grapple with massive budget deficits, paul solman reports from rhode island where retirement benefits for public workers are on the chopping block. >> the unfunded pension wide liability nationwide is a $3 trillion problem and marginal change won't fix it, tinkering won't fix it, pretending we don't have a problem won't fix it. >> lehrer: and betty anne bowser has a cancer conversation with a doctor turned storyteller. >> the word "cure" is such a seductive word, a tantalizing word. the implication is two things: number one, that there's one cancer so you can cure all of it and the second thing is that it's a curable disease. >> lehrer: that's all ahead on tonight's "newshour." major funding for the pbs newshour has been provided by: >> you can't manufacture pride, but pride builds great cars.

and you'll find in it the people at toyota, all across america. >> auto companies make huge profits. >> last year, chevron made a lot of money. >> where does it go? >> every penny and more went into bringing energy to the world. >> the economy is tough right now, everywhere. >> we pumped $21 million into local economies, into small businesses, communities, equipment, materials. >> that money could make a big difference to a lot of people. >> and by the bill and melinda gates foundation. dedicated to the idea that all people deserve the chance to live a healthy productive life.

and with the ongoing support of these institutions and foundations. and... this program was made possible by the corporation for public broadcasting. and by contributions to your pbs station from viewers like you. thank you. >> lehrer: forces loyal to libyan leader moammar qaddafi struck at key towns today, trying to dislodge rebels. and qaddafi leveled a new accusation about who's behind the uprising in a phone call to state television. our first report comes from just inside tunisia. the name of the correspondent and his organization have been withheld, out of safety concerns. i i so the libyan state t.v. presenter sits nervously but

attentively. >> ( translated ): bin laden is the enemy of the libyan people. it's obvious this issue is run by al qaeda those say our children inside. >> reporter: today it was bin laden and al qaeda which were the focus of his anger, while he repeated his belief that the remembers in libya are all on hallucinogenic drugs. today pro-qaddafi forces apparently tried to regain control of towns near to the capital, tripoli. there was fighting reported in the coastal town of ms. rat a, several people were reported to be killed near the city's airport. pictures which emerged earlier today showed the extent of the weaponry available in that city. but it also shows worried protestors, too. it brandished what they say is a gas mask used by pro-government forces caming chemical weapons

have been used by the regime though, as ever, there's no way of independently verifying their claims. there have been reports of heavy fighting, too, in the west of tripoli. protestors there seem to have kept control of the town by occupying the central square but it's reported they have paid a heavy price. some witnesses say up to 100 people killed there. again, this can't be verified. in the semidesert a few miles inside tunisia from the border with libya the tents have sprung up. tunisia's army welcoming those flooding into n today to escape the fighting and the fear. their hunger is dealt with and they'll be sent on to the airport for flights home. for these egyptians, home to a very different egypt than the one they left. they say there will be a big party when they get back.

the green qaddafi flag you see here in the center of the screen in the distance proved that his forces still control this western frontier. and those officials are being careful. these people say they're taking laptops, cameras, and sim cards from our mobile phones. it seems the officials do not want pictures coming out of what these people are leaving behind in such a hurry. >> woodruff: the exodus of thousands of foreigners from libya is also continuing. two ferries carrying 4,500 chinese evacuees from benghazi were able to make it out today, despite rough seas. they arrived on the island of crete. but another ferry with 167 americans onboard remained docked in tripoli, unable to sail because of the weather. in washington, state department spokesman p.j. crowley was asked about conditions on the ferry. >> i can only imagine. these people have been onboard the ship for now well over 24

hours. i'm sure they are uncomfortable. they slept last night on the ship. >> lehrer: relief did come today for hundreds of europeans trying to get out. we have a report from eastern libya, where qaddafi's rule has been thrown off, but the evacuations continue. again, we are not naming or showing the correspondent. >> reporter: they drove bulldozers through the walls of the barracks where colonel qaddafi's hated militia had their headquarters. no everyone comes to look. they can't quite believe what what they did. opposite, the police station burned and shot to pieces. the people of benghazi are exhaust exalted but the foreigners caught up in this couldn't wait to leave. now they don't have to because h.m.s. "cumberland" came into shore this morning. people queued to get on board. some had been living in the town others made perilous journeys

from miles away across the desert or along the coast road. the children don't understand the danger they've escaped. their parents do. >> it was very, very frightening we're all right now. we could hear machine guns, we could hear the bombs falling and then after... the shelling was very bad. we could see the building from fire and people were dying. >> reporter: water engineer dave skiner from barnstable has nothing left but what he's wearing. everything in his compound was looted. >> we just left let the guys in. they started kicking the doors down and we said, well, just open the doors and say "come in, take what you want." we ended up in one of the villas and there was a dozen british ex-presidents there and we were fortunate in as much that we had

