captioning sponsored by macneil/lehr productions woodruff: good evening, i'm judyoodruff. prident obama met with mmunity bankers today. >> brown: and i'm jeffrey brown. on the newshour tonight: t president calledor increased lendg to small businesses, and sound financial relation. >> woodruff: we'll exane the troubles fing small bankers across the cntry. >> bro: then, big bill, big money: the lobbying behi the health ce reform effort. >> woodruff: an encore lk at another john merrow's reports chronicling the chalnges facing theublic schools in the nation's capital.

tonight, the plans to close schools and fire office rkers. >> what we have heres a takeover. it is not reform. its dictatorship. >> that's right. brown: the threat of cyber crime, and what cabe done to fend against it. woodruff: and the story of picture perfect gis for military filies this holiday season. >> this is a minor thing i'm doing fothese people who are dog a huge amount for us. >> brown: that's all ahead, toght's pbs newshour. major funding for the s newshour is provided by: >>his is the engine that connects abuant grain from the american heartland to haran' best selling whole wheat, ile keeping 60 blion pounds of carbon out of e atmosphere every year. bnsf, thengine that connects us. >> what kes us an engine for the economy?

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and... this program w made possible byhe corporation for public broadcasting. and by contrutions to your pbs station from viewers like yo thank you. >> woodruff: small banks took their turn inhe presidential spotlightoday. presidenobama invited representatives of a dozen institutions to thwhite house to hr their concerns and to make a new appeal. e president sounded a famili message t with a friendlier tone than he h for big banks la week. he tola clutch of community bankers, more lending ishe key to recovery. >> there remains enorms opportunities as wcome out of this receson for businesses to start growing again and totart hiring again. and everything that 're going to be doing here in thwhite house over the nexseveral

months is going to bgeared towards catalyzingnd spurring additional lending, partularly to small businesse because we feel very optimistic that e wot is behind us and that now is the time for uso seize portunities. >> woodruf the nation's 8,000 small banks make me than half of a small business loans under 00,000. but ey face precarious times. so 140 have been forced to close this year, the mt since 1992. and thfederal reserve reports their total loans ardown 8% and like to continue sliding nextear. the president de clear again day he thinks most of the blame for all of thiwith big banks. >> i thi it's fair to say that most of the community banks were n engaged in some of the hugely rky activities that helped to pripitate the finaial crisis. >> woodrf: to ease that

cris, the administration plans to pp $30 billion into a new small busiss lending program. and e fed has tried to help by holding interest rat at practically zero. don gieogio at unid northern mortga bankers in levittown, new york, says business uld be even worseithout the intervention. we are now ableo lend becausthrates are low so it is helping to make up for l the other peop that we cant le to because they have to repair their credit. so those low rates a helping to keep open. >>oodruff: in brighton, lorado, donna petrocco's family has been in banng for 40 years. and like many in her busess, she argues t real problem is red tape. >> things ha changed, the economic conditionhave changed, rulatory burden has changed, requiments for reporting have made nking a whole lomore difficult than it used to be. >> woodruff: petrocco ys the prident is urging banks to lend more, but regulats are holding th back from finding new customers.

>> i can't loan to thebecause field examiners, ourocal government, has said i can't make them loans. >> reporter: what do thetell you why you nt make those loans? >> becse i have too much real tate secured loa. i have too much in land developmt and construction loans. >> woodruff: at today'meeting, mr.obama acknowlged some regulatis may indeed be getting in the way. >> we are looking see if there arpossibilities to cut me of the red tape. we don't have direct influce over our independent regulors. buwe think that the more that we can highlight tt in some ways, the pendulum may he swung too far in the direcon of not lending after a dece in which it had gone way o far in the direction of gettingoney outhe door, no matter the risk that if we can get thabalance righ that there are businesses and communities out ere that e ready to grow again. >>oodruff: small banks hope the president'push to overhaul

e financial regulatory syste ll help. that's in sharp contrast t larger banks, which rein stronglypposed to reform now moving throu congress. for moren the meeting and the state of community ban we turn to: mattw gambs, he is chief executive ofcer of diamond bancorp in shaumburg, ilnois and attended the whiteouse meeting toy; and karen shaw petrou, managing partnerf the consulting firm federal financial analytics, wch advises the fincial service industry. good to ve both of you with us. we appciate it. matthew gambs, as we sai you were in that meeting today. the presidt went in or what he said to the cameras was that this was all out gettinsmall banks to loan more to businesseshat need it. did he make the case >> he did. he wenaround the room. it was a very... a conversation more than a meeting. he wt around and asked every rson, the 12 from around the country. what i heard was evebody has a little bitifferent circstance.

