captioning sponsored by macneil/lehrer productions >> lehrer: good evening. i'm jim lehrer. president obama made his case for a sweeping overhaul of financial regulation. on the "newshour" tonight, jeffrey brown looks at the proposals and the coming debate. >> woodruff: and i'm judy woodruff in tampa, where we're taking the pulse of floridians about government. there's been a lot of talk lately about where tax dollars go and what they buy. tonight, follow the federal money trail in florida. >> lehrer: then, we'll have excerpts from today's tough questions for attorney general eric holder about handling terrorists. >> with regard to osama bin

laden, who is our... who's target one for the united states, our plan is to capture him or to kill him. >> lehrer: gwen ifill updates the investigation into last week's west virginia coal mine tragedy. and fred de sam lazaro reports on using private capital for the public good. in this case, for toilets in the slums of kenya. that's all ahead on tonight's "newshour." major funding for the pbs newshour has been provided by: >> what the world needs now is energy. the energy to get the economy humming again. the energy to tackle challenges like climate change. what if that energy came from an energy company? everyday, chevron invests in people, in ideas-- seeking, teaching, building. fueling growth around the world to move us all ahead. this is the power of human energy. chevron.

and by the alfred p. sloan foundation. supporting science, technology, and improved economic performance and financial literacy in the 21st century. and with the ongoing support of these institutions and foundations. and... this program was made possible by the corporation for public broadcasting. and by contributions to your pbs station from viewers like you. thank you. >> lehrer: the president stepped up the pressure today for major reforms in regulating the financial industry. he called in congressional leaders in an effort to win action on a senate bill. jeffrey brown has the story. >> brown: the white house was the setting this morning as president obama shifted focus from health care reform and nuclear security back to financial reform. he told the assembled congressional leaders the issue remains urgent. >> i think all of us recognize

that we cannot have a circumstance in which a meltdown in the financial sector once again puts the entire economy in peril. and that if there's one lesson we learned, it's that an unfettered market where people are taking huge risks and expecting taxpayers to bail them out is simply not acceptable. >> brown: with the senate preparing to debate a reform bill, the president insisted that the measure on the table-- and a house bill that already passed-- would put an end to federal rescues. >> i am absolutely confident that the bill that emerges is going to be a bill that prevents bailouts. >> brown: but republicans at the meeting were unmoved and afterwards, senate republican leader mitch mcconnell claimed the bill would do just the opposite. >> if you look at it carefully, it will lead to endless taxpayer bailouts of wall street banks. that is clearly not the direction the american people would like for us to go and also

not the direction senate republicans would like to go. >> brown: as written, the senate legislation creates a "resolution authority" designed to wind down failing financial firms. banks would contribute to a $50 billion fund to cover those costs. it would also toughen oversight of banks and capital markets, and it would increase consumer financial protection. the president called especially for strong regulation of derivatives-- the complex financial products that triggered huge losses that rocked insurance giant a.i.g. and major banks when the housing market collapsed. and, he voiced hope of passing a bipartisan package of reforms this year. but back at the capitol, democratic senator chris dodd-- a chief writer of the proposed new financial rules-- charged republicans are spreading "outright falsehoods." >> my patience is running out. i've extended the hand. i've written provisions in this bill to accommodate various

interests. but i'm not going to continue doing this if all i'm getting from the other side is a suggestion somehow that this is a partisan effort. >> brown: for his part, without offering new details of potential compromise, republican leader mcconnell said his side is willing to work on the issue. >> i think the solution to this is for the bipartisan talks to resume between chairman dodd and ranking member shelby and others and hope that we can get back together and address this very important issue on a bipartisan basis. >> brown: despite the tension, treasury secretary timothy geithner predicted ultimately the bill will find broad support. >> we're very close, we're open to ideas. our test is going to be what's going to work, what's going to be in the public interest. >> brown: senate democratic leaders said they will try to pass a final bill in the coming weeks-- with or without if necessary, without republican help. >> brown: we have our own analysis and debate now. felix salmon writes a finance and economics blog for reuters. peter wallison of the american