two women with us and i think the benghazi culture, they respect the woman and every time they knocked on the door, which was about every 15 minutes all through the night, this poor woman had to get up and say "look, there's nothing here, please go away." but the guys were waiting, they were waiting until we left. >> reporter: for the crew, this rescue mission is poignant, because it's the last. when they get home h.m.s. "cumberland" will be decommissioned. >> woodruff: there were also new calls today for sanctions and other actions against the libyan regime, but there was no consensus. a white house spokesman said the u.s. is not ruling anything out, including military action. but the secretary-general of nato said the alliance has no plans to intervene in libya. >> lehrer: now, what each side has going for and against it as the bloody struggle within and for libya intensifies. dirk vandewalle is an associate professor of government at dartmouth college and author of, "a history of modern libya."

and andrew mcgregor is a senior editor at the jamestown foundation's global terrorism analysis program. beginning with you, mr. vandewalle, as this thing plays out, there are the pro-qaddafi forces and, of course, there are the anti-qaddafi forces. how do they compare just in terms of potential military power going in right now? >> well, we should treat all the information that we're getting right now with a grain of salt. we simply don't know. what we know is that very likely at this point there are two or three groups remaining around qaddafi. first of all his personal revolutionary guard, which is about... estimated at about 3 soldiers. and there are also some units, brigades, from the army that are left loyal to qaddafi. we don't know much about them. some of these units are headed

by the sons of qaddafi or by loyal friends. and then we also have a large number estimated at least 2,000, perhaps as much as 3,000 of mercenarys that have been trained by qaddafi, come primarily from subsaharan africa niger in particular and have really been the backbone of this resistance to the uprising. they are headed primarily by members of... libyans very close to the regime and that were part of other brigades and that the regime has cultivated over the years. the difficulty is that we don't really know much of what the other side has. we don't know exactly how many of the brigade members, for example, in the eastern part of the country or left have been killed. we don't know much about the weapons that they have and so particularly on the opposition side, the people who have risen

up against the regime we're still not quite sure what exactly is there. it seems to be more of a popular movement at this particular point in time. we also don't know if some of these brigades have gone over, for example, or how many have been repatriated into tripoli. >> lehrer: mr. mcgregor what can you add or subtract to that in general terms and then we'll go through some specifics. >> in the east... you were just asking about what kind of equipment or military potential they might have there. most of those troops belong to lesser divisis of the libyan army. they have access to arms that are mainly left over from the soviet era. mainly what they have is military junk compared to the better hardware which is kept in the tripoli region. so bringing some of this

material out to face any loyal brigades that the qaddafi forces have, i wouldn't expect much success in terms of a one-on-one battle. the most important force that is available to qaddafi at the moment is the one led by his son. it's the 32nd mechanized brigade and it's been receiving all the top quality weapons that have been available since sanctions were lifted and there's even been reported that they have received some s.a.s. training as part of the deal with the british government to put british petroleum back in the country. >> lehrer: what about air force? is there any kind of remnants of an air force that qaddafi could use mr. mcgregor? >> yes, he still has some french and russian built jets and, of course, they continue to control the skies completely. so there's nothing the

opposition can do in terms of countering that kind of force. the question is whether the pilots will remain loyal to the qaddafi regime. we've already seen a couple desert with their warplanes. mirage fighter jets to malta a couple days ago. at some point you have to expect that there will be greater divisions in the air force as they continue to be called on to hit civilian targets. >> lehrer: mr. vandewalle, what about tanks and heavy armor of any kind? do the anti-qaddafi people have access to any of that and how much of that could be in the qaddafi forces? >> again, the information here is pretty sketchy. mr. mcgregor, for example, mentioned the 32nd brigade and the 32nd brigade is indeed headed by qaddafi's son hamid and is usually the brig gain that would have been sent into benghazi, for example, at least it has in the past.

so we don't know if it was, for example, that brigade. what has happened to it. but we do know that one of the brigade headquarters in benghazi has been overrun and so the forces... the opposition there should have had access to some of the weapons that were left by that brigade. now, of course, it's not clear whether or not they can really effectively use those weapons. what we've seen primarily in the east so far is people with small arms and not really very heavy artillery, for example. on the other hand, there is quite a bit of hardware left in tripoli, tanks and so on, and those could be much more effectively used by the qaddafi side, but as mr. mcgregor also said, we don't know if any of these or really... are remaining loyal to qaddafi. one of the problems in libya's army in general is that qaddafi has very carefully in a divide-and-rule fashion made

appointments so that, for example, you could have one loyalist to the qaddafi regime that is put in charge of the brigade but a lot of the brigade members may actually belong to a certain tribe that is not loyal to qaddafi. and, indeed, we've heard rumors that in the east, for example, one brigade refused to attack because the tribal members that were part of that brigade simply did not want to attack it will civilians that were pointed out by the commander. so it's a very fluid situation. certainly at least in principle the hardware angle benefits the qaddafi regime. but, again, we don't know anything about loyalty or the perseverance of those at this point that are fighting for qaddafi. >> lehrer: mr. mcgregor, i assume you agree with that, righting? that the unknowns much outweigh the knowns at this point. >> well, we do know a few things

