captioning sponsored by macneil/lehrer productions >> lehrer: go evening. i'm jim lehrer. egypt-style anti-government protests spread to more arab nations today. >> woodruff: and i'm judy woodruff. on the newshour tonight. we have the latest on the demonstrations in libya, iraq and elsewhere in the middle east. and margaret warner examines the turmoil in the tiny muslim nation of bahrain, home to the u.s. navy's fifth fleet. >> lehrer: plus, jeffrey brown explores how egypt's government blocked the internet during the uprising. >> woodruff: then, we have two budget stories. we get a liberal's view of the president's blueprint from vermont senator bernie sanders. >> lehrer: and we look at the

political battles over cutting defense spending. retrenchment brought about by cu >> woodruff: and from juarez, mexico, bill neely of independent television news reports on the bloody war against the drug cartels. >> three more killings here and already. this year is on course to be even deadlier than last year, when more than 3,000 people were murdered in this small city. >> lehrer: that's all ahead on tonight's newshour. major funding for the pbs newshour has been provided by:

>> and by the bill and melinda gates foundation. dedicated to the idea that all people deserve the chance to live a healthy productive life. the national science foundation. 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: the wave of anger that brought down rulers in egypt and tunisia kept rolling today, from north africa to the persian gulf. for the first time, protests broke out in libya, long ruled by muammar gadafi. we begin with a report from jonathan rugman of independent television news. >> reporter: benghazi is libya's second biggest city. eyewitnesses say police used rubber bullets to disperse around 2,000 people protesting

and throwing stones last night. and with no independent media, these pictures were posted on the internet. the brief arrest of a human rights lawyer prompted these demonstrations, and one libyan official claimed that most of the 14 injured were police. the protests began outside benghazi's security directorate. the crowds called for the arrested lawyer's release and then moved to other parts of the city, railing against corruption and against colonel gadaffi's 41-year rule. at one point, a poster of gadaffi was torn down. but benghazi has seen protests before, and there is no organized opposition in libya because political parties are banned. colonel gadaffi is 69 now. libyan television has today shown him greeting relatives of protestors killed in benghazi five years ago-- perhaps to show he's on the people's side. he's known as the leader of the revolution and doesn't believe

libya needs another. he rules with no parliament and no constitution but with so- called peoples' committees as laid down in the leader's green book. this is state television on satellite showing gadaffi's supporters in several libyan cities. turning them out isn't difficult. 70% of the workforce is employed by the state. and though unemployment is high, libya's oil wealth generates cash to buy off discontent. but tomorrow could be different. this is an online video calling for a so-called "day of anger" on egyptian lines. it shows gadaffi with hosni mubarak and his friend ben ali, the deposed president of tunisia. and the question is whether enough young libyans will overcome their apathy and their fear to demonstrate in large numbers.

this evening, new pictures appeared, reportedly of protests in the city of al beyda. and there have been reports of pre-emptive arrests in the capital tripoli. tomorrow's been declared a public holiday, which could backfire against the regime if many more demonstrators then take to the streets. >> woodruff: meanwhile, in yemen, the trouble kept building today. 2,000 police blocked thousands of students in sanaa from joining other protesters, and t people were kled in the city of aden, when police opened fire. amid the protests, president ali abdullah saleh, a u.s. ally, charged that forces with "foreign agendas" are spreading chaos in the region. but in washington, state department spokesman p.j. crowley dismissed that claim. >> every indication that we have these are spontaneous, these are indigenous, these are people across the region standing up and demanding more of their governments. and in fact, in yemen, you've

got a clash of protesters who want change and protesters who want the status quo. >> lehrer: in iraq today, violent demonstrations erupted about 100 miles southeast of baghdad. 2,000 iraqis demanding better services attacked government offices in the city of kuht. a top medical official reported 50 people were hurt. police denied reports they had opened fire. in neighboring iran, government supporters and opponents clashed at a funeral for one of two people killed in monday's protests. and in a speech, supreme leader ayatollah ali khamenei rejected president obama's criticism of iran for using force against protesters. >> ( translated ): america can bully a country as long as the people are not standing up for it.

