June 6, 2003

Announcer: From our nation's capital, this is WASHINGTON WEEK. Here's moderator Gwen Ifill.

GWEN IFILL, host: The president on a diplomatic tightrope in Europe and the Middle East.

President Bush at the center of multiple storms: in Jordan, where he prodded the leaders of Israel and the Palestinian Authority to end the violence, renounce terrorism and compromise over disputed land; in Europe, where he held a chilly meeting with old allies and then got out of town; and in the Persian Gulf, where US troops cheered him even as questions about why we went to war continued to build.

At home, Congress revisited tax cuts for the working poor, and the FCC relaxed ownership rules for big media companies.

Covering these stories for us this busy week: Jeanne Cummings of The Wall Street Journal; Alan Murray of CNBC; Juliet Eilperin of The Washington Post; and Pete Williams of NBC News.

Announcer: Here again is moderator Gwen Ifill.

IFILL: Good evening.

Analysis: Middle East peace talks

GWEN IFILL, host: Those of us who have followed the ups and downs of Middle East peace talks, from Camp David to Sharm el-Sheikh and back again, probably fall into two camps: those who believe nothing will ever work, and those who believe something has to. President Bush stepped up to the plate this week as a member of that second group, assuming a familiar role for an American president, the man in the middle.

President GEORGE W. BUSH: All here today now share a goal: The holy land must be shared between a state of Palestine and the state of Israel living at peace with each other and with every nation of the Middle East.

IFILL: The president's week, from the group of eight summit in Evian, France, to his meeting with US troops in Qatar yesterday, was a hectic one. Not one but two WASHINGTON WEEK panelists were on hand for the trip: Jeanne Cummings, who traveled with the president; and Alan Mor--Murray, who reported from the G-8 summit. We'll start with Jeanne.

So the president jumped right into the middle of the Middle East after having pledged early in his administration that he wasn't going to. What changed?

Ms. JEANNE CUMMINGS (The Wall Street Journal): A lot has changed the way they see it and Iraq has a lot to do with what ha--drove him to that podium there in Sharm el-Sheikh and in Jordan the next day. Basically, they--he sees several changes in the air. First of all, if he's going to succeed in Iraq, he really does have to try to bring some peace to the region. And--and he also promised Tony Blair and all of these Arab leaders that he would do this, and he's got to make good on that promise. And I also think that he feels in--in the new Palestinian Prime Minister Abbas that there is actually an opportunity here. He thinks this is someone he can work with.

And finally, they think that people view terrorism differently now. And so for a long time the Middle East violence was sort of, you know, housed in this tiny corner of the world. But now that there are terrorist attacks in Bali and New York and in Saudi Arabia, that that--the suicide attacks in Israel now take on a different le--you look through them with a different lens.

IFILL: Now--now the big person who's being promoted at this--at this summit, as you mentioned, was Mahmoud Abbas, the new Palestinian prime minister, and the guy missing, the elephant in the room, was Yasir Arafat. That was by design, I gather.

Ms. CUMMINGS: Certainly. The president walked into the meeting with basically two objectives. One was to elevate Abbas, to put him on the international stage and send a clear signal that this is the man to work with. The second was just to get the talks back on track. It's hard to believe, but Abbas and Sharon barely got their second meeting in. They had meetings canceled and canceled over and over again.

Now--but when it comes to Yasir Arafat, that's the one thing the White House really didn't get what they wanted. They wanted Abbas up and Arafat down. And it was clear after the meetings with the Arab leaders that the Arab--the other Arab leaders were simply not going to go along with that. Arafat still has--is a big personality in the Arab world, and they're not going to shun him or sideline him in a way the White House wanted them to.

IFILL: Now, Alan, before the president got to Sharm el-Sheikh, he tried to make nice, do a little fence-mending business, at the group of eight summit with Jacques Chirac. Before I ask you about how well that went, let's listen to what the president said right after they met.

President GEORGE W. BUSH: (From Monday) I know there's a lot of--a lot of people on--in--in both our countries wondering whether or not we could actually sit down and have a comfortable conversation. And the answer is, `Absolutely.'

IFILL: Last week on this program Doyle McManus said before the president departed he said, `Viva la France.' So now he met with Jacques Chirac. Everything's happy now?