and one is that the military capability of most of the libyan army is very limited and the officers, for example, are constantly rotated between different units to prevent any kind of personal loyalty blowing up within a certain unit. the point of this policy, of course, is to always keep the military in a position where they're unable to mount a military coup much as colonel qaddafi led in 1969. so he's always very conscious of this possibility and he does basically everything he can to keep all the units of the military that are not under the person control of his sobs away from the best hardware and away from proper training and in many cases they even have limited ammunition stocks. so there's only so much we could expect from these type of force >> lehrer: mr. mcgregor, the in

the next day or twoor three go by, what will you and other experts be looking at as to try to measure what the scope of this conflict could eventually be. a lot of people have predicted that this thing is not going to end in any way other than a very bloody way and there are others who say "no, no, no, it could go another way." what's the test? what are you going to be looking at mr. mcgregor to see where it's going to be going at any given moment? >> i'll be watching to see what happens with military forces in tripoli. if they stay loyal to the regime qaddafi could conceivably ride this out. but as his own representative to the arab league said just the other day, that by the use of mercenaries and firing on their own people, the regime has basically signed its own death certificate. if he's able to hang on temporarily, it will only be a

matter of time before enough force is gathered in libya to eventually depose him. >> lehrer: mr. vandewalle, how do you see it? what do you... what are you looking for? >> i would look at exactly the same kind of issues that are not... the forces on the side of qaddafi really have staying pow at this particular point in time. there is another major demonstration amidst all of this violence planned allegedly for tomorrow in tripoli in green square and it seems to me that at some point particularly the forces on the side of qaddafi will need to decide whether or not they can really persevere against this kind of continuing onslaught of popular upheaval against them. and so my... one of the things i would look for in particular is whether or not the revolutionary brigade that is a personal protector of qaddafi stick

around. if some of those start fleeing and start leaving tripoli then i think we would truly see the end of the beginning for qaddafi. >> lehrer: okay. gentlemen thank you both very much. >> woodruff: we have more on libya coming up with a look at the spike in world oil prices. plus, unfunded pension plans in rhode island and a very human look at an often deadly disease. but first, the other news of the day. here's hari sreenivasan. >> sreenivasan: worries about libya sent much of the stock market lower for a third straight day. the dow jones industrial average lost 37 points to close at 12,068. the nasdaq managed to gain almost 15 points to close near 2,738. a saudi arabian college student was charged today with a bomb plot that may have targeted former president george w. bush. khalid aldawsari was arrested on wednesday. according to federal court documents, the address of the bush home in dallas was included in his e-mails. dams and nuclear plants were also mentioned.

the suspect is due to appear in court tomorrow. a british judge today cleared the way for the founder of wikileaks to be extradited to sweden. julian assange is accused of sex crimes there. we have a report from jane deith of "independent television news." >> reporter: julian assange looked calm today but he was going into court to hear whether he should be sent to sweden to face serious charges. the authorities there want to prosecute him of allegations he raped one woman and sexually assaulted another on a trip to stockholm last summer. julian assange's supporters believe the whole case is politically motivated, an attempt to bring down wikileaks. his lawyers arguing extraditing him to sweden would breach his human rights and that media coverage has turned him into public enemy number one. but district judge howard riddle ruled extradition was legal and there's no reason why mr. assange wouldn't get a fair

trial. the judge said it was highly unlikely that anything that's been said so far about julian but outside court, julian assange laid into the system of european arrest warrants. >> what we saw today at belmarsh was a rubber stamping process that comes as no surprise but is nonetheless wrong. there was no consideration during this entire process as to the merits of the allegations made against me. >> reporter: julian assange denies those allegations. he's on bail while he prepares to go to the high court to appeal against this extradition and in his words being dragged off to an uncertain destiny. >> sreenivasan: the u.s. government is still investigating whether to file criminal charges against assange over the leaks of thousands of secret documents. a new military offensive has begun in somalia against

militants linked to al-qaeda. the new campaign involves 17,000 african union and somali troops based in mogadishu. there's also been fighting along the border with ethiopia. somali officials said at least 39 civilians have been killed in four days of fighting, along with dozens of militants and troops. hopes of finding more earthquake survivors in new zealand began to dim today as the death toll reached 113. search crews in the city of christchurch combed through unchecked areas, and they worked to clear debris from tuesday's quake. some 228 people were still missing. officials said no one had been pulled out alive in more than 24 hours. the u.s. air force has awarded boeing a $35 billion project to build the next-generation tanker plane. the award, announced today, called for building nearly 200 of the giant planes. boeing and its rival e.a.d.s had waged a furious lobbying battle, going back a decade. at different points, each company was awarded the project,