some places have aot morlon demand than others but tre sn't anybody who was saying th were absent of a willingness to t. i thought your piece sd it really well. community bankers,he banks under billion dollar in size this is what we do. woodruff: so when the prident says banks your size ed to lend more, that the money is not enough... not enough of that mey is getting t there, is he right about that? >> he is. i would say iny case in northern illinois, we increased our coercial loans by 55% this yearto $92 million. it's never been a tter time to do some of that forome mpanies but there are challenges tt are on community banks do this. we are small businesses. we don't have large affs. we are spending a lot of our time dealing with her issueswe can't go out and find n businesses to lend money to. >> woodruff: karen shapetrou, how ch demand is there for loans rit now? >> there's lesdemand than there was because the econy... when you're in a recsion, peoplere hunkering down and

t expanding. but that isn't to say there isn't demand and sma business lenng in particular would help to start some seents of the economy if there were more crit available thanhere is right now. >> woodruff: how much more rooms there for the small banks li mr. gambs' bank do more? >> it's a balancing ac because as one of the...he bankers in t piece pointed out, there are probls in the small nk sector particularly in commercial real estate. and the problem often in sll banks is that they he all their eggs in one or may two basket in one of them is fragile, the ba can be fragile too. and we learn the hard way in the s & l crisis that wh banks are trouble u need to be really carel and not let them get in any deeper so 's tricky balance. >> woodruff: mr. gambs, how much... why has. why have small banks gotten so much to commercial real estate

because we read that ia big area. the shoes left still to drop in that area. >> wn you think about it, it makesense, right? i live in chicagwhich i have the luxury of being a divee economy. weave manufauring, most of what i do is in cni nding, manufacturing, theeople own the buness. woodruff: i'm sorry. cni. >> commercl and industrial. lines of credit, eipment. en you think of people who make sff. i say if you cou punch holes, bend metal we an money to you. now that's expanded to peopl who design cloes or people who ba cakes. trepreneurs have a wonderful spirit about them and th fill really well io community banks but ere i grew uin western colorado predominantly you did two things. you built homes or y lent money to restaurants and bar so, you know, ifhat's what you do in your town,hat's wh you do. i think you ar from bankers who said thas what the woman in brighton, colorado, if you'rehe front range of colorado it'not surprising toear that. it's also economies of scale

if you only have.... woodruff: is that the balance that ken petrou was ju describing? i think as you grow your institution ifhat was the only thinghat was going on in your ecomy, your economy wouldo that. noifferent than if you were a nker outside detroit michigan not surprising th you're probably concentring on peoe who build things in the car instry. >> woodruff:aren petrou, if that'shat's going on, if you do have cleay some banks doing well but otherin hot water, what ithe remedy here? the white house is sing, lend more. we'd le to see the regulatory agencielean on you little less. >> it's a balancing act,s i id. it's important to remember that banking isn't le any other buness because we back it wh the fdic and with other supports through t federal reserve. so when bas take risks we as tax payers te risks alon with the rt of the economy. and the present, i think, recognizes that to courage more lending needs tbe very

carefulldone so that banks don't go o too far and expose themsels to losses which they can't absorb. >> woodruff: is thatomething that a bank like yours is ab to do? >> i think tt never before, u know, i think you've found in the last o years who is good at this and who isn't you know, it is a risk business. i mean thas why we charge terest. that is the elemento it. but when you have ner had a situation where so my people are failg at once and if there is not a place forhese loanto go, i mean you're caughtn a situation now where you' identified the problebut there's not a reme to that problem. so now that'where we're kind of stuck. given those choices think what the president is king us to is to accomplish, i mean, he said it ithe top of the piece of his statement. never has there evereen a beer opportunity to do this. as a community banr i look at the landscape now andery excited out the opportunity. >> woodruff: if that'she case, kan petrou, what is to stop these bankers fm doing exactly what the presidents

asking? >> where there's opportuni they should go for it. i think e mmunity banking franchise is a terrifione. you ow your community. nobody knows it tter. you can do tngs that the big banks cat but you have to do it carefully. small banks need risk management. some don't havit. they need internal controls. some don'tave it. they need discipline. so don't have it. anthat's where i think we have to be careful. theconomis not out of the woods yet. taking ris right now is daerous. >> woodruf when the president id today thathe regutory pendulum may have swg too far, we heard him say in t direction of not lending, how can the wte hous persua the agents, the regulatory agencies to pull back? they don't have direct overght over these agencies. >> tt's a good thing. we d't want politicians lling regulators whom to favor when. th should be a disciplined decision based on re risk

