability, transparency and oversight than we're used to getting at either end of Pennsylvania Avenue.

BARACK OBAMA: We are going to bring a long-overdue sense of responsibility and accountability to Washington. We are going to stop talking about government reform and we're actually going to start executing. We're not having earmarks in the recovery package. Period.

BILL MOYERS: No earmarks will be allowed and if you thought you hadn't heard him correctly, he repeated it in his big speech on Thursday. None of those hidden pet projects with multi-million dollar price tags that individual members of Congress sneak into bills for special interests or campaign contributors. Can it be true? Have we really crossed the bridge to nowhere for the last time?

Don't hold your breath. As a senator, Barack Obama himself was no slouch when it came to passing out earmarks. And many of the people in his incoming administration are accomplished practitioners. Take former Republican Congressman Ray LaHood, Obama's nominee to head the Department of Transportation. Last year, he helped steer $62.7 million dollars in earmarks to his Illinois district.

Members of Congress all together added almost 13,000 earmarks to legislation totaling more than 18 billion dollars in additional spending. That may surprise you, especially if you remember we were promised reform once before after the Democrats took over Congress in 2006. But never underestimate the ingenuity of legislators to throw the watchdogs off the scent.

We offer yet another case study of Houdini-like hijinks on Capitol Hill, from our colleagues at Expose. They revisit a crack investigative team from the "Seattle Times", whose award-winning journalism has revealed to the public the connection between campaign contributions and wasteful congressional earmarks. The producer is Marc Shaffer; the narrator, Sylvia Chase.

HARRY REID: America is so fortunate to have as the next Speaker of the House of Representatives Nancy Pelosi.

SYLVIA CHASE: Election night 2006, and change was in the air.

NANCY PELOSI: Today the American people voted for change and they voted for Democrats to take our country in a new direction.

SYLVIA CHASE: The Democrats were going to clean house, they promised.

NANCY PELOSI: And the Democrats intend to lead the most honest, most open, and most ethical Congress in history.

SYLVIA CHASE: For the first time, lawmakers would post the details of each congressional earmark, its sponsors and value. And they would be required to submit a letter for each of these pet spending projects — complete with its purpose, and the exact name and address of the beneficiary. In the letters, lawmakers would also certify that neither they nor their spouses had a financial interest in the project.

Across the country, in Seattle, one journalist was paying especially close attention.

DAVID HEATH: I thought now that we have reforms I'll be able to tell the whole story on the relationship between money and earmarks.

SYLVIA CHASE: "Seattle Times" investigative reporter David Heath turned his sights to the 2008 Defense Bill — the first passed under earmark reform. Just to be sure Congress was telling the whole truth, Heath cross-checked Congress's official list of earmarks against those he was able to verify on his own. And he made a disturbing discovery.

DAVID HEATH: Despite the reform, Congress is still hiding earmarks.

JIM NEFF: So it became a much better story. It wasn't about a corrupting process. It wasn't about wasteful earmarks that were local pork and local pet projects. It was beyond that; it was actually all of that plus, active deception and hypocrisy.

SYLVIA CHASE: Joined by his colleague Christine Willmsen, David Heath spent months following the money, painstakingly reviewing each disclosure letter, beginning with those from the House of Representatives.

DAVID HEATH: There was well over a thousand of these letters and we took these letters and we basically made a database out of them.

SYLVIA CHASE: Under the new rules, members must disclose the exact recipients of their earmarks — reporting only the federal entities through which the dollars get disbursed is not allowed.

DAVID HEATH: For people who obey the rules, the disclosure in the House is pretty good.

SYLVIA CHASE: But not everyone obeys the rules.

DAVID HEATH: We found over a hundred cases where a member of the House wasn't really honest. They said the entity getting the funding was the Department of Defense. Or the Office Naval Research, which doesn't really tell us anything. What we want to know is who's actually getting the money in the end. And this money is almost always going to a contractor, a vendor, a company.

SYLVIA CHASE: Without knowing who's actually "getting the money in the end", there's no way to track whether lawmakers are getting campaign contributions from the same people to whom they're funneling earmark dollars. The money trail goes cold.

The disclosure letters in the House may have been imperfect, but they proved far more informative than those the reporters found in the Senate.

When Heath and Willmsen checked, each senator's disclosure letter said virtually the same thing.

DAVID HEATH: All it says is that for all the earmarks I've done I promise you there's no conflicts of interest. That's all it says.

SYLVIA CHASE: How the Senate managed to hide the details of its earmarks while publicly proclaiming reform is a story of masterful parliamentary slight-of-hand. Watch closely — or you'll miss it.

As soon as he took over, new Senate Majority Leader Harry Reid pledged to come clean on earmarks as part of a massive new ethics bill.