only to have it taken away. pentagon officials said they hope this decision stands. >> they have the right to a protest as part of the process, but as we've said from a year ago when we first came before you, we think we've established a clear, a transparent, and an open process. we think we've executed on that, and that will not yield grounds for protest. >> sreenivasan: the tankers allow fighter and supply planes to refuel in flight and cover long distances. a major roundup of suspected mexican drug gang members took place across the u.s. and latin america today. the u.s. drug enforcement administration said it was a direct response to last week's murder of american customs agent jaime zapata. he was killed last week by gunmen in mexico. more than 200 people were arrested in nine u.s. cities. general motors has reported its first annual profit since 2004. the automaker finished 2010 with a net income of $4.7 billion boosted by strong sales in china and the u.s.. meanwhile, toyota recalled another two million vehicles in

the u.s. over problems with gas pedals getting stuck in floor mats and carpeting. more than 14 million toyotas have been recalled worldwide since 2009 for that same problem. those are some of the day's major stories. now, back to judy. >> woodruff: and back to the libya story and its impact on oil and gasoline. libya normally exports more than 1.5 million barrels of oil a day to the world. but the violence has disrupted some of that production and added new anxiety to international markets. today, the price of oil hit its highest levels in two-and-a-half years when crude oil futures broke $103 a barrel. it eventually dropped for the day finishing just over $97 a barrel. in the u.s., gasoline prices are following that general path upward. the average price today is $3.27 a gallon up 25 cents from a month ago. for more on all this, we check in with two people who follow the oil business closely.

raad alkadiri is head of global risk at p.f.c. energy, which advises energy companies and countries around the globe. and carl larry is the president of oil outlook and opinion, a research and consulting firm in houston. thank you both for being with us. start with you, raad alkaadiri. so libya exports, we said, one and a half million barrels a day. what percentage of the oil output does that represent? >> russia produces over one and a half million barrels, which is roughly 2% of global production of crude. it exports about 1.2 million barrels a day. so not insignificant. and i think at a time when you have uncertainty in the market, at a time what's going on in the middle east has spooked traders, has spooked the market, suddenly seeing actual supply disruptions potentially, of around half a million barrels a day becomes very significant. >> woodruff: even if it's just 2%. now, has all of that production been shut down?

>> not all of it and obviously it's still sketchy as to what exactly has been shut down but it seems the production that's actually managed by foreign companies who've moved out their personnel, it's this production, about half a million barrels a day that's actually been shut in. what's uncertain is how much of the rest of the production that is managed by the libyan national oil company is actually being disrupted not by violence or not by attacks on the fields, etc., but just by the general chaos sweeping libya. >> woodruff: carl larry, who are the customers? who's affected by this? >> i think most of the oil they're seeing leave libya will head to europe and asia. a small amount comes to the u.s. but it's not significant to cause major spikes that we've in the past few days here on the futures market in america. but i think it's enough that people... it's you have no make people worry and the instability in the whole region is, i think,

what people are focusing on right now. >> woodruff: so how much of it-- to the point that we just heard from mr. . >> randy:-- is specifically because of the violence in libya the disruption there, and how much of it is just this general nervousness? >> i think... i want to say that probably the majority of it is the nervousness of the contagion that's going on in that area. it's not just libya, it's the military rule in egypt right now and if libya does lose qaddafi, we don't know how or who is going to be operating that country. so if it goes on past that, that's another thing we're going to have to worry about. this is not a premium that's just going to go away on fear. this is something we'll have to live with going forward. >> woodruff: can you break it down, raad alkaadiri, country by country? how much of the anxiety is over saudi arabia or bahrain or iran or some of the other countries in the region in north africa and the middle east. >> i think whatever you have instability in the middle east,

even when it doesn't directly impact oil production, what you see is the markets get spooked. they're always worried about some sort of contagion effect. obviously what's going on in the middle east right now is very new, it's very unsettling and it seems to be sweeping across the region. what people worry about ultimately the saudi arabia. libyan disruptions are important and the fact that you have physical disruptions as opposed to just the fear of physical disruption is an important additional factor in driving the psychology of the market and driving prices upward. but ultimately it's that worry that somehow as this disruption spreads it's going to hit some of the larger producers and the mother lode of that is saudi arabia. >> woodruff: and saudi arabia being, what, the world's second largest producer? >> second-largest producer after russia and the world's largest exporter. >> woodruff: and the world's largest exporter. help us understand, carl larry, the effect on gasoline prices here in the united states for people who are watching and are saying, all right, that's all