not sht-term goals. i know their policy oectives here. more lending is a very importanone but we need to be really really careful. >> woodruff: what do y look for, matth gambs, as somedy who is out there on thfront lines, what do you look for fm this administration and from the regulatory agencie >> consistency. you hear thia lot. you fearhat your regulators are saying one thing and y hear the preside of the uned states say another. you ow, we recognize or i recogne that i'm in a regulad business. i recognize the fact tha there's responsibility that i have to the communities at we serve. but we are a for-profit institution at the e of the day. i me, we have a sponsibility to our shareholders to givehem a return. the pendulum that he was talking about swings so dramaticly to a point that small busisses can't afford this, thrisk management , e toolthat you would have to do just to undstand it. th's what we talked a lot aboutoday. be consistent noasking for something specl or to be

treated any fferent but cognize that our challenges might be a little fferent than citanks or chase's. given e right opportunity we can prably get the job done fast than anyone else in the marketplace today. >> woodruff: how realistic i that, karen petr? >> i think it is realisticor somenstitutions. matt's is a great one. there armany othersut there but we dhave some very, ry weak community bankwest maybe a thousand of them. we have a lot troubled bankout there. those are the banks need to watch with care and not courage them to go out too far too fast. or that the fdichich is alady in tough condition will have even more loes. none of can afford tt. >> woodruff: a wd of warnin karen shaw petrou, gd to see you and tthew gambs, we appreciate you joining us. thank you both. >> brown: now, f the other news othe day, here's hi sreenivasan inur newsroom. hari. >> sreenivasan the end

appearedn sight today for the us senate afr 25 days of debating heth care reform. newshour health rrespondent betty ann bowser rorts. >> reporter: it was the ne debate-weary senors had been waiting to heafor weeks. majori leader harry reid annound late today, the final vo on the democrats' health careeform bill is set for 8:00 am on christmas eve. the yays and nays are mandatory under the rule the clerk will cl the roll. >> repter: the word came hours after democrats prevaid again on 3 mortest votes by a 60 to 39 margin on eh one. following those votes id addressed the rancor that ha own as debate moved closer t christmas, urging bothides of the aislto "try and get along". >> mr. president, i said aft the senate opened today, and ll say it again, because of thlong hours, there is a lot ofension in the senate and elings are high.

an that's fine. everybody s strong feelings about what we've done and wh have left to do. but, i wou hope that everyone would go back to their gentlemanly ys. >> reporter: replicans had used every procedural neuver in their play book to slowhe bill down, at one point pushg final action tchristmas eve night. theyelented today to accelerate the schule, but they kepup their criticism of the bill itself. south dakota senator john une. >> this is not over yet. they may have 60 ves today, but it a long ways from the finish line. and the american peoplare going to he the opportunity to weigh in when ery one of our senators goes home ovethe holidays andears directly from them. >> reporr: at the white house this aftnoon, president obama said he's delaying his plaed holiday in hawaii, as he aits nate action. >> i will not leavuntil my

friends in the senate have mpleted their work. my attitude is if they're king thessacrifices to provide healthare to all americans, the least i can do is pride enuragement and last minute help in the meantime, democrs >>eporter: in the meantime, democrats defended the dealmang they had to use to coral the 60 voteshey needed, for passage, the chaman of the health committ iowa senator m harkin said: "the principl of this bill oveides everything." >> sreenivan: tomorrow night on the newshour jilehrer will have an ierview. republicans have picd up another voten the u.s. house. freshman democrat parker griffith of alabama anunced today he iswitching sides. he opped the economic stimulus package and health car legislation, andad one of the mo conservative voting records of any houseemocrat. democrats still contl the house by a subantial margin.

in enomic news, re-sales of existing homes soared in november to the higheslevel in nearly three yrs. the national associaon of realtors sd it was due to w mortgage interest rates and a federal x credit. the hoing data helped wall street rally. the dow jones dustrial average gainedore than 50 points to close near 10,465. the nasd rose 15 points to close at 2,2. negotiatio intensified today for a prisoner swap between israel and hamas. the islamic militant grouphat les gaza has offered to release israeli army sgeant gilad shalit. he was captured more thathree years ago. in tn, israel would free 000 palestinian prisoners. but hamas complain the israelis werdragging their feet. >> this deal has vario ascts and the resistance is working on them but i n tell you th the ball is in the iselis' court because of eir stubbornness and not acceptinthe conditions of our brothers in the

sistance. >> sreenivasan: offe and counter-offe went back and forth thugh german mediators. and israeli defee minister ehud bak said getting shalit backas a "top priority". >> the israeli goverent and certainly we who sent e chief of staff and i vieit the utmost ethical and commd obligation to make any reasonablend possible move in ord to bring gilad home not any price but any possle and reasonable move to bri him home. >> sreenasan: wire service accounts said israel has bald at releasing pestinians convted of killing israelis. a heavy dust storm in e western u.s. tay triggered a fiery hiway pileup. at least foupeople died in the burning wrecge on interstate 10ear casa grande, arizona. one of the vehicles s a tanker tructhat exploded. several people suffed severe rns. those arsome of the day's maintories. i'll be back at thend of the program with a pview of what youl find tonight on the newshour's website. but for now, bk to jeff. >> brown: and still to ce on the newsur: making tough