HARRY REID: The underlying legislation that is bipartisan in nature, sponsored by the Democratic and Republican leaders, is good legislation. It is a significant step forward to anything that has happened in this country since Watergate: ethics reform, lobbying reform, earmark reform.

SYLVIA CHASE: But what Senator Reid wasn't saying was that the reform measure contained a caveat. Senators wouldn't have to disclose any earmarks that went to federal entities.

But in the Defense Bill, almost all the earmarks first go to federal entities before being passed along to private contractors. In effect, senators would be able to hide almost every earmark. And that prompted a challenge from Senator Jim DeMint — a champion of earmark transparency. The South Carolina Republican made a startling admission.

JIM DEMINT: Many in this Chamber know I don't often agree with Speaker Pelosi, but Speaker Pelosi has the right idea.

SYLVIA CHASE: And a stunning proposal. As an amendment to the Ethics Bill, the staunchly conservative Republican DeMint proposed that the Senate adopt word-for-word the House version of earmark reform marshaled through by the liberal Democrat Nancy Pelosi

JIM DEMINT: We proposed the DeMint-Pelosi Amendment. And I presented it on the floor. And the place was quiet.

JIM DEMINT: This is the language which the new Speaker of the House, Nancy Pelosi, has put in this lobbying reform bill in order to make it more honest and transparent.

SYLVIA CHASE: It was a brilliant tactical move. If the Democratic majority was to reject DeMint's amendment it would mean rejecting the much stronger earmark disclosure rules crafted under their own party's high profile Speaker of the House.

JIM DEMINT: Harry Reid did not want this to come for a vote. He made a motion to table it, which gives the members some cover because you're not really voting against the amendment. You're just voting to table it.

SYLVIA CHASE: "Tabling" the so-called DeMint-Pelosi Amendment would mean removing it from consideration — effectively, killing it.

HARRY REID: I would appeal to my friend from South Carolina. I repeat: I know you are doing this because you think it is the right thing to do. But take the opportunity to look at what is here. It is better than the House version - so much better.

JIM DEMINT: And Senator Reid assumed as most people did including me that he would get fifty-one votes to table it. And we had a few heroes on the Democrat side that joined us, Barack Obama, relatively new senator, bucked his party and voted with us.

SENATE PRESIDING OFFICER: On this vote the ayes are 46, the nays are 51. The motion to table is not agreed to.

JIM DEMINT: And we defeated the tabling motion. Well once the tabling motion failed by a vote or two, everyone knew they were going to have to vote on the real thing and it was like 98 to nothing. I mean this is the kind of thing that if, if senators know America can see what they're voting on, they were afraid not to vote for it.

SYLVIA CHASE: Indeed, with all eyes watching — 98 senators voted in favor of the artfully crafted DeMint-Pelosi Amendment; not one opposed it.

The junior senator from South Carolina had taken on the powerful Senate Majority Leader and won. Or so it appeared. Remember: this was an amendment to a wide-ranging ethics bill. And before a bill becomes a law, its final language must be worked out between both houses of Congress. Steve Ellis, a leading earmark reform advocate in Washington, explains how the game works.

STEVE ELLIS: So rather than doing what the House did which was simply change their rules. You're done the next day. Everything is changed and you have to abide by earmark reform, people could still modify it before it actually ended up becoming the rules of the Senate.

SYLVIA CHASE: Which is precisely what happened.

HARRY REID: Frankly, as we all know, we're going to have to do some work to improve this.

SYLVIA CHASE: Behind the scenes as the final language to the Ethics Bill was being hammered out, a mysterious new provision was slipped in.

There is it — paragraph 6, subparagraph A 5. Senators would submit letters to committee chairpersons containing all the earmark information. But they would tell the public only that they have no pecuniary — meaning financial — conflict in the projects they were sponsoring.

STEVE ELLIS: They essentially said that the public can only get this last little thing which says I'm not a crook.

SYLVIA CHASE: As for who's actually getting the earmark money, that remains a Senate secret.

STEVE ELLIS: The Senate leadership that was behind gutting this bill were really evil geniuses. This is a provision where I looked specifically at it as soon as it came out. Other people in Washington who work on earmark reform looked specifically at this provision to make sure that we were going to get the information that we were promised and we missed it.

JIM DEMINT: And they did exactly what I was afraid of - they killed earmark reform, it is a stunning disappointment and a huge missed opportunity. Once they got the loophole created behind the scenes they figured that no one was going to pay attention.

SYLVIA CHASE: But someone did pay attention. After months of work, David Heath and Christine Willmsen had tracked down every hidden earmark they could find in the 2008 Defense Bill. There were 155 of them.

DAVID HEATH: And those hidden earmarks were worth three and a half billion dollars. So that was forty percent of the earmark money in the Defense Bill.