the governments do not know that people come to power or leave power because of the u.s. one day america supports himr1te

unfair, free and fair elections and a more equitable distribution of power and matereriel resources. social justice, if you will. it's a majority scheidt population. but clearly what we see here, too, is an effort on the part of a group of bahrainny activists to tap into a sense of regional momentum. they have identified very

important moment historically across the region and are seeking too capitalize on what they believe to be an energizing moment and to rally their fellow country men. >> warner: paint us a word picture of bahrain. this is a typical gulf oil sheikdom? what's it like? >> well, bahrain is the country when oil was first discovered in the southern gulf. ironically now it has very little gulf oil left at all and relies, frankly, on saudi arabia for the extra revenues it needs to live. it's an island state halfway down the southern coast opposite iran and alongside the peninsula country of qatar. its closest ally is saudi arabia with which it is connected by a causeway of 15 or so miles of bridges.

and it's a police where it has majority here is population ruled by a sunni ruling family and a large banking and financial sector where expatriots live there, west yearners live there and find it comfortable to live there. but over the years it's been overtaken in this sense of being a commercial financial center by the other gulf sheikdoms like dubai, abu dhabi and doha. >> warner: back to you on the protestors, toby. are these young people energized and organized on the internet or is this the traditional opposition or a mix? and what are their main grievances? >> >> well, they represent a number of different things and this is evolving very quickly over the last few days. several weeks ago at the height of egypt's revolution it became clear egyptians were going to

rally through various social media and other kinds of media as well, other networks. bahrainians began organizing, a group of young activists began organizing on facebook and other places preparing for what they call the day of rage this past monday and they managed to energize enough folks to draw enough people into the street to constitute a significant prance. they also had security forces and the police responded a bahrainny police have done over the last few years, with incredibly brutal tactics, killing at least one person on monday and killing the second person on tuesday and the consequence of that is what might have been a small outpouring of people has now turned into arguably a movement with national and much more significant consequence. so the demands of the younger generation are very clear and they're focused on reform, the basic institutions of government the parliament, the constitution

as i mentioned earlier. but also a readjustment of the material relationship, socioeconomic status of the island's majority shiite population which faces a number of different kinds of discriminatory practices on the part of the government. the government has taken a dim view of the community over the last several decades and has implemented various oppressive and repressive apparatuss to make sure they don't enjoy any kind of considerable political influence. >> warner: let me interrupt you there and go to simon henderson. one ingredient is the "success" of tunisia and egyptian uprisings was that both cases you had an army that did not fire on young people. what about the bahrainian military? >> the bahrainian military doesn't count for much, it's the bahrainian security forces which are the crucial force and they are perhaps and in they don't

fire, they'll crack sticks overhead and break skulls and people will die from shotgun injuries and things like that. >> warner: i'm told a great proportion of them are foreign born. sunnis from other countries. >> this is a very contentious local issue that in what appears to have been an attempt by the government to jerry maner the population, they've been bringing in foreign sunnis and recruiting them to their security foorss. this both increases the sunni minority in the island and they're full of people who have no qualms whatsoever about hitting the local shiites. >> warner: in our remaining time let me go back to you, toby diaz i want to talk about the u.s. state, u.s. interest and u.s. response. yesterday the state department issued a very carefully worded statement calling on both sides

to show restraint, regretted loss of life but did not specifically call on the government to implement any of the reforms being demanded by the protestors. how key is the u.s. stake in bahrain and what do you think explains the reaction? >> the american stake is considerable. the u.s. has maintained a significant naval presence in the persian gulf for a long time. bahrain is home to the headquarters of the u.s. naval fifth fleet. the u.s. has been the sole provider of security for many of the arab states in the gulf, including saudi arabia and kuwait as demonstrated by several wars against iraq in the last 20 years. so the u.s. has a vested interest in seeing the durability and the stability for the el khalif, the ruling family in bahrain. this is tied over the long term to american materiel interests in the persian gulf. it's about oil. >> warner: and to you, what about the saudi factor here?

is the u.s. hamstrung by the fact that the saudis are watching these developments carefully? >> you're absolutely right. saudi arabia is watching this intensely and focused very much on it because in saudi arabia just across the causeway, that's the area of where the saudi arabia oil fields are mainly concentrated. it's also the area where saudi shi'as live. and in that area saudi shi'as are a local majority and the saudis are probably apprehensive about the shi'as causing trouble in bahrain. they're also apprehensive about chefsh changing from that population perhaps with help from iran to their own shi'as. >> let me ask you both briefly in like one sentence. do you want to hazard a prediction? is there only one way this can end? with egypt and tunisia did, with the ouster of the ruling party? the ruling family? or somewhere in between? toby jones, you first. >> my sense is that if there's

any sort of reconciliation here it will be through political reform and not regime change. >> couric: all right, simon? >> i suspect the position of the bahrainny prime minister who's been in the job 40 years and has a renown reputation for corruption is perilous tonight. >> warner: but you think they can do it through reform and not wholesale? >> that's what we're praying for and that's what the saudis are praying for. it's probably what the bahrainny ruling family is praying for as well. >> warner: no doubt. thank you both. >> lehrer: there's more on the aftermath of the egypt uprising coming up, with how the government shut down the internet during the protests. then, two budget stories-- a liberal's perspective and the challenges of cutting pentagon spending. plus, mexico's bloody drug battle. but first, the other news of the day. here's hari sreenivasan. >> reporter: israel warned today that iran is about to send two warships through the suez canal to syria.