enterprise institute worked on deregulation issues during the reagan administration. he's now a member of the "financial crisis inquiry commission," but is expressing his own views tonight. let's focus, first othis issue upon of limiting bailouts or creating them. felix salmon, what do you see here that would help prevent future federal bailouts? >> there's a whole series of things which will prevent bailouts. for one thing, there's a new council charged with making sure that there are no big systemic risks to the financial system from the banking and financial sector. for another thing, the biggest banks and financial institutions are going to have much higher capital levels if they need to have a much lower leverage. they need to be inherently much less dangerous than they were before this crisis. and finally, all of those big banks are going to be paying into the $50 billion fund, which will exist in case anyone does

get close to failing so wind them down in a way which won't cause horrible dominos like we saw in the wake of the lehmann brothers collapse which was very chaotic and will instead be a relatively orderly resolution where the investors in that company and the bond holders in that company take the pain and everyone else is more or less okay. >> the republican argument seems to be there is still some kind of implicit federal guarantee of government support that could let to more bailouts. >> the issue isn't really where the money is coming from. it's not whether it come comes from the taxpayer or not. it's whether the government has a fund with which to bail out very large financial institutions, and the bill containt a $50 billion fund intended to do exactly that. what happens here is when creditors look at a very large financial institution, they will say, "i'm much more likely to be repaid if there's a $50 billion fund than if this thing has to go to bankruptcy." so they will prefer to lend to

these very large institutions and that is what is very dangerous. >> brown: but if the fund is coming from the financial institutions themselves , isn't that creating the kind of disincentive-- pick it up from there. that's who's paying instead of the taxpayers. >> that's the point i think senator dodd has been focusing on. this is not bailout because the money isn't coming from the taxpayers, but the important question is not whether the fund is taxpayer money or not. what's it says to the creditors of these institutions about whether they are going to be bailed out if the institution is taken over. and if the fund exists, no matter who creates that fund, that's what it will be used for. and once it exists, of course, there will be pressure on the government to rescue everybody who is in trouble because people will say, "well , you have

the fund. why didn't you rescue this institution?" so we will have this continuous process of bailing out large financial companies. >> brown: mr. salmon? your response? >> this is just not true. the fund does not bail out creditors. creditors have to take losses, and the fund is there to make sure that it backstops the creditor losses in case there are losses over and above that. and, of course , the fund is coming from the financial institutions. and the whole point of the fund is to wind down situation. it's only used when the bank or financial institution is failing and is going to be close the and is going to disappear from the face of the earth and all of the management is going to be fired, that is in the a bailout. no one is going to use the fund to bail them out if it involves the institution being closed and the management being fired. >> brown: the bailout or not a bailout, this is a terminology thing. but what's the alternative to having some sort of

controlled unwinding, something watching it to allow it to fail in a controlled way? >> well, if you want to have it fail in a controlled way you set up a fund and use the money to pay off the creditors. the whole point about not sending these institutions to bankruptcy is that you will be able to pay off the creditors because if you don't pay off the creditors, then the chaos that everyone is afraid of will occur. the creditors have to be paid. and that's the bailout part. now, once the creditors are paid then the market understands the game, and the game is that the very large financial institutions will be bailed out , the smaller ones will not be. and that will change our financial system. >> brown: what about the other part mr. salmon started with? before we get to the problem point, new regulations that are-- that will be put in place, the federal reserve would have more oversight to prevent institutions from getting into

trouble in the first place. >> that's actually the most dangerous part of this bill. >> brown: the most dangerous. >> ybecause what it does is it suggests that these companies are too big to fail. senator dodd says they're trying to eliminate too big to fail, but once you establish that these companies are going to be regulated by the fed, for what reason? balls if they fail there, will be some sort of chaotic result. but what that really says is they're too big to fail. and so they will be bailed out. >> brown: so better to have no regulation? >> sure, it's better to send these institutions to bankruptcy. that's been the central problem here. the government has been trying to set up a resolution process that evadz bankruptcy. bankruptcy is the way these institutions are made not too big to fail. >> brown: mr. salmon, you see these regulations in a different light. >> i do. for one thing there's no bankrupt banks. banks are leveraged institutions by their