decisions inhe washington, d.c. schools; shing up computer nworks and fighting cyber crime; and sending holay photos to u.s. tros overseas. that follo a conversation about the big money behi the health care reform legislaon. gwen ifill has o look. >> ifill: when the senate vos out s version of health care reform thursday moing, hundreds of millions of doars will have be spent lobbying for and againsit. the center for resnsive politics finds the hlth care sect spent nearly $400 million on the effort duringhe first nine months of ts year. th includes lobbying congress, federal agencies a the white hoe, high-priced persuasion practiced byospitals, doctor oups, nursing homes and othe players. not included in thatigure: another 22 million spent by the insurancindustry during the same period. r more on how the money was spent and wh results it did or did t produce, we turn to dave levinthal of the centefor responsive pitics, a not-for- profit group that tracks mon politics.

nice to have you here. some peoe say unless you're the table you're on the menu and that what drives loyists to do what they do. how ch money was really spent and on what? >> orall, you've had $2.5 billion spt on lobbying in neral. and a od portion of that has been spent on health car refo legislation. it's just taken so lg for this to develop. months and months anmonths. you've had so many diffent entities that have had an interest in it. you talked abo health care, but that industry alone just only one ofhe several industries that havectually spent moy to lobby the federal governme. the u. chamber of commerce, for example,as spent a ton of money potentially tens millions of doars on health ca reform. when you add it all , it could potentially be one o the most if not e most biggest lobbyingfforts ever on a sgle piece of legislation that the united states has ever seen. >> ifill: how doest compare?

the has been big big lobbying efforts in washinon on trade and on ficit reduion even. on all kinds of issues why is hlth care so much more expensive? >> youould go defense, tort reform and even the heal careobby of 1994. what's happed this time though is you've had piece of legislation that lirally nce barack obama has come in office has been in play. the ise certainly has been. when youave so many different enties that are vying for a piece this pie, are ying to control the trajtory of this legislation, are tryingo insert this or take out this and in t ocess lasts literally a year that's when u have these dollar figes that are really unprecedented. >> ifill: what dyou get for that mey? if there'shis much money floating around in wasngton presably being spent on varying ings what do they buy with it? access. acce is critical in this. if y come to the door of the capitol anyou knock on it and you don't ha some money

in yr hands often times you're not goi to get allowed . if you do me in and you have, for exple, working on your behalf forr members of ngress or former high-rankin congressional staffers tt's certainlgoing to help your case. so many chripts who ploy lobbyists are hire bei people who have workedn congress before becae they know the syste they know the players. and they are intimaty faliar with the issues so all three of those this put together are very expensive but they also n definitely pay divinds for the people who are ring the lobbyists. >> ifill: at is inherently wrong with that? isn't that what we're suppos have, people who represent us, people who speak for uin waington and places where power is practiced? >>ell, if you pull out your copy of the cotitution or go online and look itp, it says in theirst amendment of the constitution that you havehe ability to petitn your government f redress of griences. well, what doethat mean? that means that u have the right to lobby.

by that, of course, most people would aue that at ast at its face value that theris nothing wrong with lobbying. but wh the founding fathers probably didn't anticite when they were writing the constituti is 3.3 billion dollars spent on lbying as was thcase in 2008. you have a situation where a lot of peoe feel ke lobbyists and the peopleho hire lobbyts, really they have taken or the process. if you're sitting at he in nebras or california or new yorkr florida and you don't ve health insurance, if you don't have two dim to rub togeth, then you're going to be in a much more comprosed position. you're going to be complety unable when itomes down to it to lobby the level that a, pfizer is lbying at, the chambeof commerce is lobbying at. any of these large compaes that are speing millions of llars to lobby. >> ifill: some voices t heard and me don't. >> the richest voices get heard. the voices that are alread poweul

, that are already very strong in this deba and they're becoming er mower so because of the money they ve to put behind their effort >> ifill: is tre anyway to draw a reay clear line tween the money that is spent and action that happen actually in the ll, somethinthat lives in this bill that wouldn't otherwi live in , things that are taken out because lobbying money is spent? >> o issue that's come up just irecent weeks in earnt is the issue of, for exampl prescription drugs om foreign nations. and this hasecome a big issue for a lot of peopl because they very ch would ke to be able to buy their drugs from canada israel or mexico or her countries, european union and get them at a much ruced ratehan they would if they were buying them at the drugstore in the unite states. and the pharmaceutal compans came in and said we have grave ccerns about the safety of these ugs. that may be a very litimate concern. the ite house said it may be a legitimate conrn but a lot of people e thinking, no, this is not what ts is about. this is about profit. profit mote. if people are ableo buy