Mr. ALAN MURRAY (CNBC): Everything is not happy. There's no love lost between these two men. I mean, you have to look at the set up. President Chirac had arranged this summit to focus on the problems of the poorest countries in the world to try and draw a contrast with the war-mongering President Bush from the United States. Well, first of all, President Bush managed to get that $15 billion AIDS bill passed and signed right before he went over there, very significant move on his part, stole the thunder from anything that the French or the other countries are--are doing. And then he left 24 hours before the end, taking Jeanne and the entire White House press corps and you know what that's like. I mean, it's like the parade--you know, it's--it's as if half the parade took a turn down another street while you're still--still marching...

IFILL: But this is...

Mr. MURRAY: ...and really stole the thunder from the event.

IFILL: But this is an international summit. There were other leaders there. It wasn't all about President Bush being there, was it?

Mr. MURRAY: No, but--but President Bush is trying to make an important point and President Chirac is trying to make an important point. Chirac has said over and over again that he has a vision of a multipolar world. Now what does that mean? That means that right now we live in a world where there is one superpower. It's the United States, and he doesn't like that. He wants to create an alternative to the United States. So his whole foreign policy appears to be about checking the United States' power. Needless to say, President Bush doesn't like that too much. So you--you--you saw that playing out in kind of a--a low-key cordial way, but that was certainly the--the undercurrent of the summit.

Mr. PETE WILLIAMS (NBC News): Hasn't that always been the French position?

Mr. MURRAY: It probably has been, but I think it wasn't until Iraq when they got Russia and Germany to go the same way that it began to have a--a real push. What's interesting about this week was that before he went to France, he did go to Russia. He met with Vladimir Putin, took a very different approach towards Putin, said, `This man is salvageable. OK. He voted against us on--on the Iraq question, but we think we can get him back into the camp.' It was very open, cordial, invited him to come to Camp David in September. So--so clearly the name of the game is to isolate France, isolate Chirac and say, `We're not interested in your vision of a multipolar world.'

Ms. JULIET EILPERIN (The Washington Post): Alan, what gets accomplished in these summits? I mean, you know, given that the--he left early and took tee...

Mr. MURRAY: That's a good question.

Ms. EILPERIN: ...I mean, what--what--what can you say actually happened?

Mr. MURRAY: I--first of all, it's clear the president doesn't like them very much and they have been--the--the White House has been working hard to sort of downsize them. I--I mean, what--what everyone says is it's good for these leaders to have an opportunity to sit in a room together without a bunch of aides and talk to each other and that it's good for that to happen on a periodic basis.

But--but beyond that, what tends to happen is a sort of a pre-cooked agenda of items that their--their Sherpa, their staff had been working on before the summit happens. And it's--it's not--you know, less happened there than happened in the follow-up meetings in Sharm el-Sheikh.

IFILL: Well--and one of the reasons he left so early from Evian was because he said, `Hey, you--your o--said that you wanted me to work on this Middle East problem, and now I'm going to do it.' So he...

Mr. MURRAY: It was the perfect excuse.

IFILL: Exactly. And he made a real personal investment and also committed his--you know, Condoleezza Rice, the national security adviser, and--and Colin Powell, the secretary of State, to follow through.

Ms. CUMMINGS: Right. Well, he did, but he had two meetings over there. The first one--the one that captured all the attention was the one in Jordan with Abbas and Sharon. And, you know, their--their goals there were so small, you know, to put Abbas on the world stage and to create another meeting, it--it--this was an easy lift. All's he had to do was arrive and he accomplished his goals, but what's--but I think, you know, th--it was important that they did that, that they got the talks going again, but they're baby steps.

The more important meeting I think is the one that took place in Egypt with the other Arab leaders. And the reason for that is he got the Arab leaders to agree to become much more aggressive about cutting financing off to terrorist organizations, including Arafat. Now when they don't get--they may still meet with Arafat, but let's face it. In every country in every dialect money is power. And if they can start shifting the money so that it goes into Abbas' new operation and Arafat's bank account starts to run dry, then it's going to make it a lot harder for Arafat to operate in any powerful way.

Mr. WILLIAMS: And is that--is that more of a function of Iraq or the attacks in Saudi Arabia?