very nature. no one is going to tlond a bankrupt bank. banks have to be liquidated. you can't have bank of america operating in bankruptcy. you need some kind of resolution authority. you need to be able to step in and take them over. in general you need to have the ain't to keep the financial system from sinking. it's all well and good to say that the federal reserve oversight means -- is an admigd that bannings are too big or connected to fail, and to a certain extent that's true, but as long as you have a way of dealing with it that doesn't involve massive taxpayer bailouts and doesn't involve huge systemic consequences for the economy as a whole, that's a pretty good way of going forward >> brown: mr. wollaston, there are many other parts of this, we can't go through each one, a clearing house to for derivatives, consumer agency-- are they all wrapped up in your sense of overregulating these institutions and keeping them

from innovation or holding down credit, ways that would affect them that way? >> no, actually , most important issues are this question of federal regulation, federal reserve regulation of these large financial institution, and incidentally, we're not talking about banks, per se. that is the deposit-taking institutions. we're talking about nonbank financial institution like investment banks , security firms insurance companys, hedge funds. those are thes now not subject to this kind of regulation and would be made subject to it. we continue happens when a bank faldz. the f.d.i.c. has the power it take it over and revolve it we're talking about all other institution throughout our society. >> brown: i'm wondering, though, because you're here in washington, the politics of all this. is there a compromise that one can see between the two sides? >> personally, i would say that there is a possible compromise here. there can be some sort of consumer financial protection agency

in some sort of form, but the things that strike me as most significant to the republicans are the two issues that i've talked about, and that is setting up a resolution process that really proposes to bail out or take over all these institution over time. setting up a continuous process of doing that. and the federal reserve's regulation of what are called systemically significant companies. if that were eliminated, i think this bill could move. but these are the things, i think, the administration wants most. >> brown: mr. salmon, in our last minute, how do you see the politics and the potential for compromise? >> well, if what mr. wollaston is saying there's little potential for compromise, becauses, clearly you need regulation of the financial system because the financial is the, even alan greenspan has admitted many times now, is obviously incapable of regulating itself. if the republicans are refusing

to admit that any kind of regulation is necessary or desirable, then i don't think that negotiations are going to get very far. >> brown: all right, we'll leave it there. and watch. felix salmon and peter wallison, thank you both very much. >> thank you. >> woodruff: still to come on the "newshour": tracking federal tax dollars in florida. but first, the other news of the day, here's kwame holman in our newsroom. >> holman: the chairman of the federal reserve warned congress and the president today to start reining in the national debt. ben bernanke testified at a senate hearing. he said a credible plan to bring down record deficits could lower long-term interest rates and raise consumer confidence. >> addressing the country's fiscal problems will require difficult choices but postponing them will only make them more difficult.

the public and markets requires that policy makers move decisively to set the federal budget on a trajectory toward sustainable fiscal balance. >> holman: bernanke also indicated he has new hope for the staying power of the fledgling economic recovery. but he said high unemployment won't come down any time soon. the latest economic numbers showed spending on retail goods rose more than expected last month, thanks to milder weather and auto incentives. but consumer prices went up only slightly showing inflation remains in check. the latest economic data-- plus upbeat profit reports-- sent wall street higher. the dow jones industrial average gained more than 103 points to close at 11,123. the nasdaq rose almost 39 points to close near 2,505. and, the standard and poor's 500 finished above 1,200 for the first time in a year and a half. strong earthquakes rocked an area of western china today, killing nearly 600 people. more than 10,000 others were injured. the quakes centered around a remote mountainous region near tibet. the initial tremor registered a magnitude of 6.9.

we have a report narrated by lindsey hilsum of independent television news. >> reporter: driving into the earthquake zone-- the survivors, local tibetan people, gathered at the roadside, next to what used to be their homes. old fashioned mud and wooden houses came tumbling down. people scrabbled with their bare hands, trying to dig out those who had been trapped in the debris. concrete structures cracked and tilted. no one can live in them now. the government says 85% of houses in jiegu, the main town in yushu county, collapsed. the first pictures to emerge were from a surveillance camera mounted on a police car. the security services watch the area closely, because the tibetans there are fierce followers of the dalai lama, and suspicious of the chinese government. but police and soldiers were