interesting, how is it going to affect and will it continue to affect the price of gas and diesel here in the u.s.? >> well, in an overall picture i think the oil prices are one thing that generates a higher price for gasoline. but at the bottom baseline of it all, the supply for gasoline here in the u.s. is actually near record levels. and our demand right now for gasoline is not that high. if we look back to 2008, it's a whole different picture. back then, the demand was record highs, supplies were running low and refinery production was actually struggling to keep up. so it's a different scenario here. we see gasoline prices follow the higher price in crude oil but i don't think we'll see spikes like we saw in prior years. so that's the key to keeping the economy on a steady growth pattern. we can handle small rises in oil prices but major spikes, especially for a prolonged period, are what's going to be detrimental. >> woodruff: both of you said at the outset, i think, that much

of the libyan oil goes to europe and asia. so what about the effect on the world economy and how that ripples, how the effect of that touches the united states? >> well, i think they are two different issues that need to be considered. one is the disruption. and the saudis have stepped in today and said that they will fill in for the lost supply and this is the essence of the saudi's geopolitical role. they're the central bank of oil, they're there to provide liquidity when the market needs it and they have roughly the same type of oil. it's a light sour rather than light sweet but in terms of european refineries, it can handle that kind of crude. ultimately it's going to be the combination of how nervous the markets are, how much disruption there is in the middle east. and ultimately what it does to prices. i think if prices do stay high it will start to have a drag effect. particularly on some of the economies of asia. probably less so on the u.s. economy. and in europe it's particularly

italy that's going to be affected by this. but overall as brent prices-- which is the marker in europe-- get driven up, they're much higher than the w.t.i. price there in united states, that's going to start to have an impact on disposable income. >> woodruff: so, carl larry, if this situation in libya doesn't get resolved over the next days or weeks... let me turn that around and ask how long can this go on before we see a significant worsening of the oil picture? >> well, we spoke about this earlier. as more unrest continues to grow in this region, that's going to keep prices higher. if we see this continue over to the next couple weeks obviously we're not seeing resolution in the middle east and that's what's going to cause prices to continue higher and even see higher spikes, but i think the one thing that's really interesting right now is that for years the u.s. has been the leader in oil consumption and driving oil price. this one time particularly we're

following and just like you said we're watching europe and watching asia. if their economies start to slow, the prices will start to deteriorate. but right now we're following that trend so we're following the price spikes over there. >> woodruff: so is the bottom line here that there's some kind of cushion for the united states? >> i think there is a cushion. there's a cushion in terms of supply and ultimately in terms of the overall market there's a cushion that's going to be provided by saudi arabia. saudi arabia has four million barrels a day, five million barrels a day of spare capacity that exists within opec. it there's for precisely the reason. it's the-to-step in and fill in any gap. the danger and the worry in the market will be is if the unrest continues and if it spreads closer and closer. that will create nervousness. as yet the saud dis look to be able to do what they have pledged to do. >> woodruff: raad alkaadiri and carl larry. thank you both. >> thank you. >> thank you.

>> lehrer: next, the battle between states and unions over pensions. the biggest fight in wisconsin and ohio remains over new bills to curb or end collective bargaining. in wisconsin, state police searched for senate democrats who are refusing to return for a vote, even as the assembly moved closer to passing a bill. but in many states, there are debates as well over demands to change pensions. "newshour" economics correspondent, paul solman, has our story from rhode island. it's part of his ongoing reporting on making sense of financial news. >> the fundamental financials underpinning our state and our economy don't present a very strong picture. >> reporter: diplomatic understatement from former venture capitalist gina raimondo, a rhodes scholar who became rhode island treasurer last month to tackle its massive fiscal challenge. the nation's smallest state,

barely a million strong, has a $300 million deficit, mainly due its pension system, in worse shape, per taxpayer, than california, illinois, new jersey, certainly wisconsin. >> rhode island has a $5 billion unfunded liability which is the highest unfunded liability per capita of any state in the country. in 1998, our budget was paying $145 million into the pension, this year we'll be $335 million and five years from now it will double again. >> reporter: unionized, democratic rhode island's flying under the radar right now as wisconsin and other states openly attack public sector benefits. but it's a case study of a national crisis: unfunded pension promises to retiring government workers, some three trillion worth dollars nationwide.