Ms. CUMMINGS: It's a little of both. I think it--from the White House, clearly, you know, Iraq is what drove everything for them. I think what happened in Saudi Arabia, though, did have a major impact amongst the other Arab leaders, that all of a sudden this was going to be turned towards them as well. And, yo--you know, the rhetoric is ke--was very, very strong from Mubarak and other leaders about, you know, just zero tolerance and no more incitement, you know, just a really broad attack on terrorism in their own countries.

Mr. MURRAY: Jeanne, it--it was interesting to me the other--the other sort of question that hung over this entire trip and was certainly an issue in Evian was: `Where are those weapons of mass destruction? You made--you went to the United Nation, you were on the world stage, you made this big case that Iraq had all these weapons of mass destruction. Where are they?' It doesn't seem to be a big question with the American public, but when he was with the other leaders in Evian, it was.

Ms. CUMMINGS: It was, and Tony Blair is taking heat in England and John Howard in Australia is taking heat because they haven't been found. So to the allies that assisted us in the war of Iraq, it could be very important to them politically. In the United States, because of the terrorist attacks, because of a lingering sense that we should have taken care of Saddam Hussein back in the last Gulf War, they--they might get away with it for a while, but even when the president got asked, he seemed surprised he was even asked. And his answer...

Mr. MURRAY: Yeah.

Ms. CUMMINGS: ...was, `Well, we found these--these two mobile labs,' but, of course, he didn't mention the fact that there were no weapons inside. And then he just leapfrogs the whole argument and says, `Well, yes, we said we were going there to stop terrorist from getting weapons of mass destruction,' and now they won't 'cause the regime's gone.

Mr. MURRAY: You could see how important it was because the president made an effort while he was in Evian to try and get other coun--countries to agree to a new legal framework...

Ms. CUMMINGS: Yeah.

Mr. MURRAY: ...that would make it easier to--you know about this...

Ms. CUMMINGS: To interdict planes. Yeah.

Mr. MURRAY: ...to--to interdict planes and ships.

IFILL: And they said, `I don't think so.'

Mr. MURRAY: And they said, `Based on whose intelligence,' you know?

IFILL: Right.

Mr. MURRAY: You--because--it was going to be because they were suspected of having weapons. Well, whose intelligence...

Ms. CUMMINGS: Yeah, the credibility of...

Mr. MURRAY: ...raises the suspicions.

IFILL: Let's talk...

Ms. CUMMINGS: The credibility just--problem.

IFILL: Let's talk a little bit about the fallout from what happens this week. Already we've heard Yasir Arafat saying, `I don't know that I'm for this.' We've heard Hamas saying, `I don't think I want to negotiate anymore with the Palestinian Authority.' And we have heard the skeptical Eur--European nations including, we haven't mentioned, Germany still holding back and--and waiting for more proof, as you've been pointing out. What has to happen next on both these fronts?

Ms. CUMMINGS: Well, in terms of the Middle East, the--the--Abbas is, like, the question mark. He--he's not an independent power center right now. He does not have his own base of support. And--so he's got to somehow build that quickly in order to function. But at the same time...

Mr. WILLIAMS: Does he seem sort of a US creation?

Ms. CUMMINGS: Well, no, he's--he's not. Arafat picked him and that's important because if you talk to other Arab leaders, they--they view him as loyal to Arafat to a l--to a certain degree and--and he owes his job to Arafat. So Abbas is--is am--a very complicated character in all of this and we don't know very much about him. But his strategy was to try to check Sharon. Sharon does one thing, I'll do the next. And--and they were really banking on getting an agreement from Hamas to--to stop the terrorist attacks.

IFILL: Is this now--is this happening?

Ms. CUMMINGS: And now Hamas is saying that they don't want to talk.

Mr. MURRAY: And--and, Gwen, on the G8, you know, if--if President Bush was trying to elevate the Middle East peace process, he was trying to diminish these G8 discussions. Now it's interesting that he's the host next year. They said, `You'll be glad to hear, Jeanne, it's not going to be in Texas in June.' Thank goodness. It'll probably be somewhere on the East Coast, but I think you'll find it's a much scaled-back, much less ambitious conversation.

IFILL: `A little too grand,' I think, Condoleezza Rice told you about these summits.