desperately needed today, immediately after the quake 700 locally-based people's armed police started to dig people out children are thought to have died in collapsed schools as they did in sichuan in 2008. nearly 4,000 injured people are reported to have been rescued by hand. hospitals are full and some people are being treated in a stadium. across china reinforcements were readied. rescue workers prepared to fly to the nearest commercial airport, 500 miles from the epicenter. firefighters were driving from golmud, a 1,200 kilometer road journey. elsewhere soldiers loaded rice onto trucks to take in. the quake hit one of the poorest and coldest parts of the country. food, shelter materials and

water equipment will be urgently needed. >> holman: two years ago, a far more powerful quake hit neighboring sichuan province. nearly 90,000 people were killed. in northeast india, a tropical cyclone swept ashore without warning overnight. it killed at least 89 people and left thousands homeless. the storm's winds topped 100 miles an hour, and demolished more than 50,000 mud-and-straw huts across two indian states. villagers were caught un-prepared because no alert was issued. research published today in britain triggered a new debate over how many women die in pregnancy or childbirth worldwide. the study-- from the university of washington-- covered the years 1980 to 2008. it found the number of maternal deaths dropped more than 35% during that time. the medical journal "the lancet" reported the study. its editor said maternal health advocates asked him to withhold the findings, fearing it would hurt their fundraising. those are some of the day's main stories. i'll be back at the end of the program with a preview of what you'll find tonight on the newshour's web site.

for now, back to jim. >> lehrer: the nation's chief legal officer got a senate grilling today over the war on terror. the issues ranged from the fate of al-qaeda's leader and key terror suspects to the prison at guantanamo bay. the occasion was a senate oversight hearing on the justice department and right from the start, attorney general eric holder was on the defensive. democrat herb kohl of wisconsin pressed holder about his statement last month that osama bin laden would never be caught alive. >> mr. holder, would you like to explain that comment and clarify what the administration has planned if and when, as we all hope, bin laden is captured? >> what i said was that, with regard to that possibility, both in our attempts to capture him and from what we know about instructions that he has given to the people who surround him, his security forces, i think it's highly unlikely that he will be taken alive. but our goal... our goal is to

either capture osama bin laden, or to kill him. >> lehrer: republicans then zeroed in on how to prosecute terror suspects held at guantanamo bay, cuba. alabama senator jeff sessions charged holder had "worked to undo" the military commissions, set up by the bush administration. >> it's imperiled i think a lot of hard work and progress over the years. as you know, i supported your nomination. but your actions have shaken my confidence in your leadership at the department of justice. >> lehrer: holder argued the use of civilian courts to handle terror suspects is nothing new. >> the bush administration used the criminal justice system to interrogate, to prosecute and to incarcerate terrorists for the same reason that the obama administration has. it is an extremely effective tool to ensure justice and to protect the security of the american people. now, let me be clear. this administration will use every tool available to it to

fight terrorism, every tool. this includes both civilian courts and military commissions. indeed, we have already referred six cases for prosecution in commissions. we will no doubt refer other cases as well. >> lehrer: last november, holder announced 9/11 mastermind khalid sheikh mohammed would be tried in federal criminal court in new york city. earlier this year, local officials said that would be too costly and too great a security risk. holder said today new york as well as other sites are still under review. but new york democrat chuck schumer asked him to look elsewhere. >> the overwhelming consensus in new york, as you know, is that it shouldn't be there. and i just strongly urge you to make sure that that doesn't happen, find a better >> lehrer: republicans-- like senator sessions-- said guantanamo suspects should not be tried anywhere on the u.s. mainland. >> the american people are not interested in terrorists being brought from guantanamo to their

own communities. reality is a stubborn thing. pretending that terrorists can safely be treated as common criminals will not make it so. >> lehrer: republicans also questioned the handling of the christmas day airline bomb plot. the suspect was read his rights shortly after his arrest, and referred to civilian courts. holder said he stood by that choice. >> i think the decision that was made has been shown to be the right one, given the fact that we had the ability to get information from him in that one-hour interaction immediately after he was apprehended, and then the information that he has since provided as a result of his decision to cooperate with the federal government. >> lehrer: overall, democrats defended the attorney general's discretion to choose where and how to prosecute terror suspects. senator diane feinstein of california accused republicans of playing politics. >> i think that the degree to which this dialogue has