it is the first time that has happened since iran's revolution in 1979. the israeli foreign minister called it a provocation, and he said israel cannot ignore such acts forever. the egyptian body that oversees the suez canal denied the israeli claim. republicans in the u.s. house forged ahead with plans for major spending cuts today in the wake of a veto threat. they've proposed a reduction of $61 billion in the current fiscal year from law enforcement to education programs. at the white house, the new press secretary, jay carney, stopped short of repeating yesterday's veto warning. >> the president has made clear that he doesn't... we cannot support arbitrary or irresponsible or deep cuts that undermine our ability to grow the economy or create jobs in the future or harm our national security or other essential functions of government. >> reporter: the house is expected to vote on the spending cuts tomorrow, but the bill will face tough going in the democratic-controlled senate. thousands of state workers in wisconsin braved the cold for another day, protesting a move

to strip their collective bargaining rights. republican governor scott walker has called for an end to collective bargaining for most state, county and municipal employees. the workers camped out all night in madison while a legislative committee meeting convened. many of the protesters gather in the capitol rotunda as the meeting stretched into the night. republican leaders said later they would make significant changes in the bill. and in florida, republican governor rick scott canceled plans for a high-speed rail line between orlando and tampa. he said the state could not afford the multibillion-dollar transit line. the project had been supported by president obama. in economic news, new data raised the possibility of inflation rising. the labor department reported wholesale prices rose half a percent in january, the most in more than two years. the housing sector also saw improvement. home construction rose at the fastest rate in 20 months, mainly from more apartments being built. on wall street today, the dow jones industrial average gained

61 points to close at 12,288. the nasdaq rose 21 points to close at 2,825. those are some of the day's major stories. now, back to jim. >> lehrer: and we return to egypt, and to jeffrey brown. >> reporter: in the first official accounting, egypt's health ministry said today that at least 360 people died in the 18 days of anti-government protests. a preliminary count that did not include police or prisoners. in the meantime, labor unrest continued, now including strikes by airport employees and textile workers, further crippling egypt's economy and prompting the military council ruling the country to send a text message to egyptian cell phones saying, "we urge citizens and members of professional and labor unions to go on with their jobs, each in their position." in response, one of the youth groups that helped organize the

uprising tweeted today: "strikes and protests should not stop." the group also promoted a planned march this friday to cairo's tahrir square, the democracy movement's main gathering point. and the role of the internet and social media as a means of protest and repression continued to be discussed worldwide. in washington yesterday, in a speech on worldwide internet freedom, u.s. secretary of state hillary clinton criticized egypt's government for shutting down cell phones and the internet during the protests. >> a few minutes after midnight on january 28th, the internet went dark across egypt. during the previous four days, hundreds of thousands of egyptians had marched to demand a new government. and the world, on tvs, laptops, cell phones and smart phones, had followed every single step. pictures and videos from egypt flooded the web.

on facebook and twitter, journalists posted on-the-spot reports. protestors coordinated their next moves. then the government pulled the plug. cell phone service was cut off, tv satellite signals were jammed, and internet access was blocked for nearly the entire population. >> reporter: in simple terms, what appears to have happened is this: internet users in egypt wanted to connect to, for example, facebook. normally, their computers check in with a so-called "routing table," a kind of address book for web sites around the world. once the computer finds the address, it successfully connects the user to the desired website-- in this case, facebook. instead, the egyptian government appears to have disabled the routing table so that egyptian computers couldn't locate and connect to web sites, essentially turning off the nation's internet. in a detailed, front page report today, the "new york times" reconstructed how the mubarek government was able to sever some 20 million people from the internet just after midnight on

january 28. and joining us now is one of the co-authors of today's "times" story: james glanz. also with me here in oustudio is michael nelson, visiting professor at georgetown university. he's served in the past as director of internet technology and strategy at i.b.m., and worked on technology policy in the clinton white house and at the f.c.c. in your story the james government xwhanded powerful instruments of control, it owns the pipelines that carry information across the country and out into the world. so in layman's terms. with what are those pipelines and what exactly did the government do to shut them down? >> well, usually we think of the internet as being everywhere and nowhere, something you can connect to no matter where you are and something that routes around damage. but when you control the pipelines you can actually shut the internet down, particularly if there are very few of those pipelines and in egypt it was sort of the revenge of the plumbers, if you will.