SYLVIA CHASE: Among those Congress failed to reveal, according to David Heath, 588 million dollars to accelerate the construction of a submarine the Defense Department hadn't even asked for in its appropriations request — the largest earmark in the entire bill.

The reporters tracked the earmark to the giant defense contractor General Dynamics. They also discovered that the Office of Management and Budget had opposed the earmark, saying it would take resources away from more urgent defense needs.

DAVID HEATH: 588 million dollars on a submarine the Pentagon did not want. And in fact that the administration said please take this out of the bill.

SYLVIA CHASE: Then there was the 18 million dollars for Latrobe Specialty Steel, courtesy of Democratic Congressman John Murtha — powerful chairman of the Defense Appropriations Subcommittee and one of Capitol Hill's leading ear markers. Latrobe, which sits in Congressman Murtha's Pennsylvania district, had made political donations to Murtha.

CHRISTINE WILLMSEN: There was a dotted line between Congress, who they received campaign contributions from and who got earmarks.

SYLVIA CHASE: When the reporters asked why the congressman hadn't disclosed the Latrobe Steel earmark, they were told through a Murtha spokesman that the measure was competitively bid. And according to the congressman, that meant it wasn't an earmark at all.

DAVID HEATH: They said oh that can't be an earmark because it says right in the bill that it's supposed to be competitively bid. Which by the way, all earmarks are supposed to be competitively bid. But, it turns out that in this particular case there wasn't a competitive bid because the company was the only company in America that could actually qualify for this earmark.

JIM NEFF: We found that Congress played word games almost something straight out of George Orwell. About what is, and is not an earmark, and if it looks like an earmark it, it acts like an earmark, an average person applying common sense would say it's an earmark, it's an earmark.

CHRISTINE WILLMSEN: I think we could have investigated for years to attempt to try and find all the earmarks that were hidden. It's just incredibly difficult to find them, and there's still mysterious ones out there today, that we can't track.

STEVE ELLIS: Congress are the ones who determine whether or not earmark disclosure has been met. They're essentially your ultimate "homer" referees that are deciding these games.

SYLVIA CHASE: That means, as the "Seattle Times" would report, even if lawmakers break the earmark rules — they face no punishment.

CHRISTINE WILLMSEN: Just don't disclose. Nothing's going to happen. Right? Nothing's happened so far. I mean, we've found people that haven't disclosed, and they're not necessarily facing discipline or getting investigated by the Ethics Committee.

DAVID HEATH: Joe Citizen can't figure out what's not being disclosed. I mean you have to go through the bill and analyze each and every line item to see whether or not it's been disclosed or not and that's just not something the average person can do.

BILL MOYERS: Hope, they say, springs eternal. So once again reform is in the air. Just Tuesday, the Chairmen of the House and Senate Appropriation Committees announced some rule changes to discourage earmark abuse, including a requirement that requests be publicly disclosed. And on Wednesday, a bi-partisan group of senators introduced new legislation to take earmark reform even further. Oklahoma's Republican Senator Tom Coburn said it's all about the public trust.

SENATOR TOM COBURN: This is an issue about confidence. We're in the deepest recession in fifty years. And the answer to getting out of a recession is competency and the confidence in the consumer that tomorrow is better, the day is brighter. And the problem is, as long as earmarks exist the way they do today, we're never going to have the confidence of the American people that we have their best interests at heart.

BILL MOYERS: We'll see. Fortunately we have some help. Two public interest groups, Taxpayers for Common Sense and the Sunlight Foundation, have joined forces to dig deep into the data bank to create Earmark Watch, a website that allows you and me to keep track of what our senators and representatives are up to. You can find out more about Earmark Watch at our site on PBS.org.

In a city made noisy by hammers and saws preparing for the inauguration of a new president — a city already reverberating with partisan rancor, and with the constant chattering of the opinionated — it was hard to hear the sound of a single snare drum along Pennsylvania Avenue, between the White House and Capitol Hill, but there it was: a mere handful of men and women, 70 at most, had come out this rain-swept morning to bear witness to the dead - to the victims of war.

DAVID SWANSON: They carry the names of the dead in Iraq, in Afghanistan and the recent dead in Gaza along with ages and places and in many cases, very little more is known except that these are people who should still be alive. These are real human beings with family members and loved ones and friends, and we're killing them.

BILL MOYERS: They were there for the first hour of the first day of the new Congress.

DAVID SWANSON: It's a general assumption that power rests at the other end of this street in the White House and that we may have a better president there than we had last time and we should wait and see what happens. Well, our country puts the power to begin and end and fund and de-fund wars here, in the Congress.

