JIM LEHRER: The Federal Reserve issued fresh warnings about the economy today. Chairman Ben Bernanke told a House hearing the overall situation is "distinctly less favorable" than last summer.
He said consumers and business face an array of problems that could get worse before they get better.
BEN BERNANKE, Federal Reserve chairman: The incoming information since our January meeting continues to suggest sluggish economic activity in the near term.
The risk to this outlook remain to the down side. Those risks include the possibilities that the housing market or the labor market may deteriorate more than is currently anticipated and that credit conditions may tighten substantially further.
JIM LEHRER: Bernanke said inflation is a concern, as well. But he said the Fed will keep cutting interest rates to boost growth.
The Fed chairman voiced doubts about a Democratic bill to let bankruptcy judges cut mortgage rates in some cases. Bernanke said that could lead to even higher rates. President Bush has said he would veto that bill.
The Fed's report was underscored by new government data. The Commerce Department reported today new home sales fell nearly 3 percent in January to the slowest pace in nearly 13 years, and factory orders for durable goods fell more than 5 percent in January.
The economic data and potential interest rate cuts pushed the U.S. dollar to new lows in Europe and in Asia.
In the presidential campaign, the Democrats moved on from their last major debate. Barack Obama voiced confidence about his performance and said it's been "a wonderful few days."
But Hillary Clinton said she feels good about her chances in Texas and Ohio next Tuesday. We'll have more on the campaign and talk to Senator Clinton right after this news summary.
A battle over the worst oil spill in American history went to the U.S. Supreme Court today. The Exxon Valdez ran aground in 1989 in Alaskan waters. The giant tanker dumped 11 million gallons of crude oil into Prince William Sound.
The case today involved an award of $2.5 billion in punitive damages. Outside the court, the attorney for fishermen and others restated his main points.
JEFFREY FISHER, Plaintiff's Attorney: ... that there are 32,000 plaintiffs that were harmed in this case and that each of them stands to receive only $75,000. That's a modest amount for having your livelihood taken away from you over the course of one summer and the residual effects for many years after.
JIM LEHRER: ExxonMobil wants the damages dismissed. Its attorney did not speak outside the court, but during arguments, he said, "Exxon gained nothing by what went wrong in this case and paid dearly for it."
Over the years, the company has paid more than $3 billion in fines and cleanup fees. We'll have more on this story later in the program tonight.
Iraq suffered a setback today toward achieving political unity. The presidential council rejected a measure to organize provincial elections. The dispute involved letting the prime minister fire provincial governors. In Washington, a White House spokeswoman said, "This is democracy at work."
Defense Secretary Gates today urged Turkish forces to leave northern Iraq within days. Thousands of Turkish troops are engaged in a cross-border offensive against Kurdish rebels. Speaking in India, Gates said, "It's very important that the Turks make this operation as short as possible and then leave." He flew on to Ankara to make a direct appeal.
Al-Qaida's second-in-command vowed revenge today for the killing of a top commander. Ayman al-Zawahiri spoke in a video on the Internet. He said, "No chief of ours has died without a response."
In late January, a U.S. missile attack killed Abu Laith al-Libi, a top al-Qaida figure in Afghanistan. He was on the U.S. most-wanted list.
The European Union imposed a record fine on Microsoft today. It totaled $1.3 billion, the largest penalty ever issued for a single company. E.U. regulators said Microsoft defied a 2004 order and overcharged software rivals up to last October.
NEELIE KROES, Competition Commissioner, European Union: Microsoft continued to stifle innovation. How? By charging other companies prohibitive royalty rates for the essential information they needed to offer software products to computer users around the world.
JIM LEHRER: Microsoft said the fines represent past issues. It did not say if it plans to appeal. The software giant has been fined nearly $2.5 billion by the E.U. since 1999. It made $14 billion in earnings last year.
House Democrats today pushed through new taxes on big oil companies. The bill would roll back two key tax breaks. The result would be $18 billion in higher taxes on the largest energy companies. The money would go for tax incentives to support alternative energy programs. Similar bills passed the House last year, but died in the Senate.
On Wall Street today, the Dow Jones industrial average gained nine points to close at 12,694. The Nasdaq rose more than eight points to close above 2,353.
A House committee asked for a federal investigation of baseball star Roger Clemens today. Earlier this month, Clemens told a hearing he never used drugs to boost performance. A former trainer and another player contradicted that claim.
Also today, the heads of all four major pro sports testified about steroid use. They said they're open to new drug-testing legislation.
Conservative icon William F. Buckley died today at his home in Stamford, Conn. He suffered from diabetes and emphysema. Buckley founded the National Review in 1955 and served as its top editor until 1990. He also hosted the PBS program "Firing Line" for 23 years, with guests ranging from presidents to Nobel Prize-winners.
Today, in Washington, President Bush noted his passing.
GEORGE W. BUSH, president of the United States: He influenced a lot of people, including me, and he was -- I can remember those debates that he had on TV. And he was so articulate, and he captured the imagination of a lot of folks, because he had a great way of defining the issues. It was erudite, and yet a lot of folks from different walks of life could understand it.
JIM LEHRER: William F. Buckley was 82 years old. We'll have more on his life and work at the end of the program tonight.