there were very few port portholes to the outside world. the government through its state-owned company controlled those portals and by shutting them down they severed egypt from the international internet. >> brown: as you wrote much of the traffic in and out of egypt was centered around one building in cairo. >> 26 ramsey street, you can call it up on google earth. >> brown: well, michael nelson, on monday night's program, our rulers know we looked at the internet and social media as a tool of the opposition, of the protestors. this is the flip side, isn't it? >> right. it's a way for the government to close down the coordination that was going on online. but paradoxically, it seemed to have had just the opposite effect. many of the people who were online sharing their ideas and debating what is to be done got mad enough at the government to get out on the street because they had even more people mobilized because the internet wasn't there. >> brown: have we ever seen

anything like this on such a scale? >> this is unprecedented in size nepal closed off the internet for a few days, burma. but we lad 20 million people online in egypt, four million facebook users and the economy that was incredibly dependent on the internet. a lot of the tourism industry yubz it is internet for booking tours and hotels. all that came to a stop. >> brown: james glanz, just to continue the explanation here, you mentioned the state-owned telecom company but there are private telecom carriers involved as well, right? and one, vodafone, apparently resisted the government's request at first. tell us about that. >> that's right. ultimately there was a sort of one/two punch. first the government shut down the portals to the outside world so that cut off the international traffic. then it turns out that the internet inside egypt depends on information from the outside world. you might try to send a gmail

message to your neighbor but that information has to go to california to a server there and come back. if it can't do that, the e-mail won't be sent. so you had a collapse inside egypt. at the same time the commercial carriers were called on the car pell and told to shut down and we understand at least one-- vodafone, which is based in london-- resisted and was told basically if you don't do this, we'll do it for you. and what they meant was your signals go over telecom egypt lines and we'll simply cut those lines. >> brown: michael nelson, it's still counterintuitive for moers of us, i guess. what was this... was this easier to do than experts thought even in james glanz' piece, you have experts trying to figure out how they did it. >> well, the story in egypt is very different. the internet really is designed so that no one's in charge and everyone's in charge. there's tens of thousands of subnetworks. >> brown: that's the story we

always hear. but apparently somebody was in charge in egypt. >> well, in egypt it's built on top of the old telephone architecture. so it's in a way like the u.s. was in 1990. in the u.s. there were just a few places that connected internationally and if you wanted to cut off the internet in the u.s. in 1990 you could have. today there are thousands of international connections out of the u.s. but in egypt there were just ten internet service providers, they were all using the same telecommunication network connections and thus it was very easy for the government to go and pressure those handful of companies and turn off the net. >> brown: and compare this with what we've seen in other countries. we've talked about what happened in china, we've looked at iran, we've heard reports ant now we're in bahrain and libya where governments might be looking at stuff like this. but what's happened... in those countries it was a sort of modified or slightly lesser version. in china, for example. >> couric: well, china designed

their networks so they can control the international connection. there's something called the great firewall of china and they are able to track the bits going in and out of the countryn't country. they have the challenge of monitoring 400 million users so it's not perfect by any means but they're much more sophisticated in what they've done. their goal is to really lock certain types of content, they also understand the huge economic implications of cutting off the internet like the egyptians did. >> brown: economic implications? >> that would be catastrophic for the chinese economy. they've developed a huge structure with hundreds of millions of dollars of investment to make sure they can monitor the traffic in a much more granular way. so that they can block specific web sites. there's even... the next step is to get even more specific and start targeting specific users so they'll be able to block what particular users are doing. >> brown: james glanz, what would you too old that? comparing what you looked gnat egypt to what other countries

are doing, especially other countries in the middle east. >> right. well everything i just said is true but it's always going to be the case that the internet information still has to cross in these grand exchanges whose number is smaller than you might think in the united states. there has been some thought to how sensitive the united states would be to about 20 phone calls. it's an open question. but in the middle east it's very important to realize that this architecture-- whether it's one dominant carrier-- with one or two fiber optic cables coming out of the mediterranean or red sea to provide international connectivity, they could be pretty easy to shut down and either there's a fear at the state department and elsewhere that either countries now are studeeing what happened in egypt or may already have their own plans in place to carry out a similar operation. we're seeing internet slowdowns in bahrain as protests go on and