Mr. MURRAY: I'm--I'm glad you watched.

IFILL: I read your articles and watch your program.

Analysis: Tax cuts

GWEN IFILL, host: Back here in Washington, Congress was coping with one especially contentious bit of unfinished business. Remember that big tax cut? Well, it turns out that a last-minute change eliminated 6 1/2 million poor families from one of the majo--measure's major benefits: a $400-per-child tax credit. The Senate is already moving to fix what Democrats call an elitist flaw in the new law. The House is next, but Republican leaders there are already saying, `Any new tax cuts for the poor will be the beginning, not the end.'

Representative TOM DeLAY (Republican, Texas; Majority Leader): (From June 5th, 2003) I just remind the members of this House that we have now almost a trillion dollars left in the budget to do more tax relief for the American people, and you know what? We're coming back.

IFILL: Juliet, you've been watching all of this back and forth. Help us with the translation of what Congress was really up to this week on this.

Ms. JULIET EILPERIN (The Washington Post): Right. Everyone thought that the tax cut was over, but no.

IFILL: No.

Ms. EILPERIN: Essentially after particularly--I mean, after--for a huge number of liberal groups started mobilizing, pointing out who was hurt by this--we're talking about, you know, 12 million children who, you know, are not getting the same kind of tax credit that people thought. Essentially, the Republicans realized they had to do something about it; the Republicans in the Senate, that is. And so they scrambled and they came up with a compromise in which they decided that rather than have 10 percent of someone's income be used as a child credit, they raised it to 15 percent. So beyond if you're making $10,500, above that, you can get up to $2,000 of a tax credit. And so that's what they--that's what they did.

IFILL: But that's what the Senate--the Senate in order to get that also added ex--extra benefits for people on the upper end of it.

Ms. EILPERIN: Exactly. What they did is they raised the limit. So if you earn $150,000, you get that tax credit, too. So while technically this was aimed at low-income families, upper-income families benefit just as much.

Mr. ALAN MURRAY (CNBC): Juliet, the Re--the Republicans' argument is that--that you're--on the lower-income families, that these are people who don't pay income taxes. So you're bas--it's basically like a welfare program. You're giving money to people--you're giving tax relief to people who aren't paying income taxes.

Ms. EILPERIN: Exactly. At the other hand, you have people like Olympia Snowe, Republican from Maine, who says, `Look, these people paid payroll taxes. These are working families.'

Mr. MURRAY: Right.

Ms. EILPERIN: `So it's not like they don't pay taxes at all. And just because they're not at the same level as upper income doesn't mean they should be disenfranchised when it comes to their children.'

Ms. JEANNE CUMMINGS (The Wall Street Journal): Well, Juliet, it's not secret that Tom DeLay was really put out with the Olympia Snowes of the world in the last tax fight.

Ms. EILPERIN: Yeah.

Ms. CUMMINGS: So what are relations now between the House and the Senate?

Ms. EILPERIN: They're strained. I mean, there's no question about it. While, you know, they're trying to do things to work together, you really see that the politics in the Senate are geared towards compromise and that is something that Republicans in the House have no tolerance for. They feel like if Bush is in office, they have a huge leverage, and they just frankly are furious that they thought this was settled. Tom DeLay rejected this idea earlier in the week, and then by Friday, you know, look what's happened. So...

IFILL: So--sorry. When Tom DeLay says something that he said on the floor I guess yesterday, `OK. Fine. You want tax cuts. We got a lot more tax cuts coming for you.' Now does that mean an endless fight over tax cuts reopened again over this one issue?

Ms. EILPERIN: Certainly. There's going to be a huge push by the Republicans in the House to add a plethora of tax breaks to the next bill most likely or at least make this tax cut permanent which would make its--take its costs from $10 billion to $90 billion. So this is what they're going to do and then you're going to have a fight between the House and the Senate and it could kill the entire bill. It could be that at the end of the day, a few weeks from now, we don't have any child tax credit at all.

IFILL: Because it has to go into effect by the end of this month. Is that...

Ms. EILPERIN: That's right.

IFILL: Is that true?

Mr. PETE WILLIAMS (NBC News): How was this discovered? How was it that the Democrats in Congress didn't realize what was in the tax bill? How--how did this suddenly become a big deal?