drugs at $20nstead of $200, then your large phmaceutical coanies are going to be losi a lot of money as a result of that. >> ifilllet me give you another example. we'vbeen hearing a lot this week about theast-minute deals that were cut on capol hill and bacroom dealing to get the 60 votes for ts heal care reform bill. hodo we know or how do you prove that any of that deali that went onad anything to do with whatobbyists were... the pressure they we exerting a how much of it was just a senat from montana representing the sma hospitals in his state becau they are his constituents? what's the difrence between the small hospital associatio speaking to him and getting this ohim just reprenting his constituency? >>ltimately sometimes you don't know what e effects have actlly been by the bbying efforts. at's because the laws as they aren the books right now ashey're written by congresstself doesn't allow you to find out, forxample, who haactually lobbied whom. if you want to find out,or exple, if a lobbyist for a

large health-ce firm has gone in and spokeno max baucus or joe lieberman this senatorr that congssman, you're not going to be able to find that out because it's not federal required forhe client of the lobbyist to disclose that. >> ifill: do that lack of trsparency automatically suggest malfeasance any bad action? >> not at all. we wouldn't suggesanything ofhe sort. but wh lack of transparency does is gets people less inrmation to draw nclusions from. unrtunately, we can't see exactly what the interacons have been in the entire tee as far as we're ncerned if there's a ck of transparency orot as much transparency as is possie when these very important public pcesses are taking pla and public decisions are being made, th the puic has less information to go on. >> ifill: there's nothing illegal about anytng that we're seng that you've been able to chronicle? >> it's not an abraham off situation.

and congress to its credit i 2007 tighted its rules to make sure there was more transpency and in a lot of people'spinion did a great job making sure that tse types of travel and ips that were being taken andavishing congressmen with this and at would be done. but, yeah, there's still a long way to a lot of people uld feel. >> ill: the center for responsiveolitics, dave leaven thaul, thanksor joining us. >> thank you brown: for the record, we invited several heal care lobbying gups to join our conversation, but ey declined. a spokesman fothe pharmaceutical industry tolds they opposed rimportation of drugs for a numberf reasons including coerns over counteeiting and tainted products. he said: "there's way for the f.d. to guarantee the safety and efficacy of medices brought into t u.s. outside of s control." and he added the iustry's "prots are necessary to fuel research and developme of futureedicines." >> woodruff: now the next chapr in our series on changing the public schools of wasngton dc.

is week, we are revisiting a fereports filed by john merrow, the newshour's speal correspondent r education, onhe ups and downs of chancellor michle rhee's effortover the past three years. tonit, we go back to february 2008 a point at which rhee encountered resistan to some of her plans to move faster. what do we want? our voices heard! when do we want it? now! >> reporter: unions in shington dc are upset with schools chancellor michell rhee. >> what we have here it is n reform, its dictatorship! >> reporter: parentsave their problems with her, too. >> reporter: even grandparen are gry. >> i'm telli you, you are not interested in real iut from

parents >> reporr: what goes through your head, when there , pele are yellin' at you likthat? >> i don't takthat personally. those people feel ssionately about their schools and abt public educati, and, frankly, we need more of that. >> repter: she's likely to get moren the months ahead. michel rhee came to office in june promising to make washington dc a natial model of uan school reform. now, seven months in the job, her contversial plans to close 15% of the city's schooland fire centralffice workers at ll have stirred up a storm o protest. that raises a question: is michelle rhee tryi to do too muchtoo fast? >> the te for dramatic change beginsoday. >> reporter: this n doesn't think . washington's mor, adrian fenty hireher.

>> the person who says tt they're gointo come in, shake things up, change the system challenge the status quo, at's exactly what i wan because i don't want to beayor of the >> reporr: rhee wasted no time getting started. weeks before t first day of scol, she discovered thousands of textbooks and splies - not in cssrooms where they belonged, but gathering dustn a warehouse. she got them delivered t schools in time for openinday, and then went after the causof the problem, t district's centl office, long criticized for its inefficiency. rhee asked the city counl to pass a law giving hethe power to fircentral office employees at will. >> for cldren at the classroom level.

>> reporter: but pushback againsrhee's proposal was immediate. at city uncil hearings, five labor unions spoke ainst the plan. >> i come before you as an vocate for the more than 4,000 teachers thawe have in d.c. public schools. >> reporter: even thou achers would not be affected teacher union president orge >> reporter:ven though teache would not be affected, teacher union presidengeorge parker joid in. >> wbelieve that all workers shou have due process rights. i think the chancell's legislation rehes a little too deep. >> reporter: do you thk chancellor rheis in any way ti-uon? >> l me say this. her statements in the st have not beenery favorable to unions. >>eporter: rhee's request for the por to fire office employees at wl became an ongoing battle, one th the city councilouldn't decide until nuary. in the meantime, rhee ckled another complex probm: a deficit of $100 miion.