reports of the same in iran. we're not sure whether that's related to this type of control or attempt to assert this kind of control but raising new concerns. >> brown: of course there are... i mean, there are sophisticated people on the other side, right? so is this inevitably kind of cat-and-mouse game as technology develops? >> definitely. and most of these countries the government cans block access 90 or 95% of the internet users. but the remaining 5% or 10% are technologically sophisticated enough, they have various tools that if the net is not completely brought down like it was in egypt people can get uploaded, they can share information. but what's interesting is what we've seen in iran and to some extent in china where ininstead of trying to just block everything, they're trying to generate their own context, trying to flood the zone, provide their own content that's pro-government. they're trying to put out messages like they did in egypt over the cell phone networks telling people that everything's fine, just go home, we'll take

care of? but this propaganda war that's using the internet rather than just trying to block the internet. >> couric: all right, we'll leave it there. michael nelson, james glanz, thank you very much. >> woodruff: next, we get another perspective on the debate over spending and budgets. it comes from vermont senator bernie sanders. he's the longest serving independent member of congress. he caucuses with the democrats, and he serves on the senate budget committee. welcome. senator sanders, first off, tell us what your main impressions are of the president's $3.7 trillion budget proposal for next year? >> judy, i've got a lot of problems with the president's budget. i think it's bad, but i think the republican budget is a lot worse and my job, along with other progressive members of congress, is to help create a budget which is fair and which

protects the most vulnerable people in this country at a time when the poverty rate now is higher than at any time since 1948. >> woodruff: so what would you do to achieve the? what changes would you make in the budget blueprint the president sent forward? >> that's a good question, judy. and i think the answer is you've got to look at what's happening economically in america and what that's about is our middle-class is collapsing, our median family income has gone down, poverty is going way, way up, and the gap between the very, very rich and everybody else is going wider. so i think before you look at budgets or how you deal with the deficit you have to take that into consideration. for example, the top 1% today earn more income than bottom 50%. 22% of every dollar earned in america and that gap is growing wider. meanwhile, what this budget includes are massive tax breaks

for millionaires and billionaires. so off situation the rich are getting richer, their tax rates have gone down for many, many years their effective tax rate right now people like warren but talk about this, at 16% is lower than at any time in recent history and yet we're giving them huge tax breaks while poverty in america is increasing. we have the highest rate of childhood poverty in the industrialized world for our children and we're cutting programs for those people. so the first thing we have to deal with is revenue and as a nation we have got to say sorry, the rich are getting richer, they're doing really well. our friends on wall street we shouldn't have to worry about. they've got huge amounts of compensation. we cannot continue to give huge tax breaks to the wealthy, cut back on programs for the vulnerable. so that's the first issue. >> couric: well the president has talked about corporate tax reform and he said in two years if 2012 he's going to propose laying all those tax cuts expire that were allowed to continue in

december. you spent, what, eight and a half hours on the floor of the senate in december in a protest against that. are you confident the president is going to let the tax cuts expire? >> no, of course i'm not. i mean, that's what the president said when he ran for presidents and yet when the republicans stood up to him and said we want to give more tax breaks, defend the bush tax breaks, essentially the president gave in. when the republicans said we want to lower the estate tax, judy, which only applies to the top three tenths of one percent-- these are not rich folks, these the very richest people in america-- the president gave into that. so the president may tell us he has this in mind but i think the record is that he has not fought for those principles. the american people want him to fight for those principles and i think what this whole budget debate is about is do we stand up and say no, we're not going to cut programs for those who need it? the other issue i think we have to talk about is in the

president's budget he talks about social security and he makes me a little bit nervous because i think as many of our listeners know, the social security trust fund today has a $2.6 trillion surplus social security can pay out every benefit owed to every eligible american for the next years. social security, because it is funded by the payroll tax, hasn't contributed one nick toll the deficit. >> woodruff: let me just interrupt you and point out, as you know very well, republicans are criticizing the president for not tackling social security. in fact, some democrats are saying he didn't embrace what his own fiscal reduction... deficit reduction commission... >>... recommended. >> that's correct. but that reduction commission was made up of a conservative democrat and a right-wing republican. of course the republicans have long wanted to privatize social security and destroy it. but social security has been the most important and valuable