Ms. EILPERIN: Well, it's a--a good--good question and the fact is The New York Times deserves credit for this in the sense that everyone knew that it was being left out, but, you know, it's just one of those things that was negotiated away and then again a number of liberal think tanks pointed out who's being disenfranchised. It ended up on the front page of The New York Times. And Republicans felt huge political pressure. If you talk to Charles Grassley, the Senate Finance chairman, he says it's the political volatility that forced him to act. It...

Mr. WILLIAMS: But it was originally supposed to be in there.

Ms. EILPERIN: It was in there and then it was dropped out in conference. The--the Senate had it in there, and then--through negotiations--and no one will say, in fact--this is something we pressed them on--how did it get dropped? No one wants to take credit for that, as you can imagine. So...

IFILL: And the White House is saying, `We'll sign whatever the Congress passes out.'

Mr. MURRAY: `Make this go away.'

Ms. EILPERIN: Yeah. Exactly.

Ms. CUMMINGS: Well--but that's--th--what are the other taxes if they're going to--they're going to try to lay on this thing?

Ms. EILPERIN: Well, there are a number of international taxes that they're talking about, kind of changing the way corporations can receive benefits for operating overseas. Those are the things that--they might throw a few things on there. They actually haven't decided because frankly this all came up this week, and while they were planning to move ahead with another tax bill, they didn't realize it was going to be this soon.

IFILL: Aren't...

Ms. EILPERIN: So, frankly, they're being caught unprepared.

IFILL: Aren't the people who are for this new tax cut exactly the people who said they didn't want any tax cuts at all?

Ms. EILPERIN: It's a good--it's a good point. It's a point Tom DeLay makes which is that the Democrats--the House Democrats who hated this bill suddenly screamed bloody murder and said, `You know, you're disenfranchising people. This is outrageous.' And, you know, again, the Republicans point out, `You weren't crazy about this to begin with,' but they certainly make an argument that this tax cut was skewed and this is a way to even it out a bit.

IFILL: Well, there was--thanks, Juliet.

Analysis: Debate over media ownership

GWEN IFILL, host: There was another big decision this week; this time, at the usually overlooked Federal Communications Commission. The debate was over media ownership: Who owns what where? And it was about technology. Has the world changed so much that it's now impossible to dilute all the new voices? Pete Williams has been following all of this for us and can hopefully straighten some of it out.

Mr. PETE WILLIAMS (NBC News): Well, let me put it this way. When I was growing up in Wyoming, the capital of Wyoming, Cheyenne, had the following: One company owned the morning newspaper, the afternoon newspaper, the only local television station, the top two radio stations and the cable television company. That was a classic media monopoly that was ultimately broken up.

Now the opponents of these new rules say, `Well, what we're ultimately going to get a sort of national version of that.' They're going to have a concentration of voices, but the people who favor this rule say, `No. Number one, the rules are carefully tailored to avoid that. And, number two, the dynamics of the media landscape won't allow that to happen.'

But here's what the commission did. Some of the rules govern ownership of stations nationwide. So, for example, the television networks were allowed to own more stations--not a lot more. They're allowed to reach a 10 percent greater audience. Some of the rules govern ownerships not nationwide but in a given community. So, for example--and this will all vary based on the size of a city. In the smallest cities that have no more than three television stations, you can't have cross-ownership like the Cheyenne, for example--Cheyenne example. You--one company would not be able to--the television company couldn't own a radio or newspaper. In medium-sized communities that have four to eight television stations, there would be some cross-ownership allowed, but it would be limited. You can't own really popular stations and so forth. And then in the large cities that have nine stations--nine TV stations or more, very loose restrictions. So a single company could own up to three television stations, eight radio stations, a newspaper and a cable TV operation, but...

IFILL: You need a chart, don't you?

Mr. WILLIAMS: ...but the--well, the argument was that the larger station you get, the more voices you're--you are so that--you know, your megaphone's a little bit bigger, there a lot more out there. Now the vote divided along party lines. Three Republicans favored it; the two Democrats voted against it. And the argument by Mike Powell, the chairman of the FCC, who really drove this issue, was that more than 80 percent of Americans, including people watching this program right now, get their television not from rabbit ears over the air but either from cable or satellite. And in many communities in America, you have a choice of over a hundred channels. So given that landscape, Powell said, it doesn't make sense to have these concerns about cross-ownership, about concentration of voices.