in rhode island, as elsewhere, the root cause is plain and simple: governments gave workers benefits instead of raises, salting away a pittance to pay for them. >> so i could promise you today in 25 years when you retire you'll have a very rich benefit and by the time you come to collect, you know, i'm long gone, i'm no longer in office. and i believe the time has come to fundamentally structurally fix the system. >> reporter: so what's the hit the average pensioner of rhode island is going to take? what's the haircut as its called? >> i think it could be a significant hit. >> reporter: 20%, 30% hit it could be? >> it could be. it could be. you know, in rhode island, we have 105 pension systems. so for certain sections the haircut will be significant, you know 30% or 40%-plus. for other, you know, systems it will be less. >> reporter: but at the union local for state workers, employees say they've helped build the pension fund. >> a lot of people don't realize that we pay into it. that we have paid since i've

gone to work every pay period, and i've never skipped because it gets taken out, 8.75% of my salary. >> reporter: mary riley, a clerk at a state college says the retirement age has already been raised; benefits, reduced. she no longer knows what her pension will be. >> you know it could be anywhere from maybe $12,000 to-- i don't, i don't know! >> reporter: what did you think you were going to have? >> i was hoping to have maybe, maybe $20,000 or $22,000 you know. >> reporter: a year. >> a year. >> reporter: and now it could be as low as $12,000. >> yes, yes, i really don't know. >> reporter: do you understand the feeling out there among a lot of people? that is, i'm a taxpayer, you're a state worker, i'm paying for you, i'm having a hard time, maybe i've lost my job. you should share the pain. >> we have made concessions, and we have shared the pain. it's not that we're greedy. we have shared the pain >> you keep downsizing your life, downsizing your life and eventually you've downsized it so much that you just can't give. >> reporter: joann teixeira left

the private sector to work for the state as a cook, taking a pay cut to $17 an hour. >> i wanted to have a scheduled paycheck every month and know that i was going to be able to retire someday from that. >> reporter: so a safe, solid pension was crucial to your decision? >> the pension and the health coverage was crucial, yes. >> reporter: local union president michael downey joined the university of rhode island as a plumber 31 years ago. >> you told me to come to work. i made a decision to come. that was my choice. no one forced me. and it wasn't because i thought it was some great job. i was looking for stability and a pension and i was paying into a pension. and at the end of the day, or towards the end of their career they say, "no, you're not at the finish line yet, we're making one more adjustment." and it's pitiful. we have litigation as we speak about those changes and the argument is that we feel as though vested and people who were told a certain promise and the promise should be kept. >> reporter: but without dramatic changes to the pension system, rhode islanders face dramatically higher taxes.

and/or austerity. in the rotunda of the state house: the lofty ambitions of rhode island: a just legal system, higher and higher education, fine arts, but, says the treasurer. >> there's only so many resources, and to fund these unfunded pension liabilities the money has to come from somewhere and where it's coming from, it's siphoning off capital from public schools, public buses, public parks, public libraries and higher education. >> reporter: so this was the home for eight boys that came from abused and neglected families. and upstairs here were the bedrooms where they used to sleep at night. >> reporter: this house was set up for kids in state custody, adopted by the boston red sox. on rhode island day, the kids went to fenway park. budget cuts shut the home in 2009. >> as you can see the beds have been dismantled. i just have so many memories of this place and the boys that

lived here and i remember a young boy, jeffrey who was in this room who was just, came to us so broken and so hurt and vulnerable and left us just a thriving young man. >> reporter: the boys were all placed elsewhere. but down in the kitchen margaret holland mcduff of family service of rhode island worried what's next? >> the soup kitchen will be closed. the case management and the financial literacy programs for those families will be closed. the employment placement services will be closed. it's critical moral decisions that our leaders have to make. are they going to continue to fund systems like pension systems that we already know are unsustainable and cut services to the vulnerable? >> reporter: but when people say to us, "look, i took the job with the state of rhode island because there was going to be a stable and dependable pension, isn't that fair?" >> the game has changed. people's salaries have changed,

people's stability have changed. people's idea that they're going to work at the same company for 30 years has changed as they've gotten that pink slip that they never expected. these children are the most vulnerable in our community. i mean in any other community around the world this is-- these are the kind of children that a village gets behind and i want to know that rhode island is going to be that kind of village for these children. >> reporter: but if rhode island and states like it can't solve the pension problem, can't raise taxes, can't cut more, their only other source of funding could dry up: borrowing in exchange for their ious: their municipal bonds. >> i think my most likely scenario is that there would be one or two major municipalities, potentially even a state that runs into a... a crisis where they cant roll over their short term debt. that's the direction were that's the direction we're heading in and its a very serious situation. >> reporter: in short, a municipal bond default in which bondholders get paid less, maybe far less, over a longer period of time.