social program in the history of the united states. it can pay out every nickel for the next 27 years at which time it pays out 78%. rough ruch but it's not tackled in this budget. >> you're right. it's not tackled but it's mentioned. in my view when you have 16% of our people who are unemployed or underemployed the that's the issue we have to deal with, not worry so much about a program which can pay out a nickel for the next 27 years. >> woodruff: i know you're concerned about the president's cuts in the low-income families home heating assistance. the president was asked about that at a news conference yesterday and he talked about the price of heating... of energy going down that makes it more possible to do this. but he went on to say yes, i'm frustrated. he knows people are struggling, but he said-- and i'm going to quote-- "my job is to make sure we're focused on the long term and the most important thing i can do as president is make sure we're living within our means, getting a budget that's sustainable, investing in the future."

>> well, if the president thinks the price of oils going down i invite them to come to the state of vermont. heating oil is going up, gasoline at the pump is going up. and if the president is concerned about the long-term sustainability of our budget, then he should not have caved into the republicans and provided huge tax breaks to millionaires and billionaires. i get a little bit frustrated about that. we're giving money away to people who don't need it and then we're really tough on students who are trying to get by on pell grants. you got the community service block grant-- you know what that is? that is the infrastructure by which we protect low-income people all over america. the president has proposed a 50% cut in that. so i think what the american people understand is that when we have such an unequal distribution right now you don't cut back on people who are hurting and give more to the people who don't need it. >> woodruff: what about those voices in the republican side and including the democratic party who are saying all of you in government right now need to

be worried to death about the fact that borrowing so much more than the country can... and so tough decision. >> absolutely, judy. you're absolutely right. you did not hear me suggest that it's not right. the debt primarily has been caused by two wars, unfunded, huge tax breaks to people who don't need it, insurance company written medicare part "d" prescription drug program and the bailout of wall street. the cause of it is not hungry children in this country or people who are sleeping out on the street, so we have got to deal with the deficit but do in the a fair and progressive way. for example, this year alone we're losing a hundred billion dollars in revenue because corporations, the wealthy, are slashing their money in tax savings in the cayman islands. this year exxonmobil, the most profitable corporation in the history of the world is not paying a nickel in federal income taxes despite having made

$19 billion last year. in 2005, one quarter of corporation... large corporations in america making a trillion in revenue didn't pay a nickel in taxes. you got a military budget which in many ways is still fighting to t old cold war. so i believe that we have to move toward significant deficit reduction but don't do it on the backs of the middle-class and working families who are already suffering as a result of this wall street-caused recession. want to know the way to raise money? put a transaction fee on wall street so maybe we can curb some of the speculation and raise some money. >> woodruff: we hear you and we're going to leave it there. thank you very much for walking with us. >> thank you. >> lehrer: now to the second of our bget stories. the obama administration defends its military budget before congress today. with u.s. troops still embroiled in iraq and afghanistan, the top leaders at the pentagon engaged today in combat of a different kind at a house hearing on the

defense budget. >> lehrer: defense secretary robert gates and the joint chiefs chairman, admiral mike mullen, went before the armed services committee. they agreed on the need for belt-tightening, but not at the risk of u.s. strategic interests. >> refrench. brought about by shortsighted cuts could well lead to costlyer and more tragic consequences later. indeed, as they always have in the past. >> lehrer: president obama's military budget for the coming

fiscal year includes more than $550 billion. it seeks another $118 billion to cover the costs of war operations. in a major cost-saving move, it calls for reducing the size of the army and marine corps, starting in 2015. that last item did not sit well with committee chairman buck mckeon, a republican from california. >> the savings apraerz to be generated with reductions to army and marine corps in the 2015 to 2016 time frame. the decision to reduce strength seems premature given the uncertainty in predicting the full range of force and manpower requirements in afghanistan after 2014. >> just three years ago we had 190,000 troops combined in iraq and afghanistan. by the end of this calendar year we expect there to be less than 100,000 troops deployed in both of the major post-9/11 combat

theaters. virtually all of those forces in afghanistan. that is why we believe that beginning in, ify-2015, the u.s. can, with minimal risk, begin reducing army active duty end strength by 27,000 and the marine corps by somewhere between 15,000 and 20,000. >> lehrer: the pentagon budget also cancels a second engine for the f-35 joint strike fighter, now under development. gates and mullen said it would save hundreds of millions of dollars. >> i cannot make sense out of this. it's two to three years behind, it's not going to compete, quite frankly. we cannot fortify second engine. do we have a fixed cost on this or will they be able to raise their prices ten years out? >> i actually think the... i think with the kind of production we're talking about, think come down.