>> we spend more p pupil than almo any otherrban jusdiction does. and that's parally because we ve a lot of our resources an money going into facilits that are quarter full or a half full. >> reporter: ithe past 10 years, enrolent has dropped by 27% for example, this schoolas ilt for 400 students. it h 83. >> swe're essentially running twice as many schoolas we out to be. >> rorter: based on studies of enrollment decline and neighborhood change, re's officeeveloped a plan to close 15% of the schools und her control. she wanted to info council members about her pl before going publ, but someone leaked the list, and so t council read abo it in the washington post. what did tt do to you and to this plan and to your relatis th the council? >>essed everything up.

hold on. let me finish. >> reporter: rhee schedule six eks of community meings to give people a chance tvoice their opinions ofheir plan which would require transferring about 5,000 students to dierent schools. but many felt thmeetings were too ltle too late. six weeks, especially when are the christmavacation, is not enough timfor a serious process of gting parental input. ( applause ) its not engh time for council members to deal with ts. i mean that's prty much a gut issue in the communi. >> reporter: michael ian education policy anast. >> my sense is they have be a littleit more careful in the future in terms getting

by-i from some of the interests. elings are bruised, uh, in t community. i think there's growing,h, resistancen the city council. >> this is nonsense. >> reporter: the unions saw is as their opportunity. with the city council te on rhee's legislation to fi central office workersast approaching, a coalition od.c. labor unions spent $20,0 on a radio campgn linking that sue to the school closings controversy. >> the motion passed. >> reporter: the citcouncil gave re the power to fire ntral office employees at will. rhee and fentyere not surpsed. rhee and fenty were not surprised. >> obviously peoplsay, "you're

movingoo fast. you're ting to push too much right now." and those peop we respect theiopinions tremendoly. but when youe out in the neighborhoods ofhe district of combia talking to regular people, they're saying"you know, go faster. fix things. doore. >> reporter: the city cocil, saying, "slow down." mm-hm. >> reporr: the union saying, "hey! slow down." >> mm-hm. >>eporter: certainly have some parents, not all, ybe, but some parts, saying, "slow down." you have mor adrian fenty ying, "faster. faster." >> hundred miles ahour. that's whahe likes to say. >> reporter:nd its the speed rhee prefers. >> i'm living what i think education reformers and rents throughout ts country have ng hoped for, which is, somebody will just come in a do the this that they felt was right, and everything elsee damned. >> so far, so good. but there are storm ouds gathering. and they ought to be cognizant of those storm clouds,nd not underestimate th. >> reporter: the srm is

brewin have you de anything that you regr? >> y know, i'm a very unusual person in thatin my entire life, i don't have any rrets. >> reporter: recently, re announced that six of the 23 schools she had intended t close woulbe spared, but she ded four new ones to the lis >> woodruf that report was ck in 2008. michle rhee has closed a total of 25 schools so farnd plans to cse another next year. but her battles withhe union e not resolved yet. d we'll see more about how that playeout whenohn's series connues later this ek. >>rown: next, thefand curity in cyberspace. a frontpage story in today's "wl street journal" details a computer attack against financial giant, citigro, that y have resulted in the theft of mlions of dollars. the company has denied the attack took place. but the journasays the fbi is

vestigating and linking the crime to a russian cyber gg. and in wasngton today, president obama named a w national cybercurity coordinator. howard smidt will oversee the gornment's efforts to secure its own computers anwork with companies in the private secr. we look at all this now,ith: and james les, director and senior fellow of thetechnology and public policy"rogram... at thecenter for strategic and international studies"ere in washington. >> brown: let's start with t reportf the attack on city group. not a lot of details wdon't know here. how comm are attacks on financial institutions? >> they're more frequent tn you might think. 10 to a year is one number i've heard. about inhis range. you know, million, maybe moremaybe a little less. this is nothat unusual. >> brown: this case they're talking about, there pointing tthis russian cyber gang. wh or who is that? >> you know, the rusans have some

tremendously skillful haers. crip to goafer mathematicia, not a lot of workhere for a while in russia. so lot of them went into hacking and e main reason u find them in the former soviet union is becausit's a sanctuary. they're t going to be arreed. sot's a beautiful crime. lots of moy. no risk. >> brown: no risk because there's body trying to stop shut it down. >> every once in while one of them gets caught. the main rule you ve to know you're a hacker in russia is d't take vacations in the west. >> bro: in this case, in the rert, supposedly it took placover the summer or before. how do these thingget found? w do they get stopped in. >> you know, if theyome from overseas, me u.s. government agency, whether it's the b.i. or nsa, will see them cong in. one of t problems we have is that n.s.a. is the best at monitoring traffic fm outsidfrom foreign sources.