no wonder interest rates on muni bonds are up. treasurer raimondo says there's no chance of default but that means a pension overhaul. >> this problem of the pension, rhode island faces it, every state in the country faces it. the unfunded pension liability nationwide is a $3 trillion problem. you know, tarp-- we were prepared as a country to put aside $700 billion. the bailout of fannie and freddie was $400 billion. they all pale in comparison to the enormity of this financial challenge. and marginal change won't fix it, tinkering won't fix it, pretending we don't have a problem won't fix it. looking in the eye of this enormous financial problem honestly and recommending fundamental changes to a system i believe is the solution. >> reporter: fundamental changes that, even if the problem is as dire as raimondo claims, no one

in rhode island is yet willing to make. >> woodruff: finally tonight, a book conversation about our understanding of cancer and the search for breakthroughs to treat it. "newshour" health correspondent betty ann bowser has the story. >> reporter: this year, more than half a million americans were diagnosed with cancer and although it is no longer an automatic death sentence, cancer is still the second-leading cause of death in the united states. dr. siddhartha mukherjee knows oncology well. he's a researcher at the columbia university medical center in new york city. in a new book called "emperor of all maladies" mukherjee writes a history of cancer. he tells the stories of people

he's treated and those of leading researchers who've dedicated their lives to a disease for which the doctor thinks may never have a complete cure. we sat down with him recently in his lab. first of all, thanks very much for being with us today. >> thank you for having me. >> reporter: so why did you decide to write a book about the history of cancer. >> i started writing the book when i was in training in cancer medicine and i wrote the book really in order to answer a question that was raised to answer a question and that was a woman i was treating for abdominal cancer and she at one point in time during her therapy asked me... she said "i'm willing to go on with what i'm battling but i need to know what it is. i need to know its history." and this was... she was not the only person. this question kept on coming over and over again in different forms and the book is an attempt to answer that very basic question: what is cancer? it's a disease that clearly affects all of our lives but

what is its history? what is it past? so i put it together in a book. >> reporter: you make it almost like a biography, like cancer is an individual, a person. and you use terminology like "it's immortal." whereas human beings aren't. >> cancer is not one disease but a whole family of diseases, but all these diseases are linked in a very fundamental level, ott a biological level and they're characterized by the abnormal, uncontrollable growth of cells. and it's, in fact, this very feature, the fact that these cells keep dividing, that gives them what i call the immortality and if there's one really chilling realization at the bottom of this book at s that although cancer can be unleashed by chemicals and various things from the environment, the fundamental genes that control cancer cells are very much part of the human genome. >> reporter: you start the book by talking about a patient whose name is carla. and you come back to her throughout the whole book and you more or less tend book with

her. what was it about this particular patient that made you want to do that? >> well, i think she... she... she... she was an emblem to me of everything that goes into making or into facing cancer. she was resilient, she was brilliant, she was inventive, she was... she brought every bit of her resourcefulness to this moment in her life. >> couric: she had leukemia. >> she had leukemia. >> reporter: and a very, very dreadful form of leukemia. >> absolutely. a very dramatic, dreadful form of leukemia and the one other piece of it, of course, is that her history-- which started happening in 2005-- was, of course, linked to sidney farber, the other major character in the book, who eventually-- bit by bit by bit by bit-- finds a cure for a particular form of leukemia, the same kind of leukemia she had.

so carla was very reminiscent to me of the connection to so many historic years between a time present and a time past and that's why i thought she would connect the book together. >> reporter: and she didn't die. >> that's right. i sometimes say when i was writing the book it's a very humbling moment. it was like driving a car without a destination because i do not know while i was writing the book whether she would live or die and as it turned she is still alive. >> when you were doing your research, it was interesting. a lot of the things that people learned that led to breakthroughs in cancer were unexpected. >> yes. >> reporter: they weren't "ah-ha" moments. >> yes, this scottish surgeon was walking through the highlands in england and he heard some shepherds saying "when we remove the ovarys of cows and goats, the breasts of these animals change, the pattern of milk production changes." so he began to wonder... this

was a time when no one knew about estrogen so he began to wonder what is the connection between ovaries and breasts? and he said well if ovaries are connected to breasts then maybe they're connected to breast cancer and he took out the ovaries of three or four women with breast cancer and had these spontaneous... not spontaneous but amazing remissions. and it was... this is the basis for tamoxifen, the drug that blocks estrogen and blocks breast cancer wlochlt would have thought that walking through and talking to a shepherd in scotland would affect a billion dollar drug which is very, very powerful against breast cancer today. >> reporter: where are things today with cancer in the united states of america? >> i think there has been remarkably important record of progress. that's not true for every form of cancer. there's some forms of cancer which are still lagging in terms of the attention paid to them. but overall there's clearly a record of progress. >> reporter: what are some of the most disturbing things where there have not been a lot of

progress? >> pancreatic cancer is a great example. we still don't know very well why it is that pancreatic cancer responds so poorly to chemotherapy. we know a little bit about it, but not enough about it. esophagus cancer. cancer of the esophagus. we don't know very much about exactly why that cancer is so hard to treat. one last example, very worthwhile example, lung cancer was a big disease, it was considered one big entity and we now know that even that cancer can be subdivided and, in fact, some subportions of lung cancer respond very, very well to this one medicine. so that gives you a direction as to where we're going next. even a single cancer will be broken up into smaller entities and specific medicines will be designed to those small entities spes specific prevention mechanisms. >> reporter: do you think writing this book has been the kind of experience that makes you a better doctor?