we hope. >> lehrer: later this afternoon, the house agreed with that stance and voted to cancel the back-up engine, 233-198. a wave of republican freshman joined in killing the project. still, the pentagon leaders at today's hearing urged lawmakers to keep military spending in perspective. >> you have 18.9% of federal outlays which i might add is the lowest percentage of federal outlays for defense other than the late '90s, early 20000s since before world war ii and yet because we have a half a trillion dollars ten we must be part of the problem in terms of the nation's debt and the deficit. >> lehrer: for gates, this was his fifth and final budget presentation to congress. he said he's stepping down later this year. for more on the politics of military spending, here is newshour political editor david chalian.

this vote today to kill that second engine on that fighter jet, is that saying something that has changed politically in the house of representatives? if nowhere else? >> i think very much it does say that, jim. remember, let's start the broad picture here at the beginning of this congress when the republicans took over, the new house majority leader eric cantor said when talking about needing to cut spending everything's on the table, including defense spending. that was new in general as a republican-controlled congress or house. you didn't hear that from previous republican-controlled houses. so that was a new line of thought. what i... what was new today was having 87 new freshmen republicans in this house, many them were tea party backed candidates last year who went to congress with a single mission-- cut spending. these are not republicans that find the pentagon the pentagon sacrosanct and apart for this.

so they joined with the democrats, with president obama's stated mission of wanting to get rid of this second engine and put this over the top. it was only a year ago that the democrat-controlled congress actually continued... voted to continue to let this program live. this representative in congress with these republican freshmen which many came from the tea party process. >> lehrer: well, the other issue that was raised by chairman mckeon, should we really reduce the forces, the size of forces in the united states army, the united states marine corps? we heard what secretary gates... that's also... usually everybody is... wants more troops and the secretary of defense and for a joint chiefs chairman to say, okay, it's okay to cut the size, that's unusual, is it not. >> it is unusual but there's a political point here being made, too, that the white house is eager to get out there and secretary gates leaned into them a bit which is a lot of what they point to is the fact that

the iraq war has now unwound and they have been able to... they are able to bring so many troops home and they're not going to have these two huge act i have theaters. of course that was one of president obama's major campaign promises was to unwind the iraq war and that's why they're able to point to this as we may not need what we understand needed. but you're right, it's not something you usually hear from a secretary of defense nor is trying to control the spending at the pentagon and you hear the from secretary gates as well. >> lehrer: because not only this engine, the second engine, there's also a large amphibious piece of equipment that the marines want that it also is going to be canceled and there's opposition to that within members in whose districts these things are build, which has always been part of the equation has it not? >> well, now you've hit the nail on the head because when you're ear talking about defense spending, you're talking about debates that are far more parochial than partisan. this is not republican versus democrat and this is age old.

base closings we've seen over the years as well. this is where if you're from ohio and it's jobs and federal money in ho that you want to protect, all of a sudden your party label doesn't matter as much. so you do see that. you know government contractors to build a single plane, try to spread out all the parts across all the states and all the congressional districts for exactly this reason because they know the members will vote their parochial interests. >> so somebody says "hey, i'm all for cutting federal spending and yes defense spending is on the table, you bet it is. but that navy base is in virginia and i'm the united states senator for from virginia just to use an example. >> right, it's a flip on that phrase of "not in my backyard" you can't cut from there. as we said at the top here, jim. the new elements here are the tea party republicans that are part of this huge fresh plan class who don't necessarily feel that way. they are different strands of

members of congress who don't seem right now all that fearful-- at least a handful of them, and a significant handful-- to go back home and say "i voted against that even if it would have been good for our district because the overall spending from the country has to come down." >> lehrer: do you expect this to really take off? do you expect this to become... in other words, is the impetus, the political impetus beyond doing something about the deficit, doing something about spending going to change the way we do defense spending? >> well, a little bit, i would say. change it a little bit because, remember, that $78 billion cut plan that was put out by the... that you spoke to secretary gates about, those at you know are not real cuts, they're cuts in growth. so it means the pentagon won't be spending as much as quickly. but they're not actual real world cuts, so do i think it will have an impact, >> do i think we're about to change the way we do business? i'm not convinced just yet. >> couric: david, thank you. >> sure.