IFILL: Yeah.

Mr. WILLIAMS: There are a lot of voices out there.

Mr. ALAN MURRAY (CNBC): But, Pete, it--it--it--it looks like Chairman Powell may have miscalculated here because I'm told by people at the FCC this has become the most hotly contested rule they have ever adopted and that most of the comment that they're getting is against the rule.

Mr. WILLIAMS: Well, first of all, you know, this wasn't entirely their own decision to do this. Some of the previous rules have been struck down by courts. Congress said in the '96 Telecommunication Act that really got this ball rolling, you have to review your own rules every two years. So it was sort of foisted upon them. The--the public comments have been overwhelmingly against this. About half a million comments came into the FCC.

Mr. MURRAY: Well...

Mr. WILLIAMS: But Powell says, you know, most of those were sort of postcards. Everyone said the same thing, but it is interesting to look at the lineup. Among the people who opposed this: Common Cause, the National Organization for Women, the National Rifle Association, the Catholic Bishops, writers, producers. You had Ted Turner, the founder of CNN, opposing them. On the other hand, you had the television networks--I work for one--favoring them. You had the National Association of Broadcasters opposing them. So it was hotly contested, that's true.

Ms. JEANNE CUMMINGS (The Wall Street Journal): Don't th--isn't radio a model for them and not a particularly good one?

Mr. WILLIAMS: Well, the opponents--it is hard to find because of the--current rules prohibit a lot of this. It's hard to find an example. You know, you ask the opponents, `All right, where's the worst example of where you think it would happen?' It's hard to find a really clear example. So what they say is, `Look at radio.' And in 1996, Congress largely deregulated radio. And you had one big company called Clear Channel that owns 10 percent of the nation's radio stations. Now the opponents say in some communities, Clear Channel owns five or six stations, and they're sort of a homogeneous play list. You hear the same music. They've cut back on news. But Clear Channel and people in its defense say that radio is really on its hind legs before it was deregulated and that--and that Clear Channel has revitalized the radio industry.

Ms. JULIET EILPERIN (The Washington Post): Pete, what happens to the rules now? How is this going to be implemented? What are the implications for this on the ground?

Mr. WILLIAMS: The--these rules are going to be beat to death before they go into effect because, first of all, they'll be right back in court again. People who didn't like what the commission did will sue. And, secondly, Congress doesn't like them either. And it's an interesting little sort of bipartisanship group because they're--they're loved and hated by Republicans. For example, Trent Lott dislikes the rules, but Billy Tauzin in the House likes them.

IFILL: Well, we'll be watching to--or I--I was going to say, `It's going to be fun,' but maybe not.

Thanks, everybody.

Commentary: Shakeup at The New York Times

GWEN IFILL, host: Now a word before we go. Normally I try not to do too much naval gazing in this chair, but the events of the week seem to demand it. You've probably been reading about it--the big scandal at The New York Times that began with the spectacular fabrications of one disgraced writer and progressed to the dubious and cavalier work practices of another, and this week, the forced resignations of two of the most powerful men in journalism.

Since we are reporters around this table, we worry about the taint that can spread from revelations such as these. Many of you n--many of you know and first came to know me when I was working fo--as a reporter for The New York Times on--and reporting on this program. And you also know that WASHINGTON WEEK over the years has been a friendly Friday night roost for some of that na--newspaper's most distinguished journalists from Hedrick Smith, Steve Roberts and Tom Friedman to Linda Greenhouse, Rick Burke and David Sanger.

What I want you to know tonight is that journalists of that caliber will always have a home around this table. No matter what you hear, The New York Times remains the best of the best. The occasional lazy and dishonorable journalist cannot change that. My old bosses, Howell Raines and Gerald Boyd, know that, I know that and I wanted to make sure you know that, too.

GWEN IFILL, host: Thanks for watching. See you next week on WASHINGTON WEEK. Good night. Join the e-mail exchange on our Web site. We'll use your questions in our reporters' roundtable found only on WASHINGTON WEEK online. Write us at washingtonweek@pbs.org.