but th prevent our laws prevent em from intervening. inhis case it was discovered while it was in progss but too la to stop. >> brown: to stop it, was it easy or ha? >> wdon't know if it was citibank but wdo know that some large banwas hacked this summer. to stop it is relative hard becae these are very skillful crinals. they've taken weeks ifot months to prepare. >> brownhow do they fit into this larger universef hackers or thieves? i mean is this world expanng orre people getting more sophisticated? is i in fact, a range of sophistication froamateurs up to real prossionals? >> younow, i don't even worry out the amateurs ymore. the top the league are tion-states. untries that are hostile to the u.s. and enge in cyber espionage. fabulously skillful. lots of moy. secondier are the sort of high-end cyber crinals we've seen ithese bank incidents

very often from the form soviet union. so very skillful. not as good the big countrs but up there at the top of the league. it goes downhi from there all the wadown to some kids. but e of the problems we have is th it's getting eaer to do this. if you saw the story lasweek about someon an insurgent in iraq, who bought some ofthe- shelf software and wasble to hack into u.a.v.s,hat's the path we're on. >> brown: now e white house announcement today namin howa schmidt to head the cyber security effort. what exactly should he..what does a person ke that do? what ds that job entail? >> howd has a real opportunity here. his jois pick one. he's the conductor f the orchestra. he's theoach for the soccer te. his job is to coordinatehe efforts. ere's been some good efforts in the last few mont undertaken by the obama ministration. at defense, at f.b.i., en at state. >>rown: is that the team or the orchesa members to use your analogy?

who is he coordinati? >> throw in coerce and you have pretty much the l. 're talking about the nationalecurity agencies, the technogy agencies, and they're the people whore trying to co up with solutions. howard needs to make sure th the solutionare consiste and implemend coherently. that's big job. >> brown: and how tough it to core rail that bureaucrac of diffent players. >> it depends. if the preside is behind him, he'll be able to do it. so that's the main thing tt has to ce across. this is a presidential priority. i think it is. it's still going to be hard. encies don't like being reeled in. this is e normal drill in washington. i think he'll be able to pl it o. >> brown: in fact, predent obama had talked abouthis dog this as early as may and then there were ports that it was taking a while to fil the position or figure out who the person would rept to. >> the's a dispute in the white house and in t administration i think that slowed thgs

down. some pple think it's best to leave the inteet alone. let it be the wild west. t it continue to have a limited role for goverent and the intern community will find its way out of is prlem. don't happen to agree. i'm not surehere howard comes out this. >>rown: why don't you agree? >> because we've tried lting the internetommunity sve this. wee tried seeing if it was a self-organizing obal common. hasn worked. it's just like the wild west time to ve in the marshals. >> brown: now you talkedbout the top tier, i thk was what you said. governments. >> right. >> brown: you're talking abo cyber spying? >> yeah. this is a new form of espionage. the internets god's gift to spies. it just iso helpful. you don't have tgo there physical. you can break in fm 3,000 miles away. fabulously easy. a t of people have put a lot of effort into i the rst case i know about was in 1984 .

the soviet union breaking in d.o.d. and uversity computers here in the u. some places ey've been doing this for decades. >> brown: wh does . schmidt do about that? >> we have a pblem here as a country because the only people who can reay compete with the intelligencegencys of big foreign countries a at n.s.a.'sut we're all with reason a ltle nervous about getting n.s.a.free reign in cyberspace. we're gointo have to sort out things iernally. what do we want o.d.and d.h.s.to do. what do want s.b.i.to do while regnizing it has the capabilities to play athe top of the lgue. >> brown: let me ask you brieflto come back full rcle to the financial institution, whatever itas. it something that average citizens have to fea >> no. >> is it somethinghat any of us shod be recognize sothing. >> we needo fear it. a ng-term cost to our econy is very damaging. the risk of the financial

system, the greater e net, the ss of intellectual property. we p for research. other countries get the benefit. that not how to be competive. right now i do on-li banking. i don't worry about . if you'ra consumer you're probably safe but as nation we're at risk. >> brown: all right. james lewi thanks so much. >> thanks. >> woodruff: finally tonht some very spial holiday greengs complete with family photos and senerseas. newshour correspdent tom bearden s the story. >> it wasn't this windy our house. >> reporter: shortly after dn on a tuesdayorning, temperature inhe low 30s. >>eep logan covered up, though >> reporter: a you family meets wi a photographer for a familyortrait. not in nice warm studio, but in the garden of the godpark in colorado springs, coloro.

and as cold as iwas, they took off their ats, because they wanted the best picture possible. >> ok, we're gna get this done quick >> rorter: the photographer is jay ckman, one of hundreds of pressional photographers who vonteered for a project called "portraits of love." >> i've covered rs before, but is could do it. >> reporter: a veterans suppt group, solers angels, joined forcesith pdma, a professional photograers organization, to take pictures of military families and send em to loved onesverseas in time for the holidays. rtraits aren't what dickman normally shoots. he's aulitzer prize winning national geoaphic photographer with an international reputation. >> rylee, you are looking perfect, lean back against your dad my older son's in thmilitary, gavi he's a chief warrant officer, he's been deplod three timeto iraq. so when th asked me if i could do this,t was, 'of course.' this is a minor thg i'm doing for ese people who are doing a huge amount fous.