>> i think so. i think, you know, i think one of the most important things that the book made me realize is the narrative aspects of medicine and that is that medicine is about story telling. >> reporter: doctor, thank you so much for being with us. >> thank you, thank you for having me. >> lehrer: again, the major developments of the day: forces loyal to libyan leader moammar qaddafi launched counter attacks on rebels and qaddafi accused osama bin laden of fomenting the revolt. evacuations continued from libya. thousands of chinese were taken out on ferries. but bad weather kept scores of americans waiting in tripoli. and a british judge cleared the way for wikileaks founder julian assange to be extradited to sweden on sex crime charges. >> lehrer: and one more item tonight-- the launch of the space shuttle. and to hari sreenivasan for more on that story plus what's online. hari? >> sreenivasan: the final

mission for space shuttle discovery lifted off this afternoon from cape canaveral, florida. it's carrying six crew, cargo and a robot assistant to the international space station, 220 miles from earth. discovery and the other two shuttles, endeavor and atlantis, are being retired because of high costs. we caught up with "newshour" science correspondent miles o'brien at kennedy space center. he has attended almost 40 shuttle launches. i asked him about the legacy of discovery and the space shuttle era. >> "discovery" has flown the most missions and you could argue the most significant missions, both return to flights after the challenger "challenger" and "columbia" disasters. the deployment of the hubble space telescope. numerous significant events. the second flight of john glenn into space after his long time away from space after being the first attorney in orbit the earth. >> sreenivasan: when we look at the bigger picture of the space shuttle program, they thought it was going to be making money.

what was the promise that we had with space shuttles versus what they delivered? >> well, the promise of the space shuttle program, when you look at how they were selling in the front of congress was just pure fancy. there were all these studies which indicated the space shuttle fleet could be flown on the order of once a week and that it would have airliner-like capability for turning it around once it got on the ground. but it's an incredibly complicated system and there wasn't a full appreciation at the time for really how difficult it was to fly a reusable spacecraft to and fro space. nasa was trying to meet that promise and then of course we lost "challenger" 25 years ago. >> sreenivasan: so what happens to "discovery" next? when you see some of the most recent pictures, it looks like of worse for wear, that it's been through the wringer. >> it looks like han solo's spacecraft from "star wars," it's a little bit singed, frankly. it's got many millions of miles

on the odometer as it were. and those heat-resistant tiles-- some 20,000 of them that envelope the space shuttle and keep it safe for its crew, assuming all goes well when it comes back in for reentry-- they get singed. so when you get close to an orbiter you suddenly realize that it's been through the mill, so to speak. it's not pristine on the outside. now you go on the inside and it's got that new-car smell. they do a very nice job of turning these things around and making them as new as they possibly can be. they were certified... each orbiter was certified for 100 flights on the airframe and this will be the 39th flight for the space shuttle "discovery". so in theory she could go on for a long time. watch all of that conversation plus find more on the shuttle launch on our "science" page. and on our "making sense" page, find out how healthy the public pension system is in your state. plus, we've launched something new for tracking foreign news. here's more. >> during the recent upheaval in egypt which brought an end to president hosni mubarak's

30-year reign, senior correspondent margaret warner reports from the streets of cairo. both on the jubilation of the egyptians and their anxiety about the future. senior correspondent ray suarez reports for our global health unit and recently went to cuba where he took an in-depth look at the country's health care system. on the world page, you can find all of their reports from the broadcast as well as their behind-the-scenes stories as they travel the globe. you'll also find breaking news, feature stories, and reports from our partners at global post. find our world page and much more on our web site: newshour.pbs.org. >> lehrer: and again to our >> woodruff: and that's the "newshour" for tonight. on friday, we'll talk to two governors-- republican mitch daniels of indiana and democrat brian schweitzer of montana about budget troubles in their states, and more. i'm judy woodruff. >> lehrer: and i'm jim lehrer. we'll see you on-line. and again here tomorrow evening with mark shields and david brooks, among others. thank you and good night. major funding for the pbs newshour has been provided by:

>> oil companies have changed my country. >> oil companies can make a difference. >> we have the chance to build the economy. >> create jobs, keep people healthy and improve schools. >> ... and our communities. >> in angola chevron helps train engineers, teachers and farmers; launch child's programs. >> it's not just good business. >> i'm hopeful about my country's future. >> it's my country's future. >> you can't manufacture pride, but pride builds great cars. and you'll find in the people at toyota, all across america.

and by the alfred p. sloan foundation. supporting science, technology, and improved economic performance and financial literacy in the 21st century. and with the ongoing support of these institutions and foundations. and... this program was made possible by the corporation for public broadcasting. and by contributions to your pbs station from viewers like you. thank you. captioning sponsored by macneil/lehrer productions captioned by media access group at wgbh access.wgbh.org