BILL MOYERS: A short distance away a noisy media circus surrounded Illinois Democrat Roland Burris as he tried to take a seat in the United States Senate, while scarcely anyone recorded the March of the Dead.

MARCHER #1: Haya Hamdan, 44, killed last Monday in Gaza.

MARCHER #2: Najim Abdullah Hamid, 41, killed 3/7/04.

BILL MOYERS: Inside the Hart Senate Office Building the marchers unfurled their banners. Seventeen were arrested.

MARCHER #3: We will not be silent.

DAVID SWANSON: And I'm thrilled that people are willing to bring this message on day one and not assume that an election solves everything because elections have never created peace, only what people do in between elections has ever created peace.

BILL MOYERS: Their act of conscience could not have been more timely. For one thing, the "Washington Post" reports this week that the U.S. Army sent letters to the 7,000 family members of soldiers killed in Iraq and Afghanistan. Every letter began, "Dear John Doe." Yes, it was a mistake and the Army has now apologized. But we were reminded of the anonymity that has been conferred on America's fallen warriors whose homecoming in caskets the Bush White House has tried to keep from the public. They, their parents, spouses and children are far removed from the gaze of official Washington. The marchers along Pennsylvania Avenue this week were reminding us that every casualty, every victim of war has a name.

For too much of the world at large the names of the dead and wounded in Gaza might as well be John Doe too. They are the casualties and victims of Israel's decision to silence the rockets from Hamas terrorists by waging war on an entire population. Yes, every nation has the right to defend its people. Israel is no exception, all the more so because Hamas would like to see every Jew in Israel dead.

But brute force can turn self-defense into state terrorism. It's what the U.S. did in Vietnam, with B-52s and napalm, and again in Iraq, with shock and awe. By killing indiscriminately - the elderly, kids, entire families by destroying schools and hospitals — Israel did exactly what terrorists do and exactly what Hamas wanted. It spilled the blood that turns the wheel of retribution.

Hardly had Israeli tank fire killed and injured scores at a UN school in Gaza than a senior Hamas leader went on television to announce, "The Zionists have legitimized the killing of their children by killing our children." Already attacks on Jews in Europe are escalating — a burning car crashes into a synagogue in Southern France, a fiery object is hurled through a window in Sweden, venomous anti-Semitic graffiti appears across the continent, and arsonists strike in London.

What we are seeing in Gaza is the latest battle in the oldest family quarrel on record. Open your Bible: the sons of the patriarch Abraham become Arab and Jew. Go to the Book of Deuteronomy. When the ancient Israelites entered Canaan their leaders urged violence against its inhabitants. The very Moses who had brought down the commandment "Thou shalt not kill" now proclaimed, "You must destroy completely all the places where the nations have served their gods. You must tear down their altars, smash their pillars, cut down their sacred poles, set fire to the carved images of their gods, and wipe out their name from that place."

So God-soaked violence became genetically coded. A radical stream of Islam now seeks to eliminate Israel from the face of the earth. Israel misses no opportunity to humiliate the Palestinians with checkpoints, concrete walls, routine insults, and the onslaught in Gaza. As if boasting of their might, Israel defense forces even put up video of the explosions on YouTube for all the world to see. A Norwegian doctor there tells CBS, "It's like Dante's Inferno. They are bombing one and a half million people in a cage."

America has officially chosen sides. We supply Israel with money, F-16s, winks and tacit signals. Our Christian right links arms with the religious extremists there who claim divine sanctions for Israel's occupation of the West Bank. Our political elites show neither independence nor courage by challenging the consensus that Israel can do no wrong. Although one recent poll found Democratic voters overwhelmingly oppose the Israeli offensive by a 24-point margin, Democratic Party leaders in Congress nonetheless march in lockstep to the hardliners in Israel and the White House. Rarely does our mainstream media depart from the monotonous monologue of the party line. Many American Jews know, as Aaron David Miller writes in the current "Newsweek", that the destruction in Gaza won't do much to address Israel's longer-term needs.

But those who raise questions are accused by a prominent reform rabbi of being "morally deficient." One Jewish American activist told me this week that never in 30 years has he seen such blind and binding conformity in his community. "You'd never know," he said, "that it is the Gazans who are doing most of the suffering."

We are in a terrible bind — Israel, the Palestinians, the United States. Each greases the cycle of violence, as one man's terrorism becomes another's resistance to oppression. Is it possible to turn this mindless tragedy toward peace? For starters, read Aaron David Miller's article in the current "Newsweek". Get his book, "The Much Too Promised Land". And pay no attention to those Washington pundits cheering the fighting in Gaza as they did the bloodletting in Iraq. Killing is cheap and war is a sport in a city where life and death become abstractions of policy. Here are the people who pay the price.

That's it for the Journal. I'm Bill Moyers. We'll be back next week.