>> reporte major george hammar was lucky enough to be ablto get in on s family's picture. he was home on a two week ave fr his duty station in kala gush, in northeaster afghanistan. >> pretend this is fun >> reporter: hammer t on his best dre uniform for the portrait. his wife joy cradl his three week o son logan while he held fi year old rylee. logan was bornhile hammar was in afgnistan. he h seen him for the first ti just four days earlier. what's it li to give birth wi your husband thousands of mis away? >> that was hard. d one of the hardest things wafiguring out what i was going to do with her f the birth. because i had to fure out how i was going get myself to the hospital, who was going to te caref her, he was able to call in rig as i gave birtho he got to hear his first cry.

>> i got a play by play from joy's mom. >> reporter: dkman has been to war himself. he won his pulitzer photographing the r in el salvador. his son isurrently stationed in fort lewis washington, d dickman went tre earlier this year tphotograph families. his son helped out dickman says hison made an offhand remarkhat really broughhome how important photographs are to soldiers r from home. >> whehe would go outside the wirekind of into harm's way, he had a picturef his wife in his breast pocket,nd she was close to him ande could pull thaticture out and have that connection immiately. >> yeah, i do thatoo. i've got ptures of us when we went to dieyworld this last year, i keep thein a little book that i keepn my cargo pocketo its always close to home, or closeo my heart. >> reporter: it st be hard. >> oh yeah. it real hard. i mean you'rfar away and thers not much, you kind of feel helpless.

>> okay, i think you allre done >> reporter: wle the hammar family put their coatsack on, the seco family of the day came skipping down the pat can you sit right here? >> reporter: mary th dye's huand, major denton dye, is on his second deploymt, and has been gone for six months. >> look here, lookere, oh, th was pretty. >> reporter:he dyes have four children, six year o morgan, fi year old avery, three year old kelsey, and the-month old presn. >> he hasn't been able tsee his son yet. he was born in septemb and the opportuny arose that we could send him a picture of oufamily and let him know tt we're doing well back here >> bring it up a ltle higher, look at me right here reporter: mrs. dye, herself an army reserve mar, says the fami works hard to cope with the long separatns. >> little thin, we've made dolls of daddy that ey get to hug and sleep witht night, they're lled their daddy

dolls. let th do a project and be able to mail to daddy, this like that. so we do what can to help the kids stay inouch with him and have the feelings d know that he miss them and that they miss him and that it's ok miss him, but we go onith life and keephem busy and everything else. >> thais it, we have got it done. woo. that's an ercise. >> reporr: over 400 volunteer photographers in5 states started king these portraits in september. e industry group estimates that as many as 4,000 famies took part. the pictures wl be shipped to overseas stations in timfor the holida, where they will adorn everything from nts to foxholes, humvees to airaft, anywhere american service meers might find themselves a long way from home. >> brown: agn, the major

developments of the day. president obama appeal to small nks to make more loans and help the recovery ga momentum. prisoner sp to free a caured israeli army sergeant and about thousand palestinians and senate leaders agreeto ansenate leaders agreed to schedule a final vote the democrats' hlth care reform ll. it will takelace at 8:00 am on christmas eve. the newshour is ways online. harireenivasan, in our newsom, previews what's there. hari. >> sreenivasan: on our w site tonight, amyalter from the hoine explains the wheeling and dealing that weninto the sete health care bill. find our interview with amon e rundown. there's more about sma banks, includinthe tale of community trage in chicago after the seizure the park national bank by the fdic in october. and onrt beat, sneak a peak into the mind of movie mer tim burton. his awings and sculpture are on exhibit at the muse of modern art in new york

all th and more is on our web site, newshourbs.org. dy. >> woodruff: and thas the newshour f tonight. i'm judy woodruff. >> brown: ani'm jeffrey brown. wel see you on-line, and again here tomorrow evening, wh jim lehrer's exclusive interview with president oba at the white hoe. thank you,nd good night. major fundg for the pbs nehour is provided by: >> what the wod needs now is energy. the energy to get the ecomy hummg again. the ener to tackle challenges like clima change. what is at energy came fm an energy company? everyday, chron invests $62 milln in people, in ideas-- seeking, tching, building. fuelingrowth around the world to move all ahead. is is the power of human energy. chevron.

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