>> woodruff: finally tonight, mexico's deadly drug wars. yesterday, the conflict took an american victim from the u.s. immigration and customs enforcement agency. special agent jaime zapata was part of an expanded american force working with mexican authorities in the ongoing battle. he was shot to death by gunmen on a highway from mexico city to monterrey. a second agent was wounded. but the worst-hit city in the drug battles is to the north, ciudad juarez, on the u.s. border. bill neely of independent television news reports on the drug war there. >> reporter: death is just around the corner, and he knows it. the streets of juarez are deadlier than any on earth, its suburbs and its center the scene of daily slaughter. ( gunshots ) midday in a middle-class area, and mexico's federal police fight seven gunmen from a drug cartel.

it's not unusual; 60 people die here every week in a war that makes baghdad and kabul seem tame. death is measured in massacres-- seven here, four there, 15 in a house, ten in a ditch, executions, beheadings, brutal and gruesome. the victims are mostly young men from two drug cartels battling for control of this city and of the billion-dollar drug route to america. three more killings here, and already this year is on course to be even deadlier than last year, when more than 3,000 people were murdered in this small city. it's not just bullets, it's car bombs. it's a war in which the finest forces mexico can muster are struggling against well armed cartels.

he didn't want to give his name or show his face, but he is a cartel hitman in jail for killing two policemen and a drug rival, and for turning juarez into a battleground. >> about three years ago, it was calm. from three years ago, now, the war starts. >> reporter: and it is a war? >> yeah, it is a war. >> reporter: is the government winning this war? >> no, they're losing. >> reporter: how will this end? >> somebody wins, either side. >> reporter: so the killing will continue until one side kills enough people to win? >> looks like it. >> reporter: they even murder each other in jail. a one-day battle between rival cartels here left 21 men dead. the government sent 10,000 federal troops and police to juarez, tried to crush the cartels. it's failing to stop the bloodshed.

the man who heads the deadliest city on earth is on the defensive. >> juarez is not what you say. is not worse than baghdad and beirut. >> reporter: there are more killings. >> no, sir. >> reporter: is your government winning this battle? >> oh, yes! sure! sure! when you lose hope, you lose everything. we are winning the war. >> reporter: but you are losing lives. >> well... >> reporter: it's america's demand for drugs that fuels the killings. the u.s. has spent billions on border security, but the cartels' drugs get through and the war for the u.s. market grows. nothing seems to stop it in juarez. 16 teenagers were murdered here at a party, including two brothers. their mother confronted mexico's president. he tried to reassure the city. "you are not welcome," she told him. "you are not stopping this. it's just getting worse." that was last year, she was right.

it did get worse. "i have lost both my sons and i have lost hope," she says. "i don't see any solution. the government's losing, innocents are dying." ( gunshots ) juarez is the worst but just one of many mexican cities at war. 35,000 lives lost, most in the last two years. along with its people the city is dying. the government hopes to make it the showcase for its campaign against the cartels. instead, its a city of ghosts and plaintive songs, the most lethal place on earth where the war has no winners. >> woodruff: we'll have more of bill neely's reports about mexico's drug wars in the coming days. >> lehrer: again, the major developments of the day. egypt-style anti-government protests spread to more arab nations. riots erupted in libya as police fought anti-government

protesters. two people were killed in yemen when police opened fire as thousands demonstrated. huge crowds of protesters turned out again in bahrain, home to the u.s. fifth fleet. and in wisconsin, thousands of state employees rallied for a second day against efforts to strip their collective bargaining rights. and to hari sreenivasan for what's on the newshour online. hari? >> sreenivasan: the 2012 budget is among the government's this year, find that and on our blog. our science unit examines what it takes to restore ancient artifacts after would-be looters broke into the egyptian museum in cairo during the protests. plus jeff talks to an editor from "publishers weekly" about the bankruptcy filing by borders bookstores today. that's on "art beat." all that and more is on our web site, newshour.pbs.org. judy? >> woodruff: and that's the newshour for tonight. on thursday, we'll look at the options for fixing social security.

i'm judy woodruff. >> lehrer: and i'm jim lehrer. we'll see you online and again here tomorrow evening. thank you and good night. major funding for the pbs newshour has been provided by: >> every year chevron spends billions with small businesses, that goes right to the heart of local communities, providing jobs, keeping people at work. they depend on us. the economy depends on us and we depend on them. :. you can't manufacture pride, you find it in the people at toyota all across america.

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u forget it. now he tells us. how far am i off the floor? about twelve inches. twelve whole inches?