escalated is really very unhealthy. democrats did not do to president bush following 9/11 what is being done to this administration with respect to their decision-making. and i really regret it. and i really find it reprehensible. i believe that the best interests of the people of this nation are served by the administration-- you, mr. attorney general, and the president-- having maximum flexibility as to which venue these defendants should be tried. >> lehrer: the decision to send some detainees to american courts had been part of the broader effort to shut down the military prison at guantanamo. republican senator lindsey graham of south carolina agreed today on the need for a new prison somewhere else. but he voiced concern about what happens in the meantime. >> we're basically a nation without a viable jail. this president is probably not going to send new people to

guantanamo bay. is that a fairly accurate statement? >> that is certainly something we would try to avoid. >> lehrer: the original plan was to close guantanamo last january. there is no new timetable. >> woodruff: it's tax week here in florida and around the country, we've spent the last week looking at just where federal tax dollars go in the sunshine state and the debate over how they're spent. >> i'm angry. i'm angry with what's happening in washington. we are headed for socialism and fascism-- marxism. >> we the people are losing control of our government, and the government spending, and that concerns me. >> reporter: with the federal government on track to pay out $1.5 trillion more this year than it takes in, and with growing citizen anger over spending on bank bailouts and health care reform, it's easy to forget all the things the government pays for, that don't get as much attention.

since a healthy share of the anger is emanating from florida, we figured it's as good a place as any to look at what those things are. in 2008, washington funneled nearly $150 billion to addresses in florida in the form of payments to big entities like state and city governments, and checks to individuals, for social security, medicare and retirement benefits. of all that money, some ends up with anna spinella and her husband, joe. at 77, joe has alzheimer's and other health problems. while anna, who is 76, is legally blind. through a combination of programs funded by the older americans act and the department of veterans affairs, anna and joe get meals delivered to them almost daily as well as 10 hours a week of home-based care. that care includes giving joe a shower and a shave three times a week, plus feeding him breakfast, cleaning up in the

kitchen, doing the laundry, and other chores. >> i think everybody should know that ordinary people are being blessed by these different things. i think if you aren't there yourself, your neighbor probably is, or a person down the street, or your mother, or somebody else in your family that lives in another town is being blessed by the different programs that you pay taxes for. >> reporter: anna says the help she and joe receive has enabled them to age in their home, instead of a nursing home. >> i didn't count on the fact that i was 76 and not as strong as i used to be, and the fact that he would not be able to turn over. it would be literally impossible for me to turn him over, to pull him up in the bed. it just... it means everything to me.

it just means everything to me, and to joe. >> reporter: another, much larger recipient of federal money in the tampa area is the hillsborough county school district. florida received $5.7 billion from the federal government for education last year-- $278 million of it directed to this county. at schools like west tampa elementary, that money has provided students with free or low-cost meals paid for reading and writing coaches and bought laptops for a portable computer lab. superintendent mary ellen elia says federal dollars have also kept teachers in the classroom. >> we are over 10% unemployment in this county. and in this school district, we're the largest employer in this county and we have not laid off one person. and the reality is that the funding that we receive from the federal government has really been very instrumental in allow us to do that. >> reporter: after the schools,

the next largest employer in hillsborough county is macdill air force base, one of 17 military installations in the state of florida. it has an operating budget of $284 million, and pays out $1 billion in salaries to more than 12,000 employees. colonel larry martin is commander of the 6th air mobility wing at macdill. he says it leaves a major economic footprint in the community. >> we have an entire range of jobs that you might have to run a small city. from very highly technical jobs involved in the air force in running the high tech equipment that we have with our communications equipment that's on the base. to people that cut the grass keep the building clean and run them, to the highest strategic thinking that goes on in central command and special operations command. >> reporter: while military spending is discretionary-- not locked in by law-- it is often viewed as sacrosanct. and once defense is added to congressionally mandated

spending programs, such as social security, medicare and medicaid veterans' benefits, and interest on the debt, that leaves just one-sixth of the u.s. budget available for easy axing. unless there's an unexpected spike in tax revenues, chopping the federal deficit will mean having to cut back on things people like and depend on, says maya macguineas-- director of the fiscal policy program at the new america foundation, a nonpartisan washington think tank. >> so when we do get down to realistic discussion of trimming back the budget, people are going to realize we're not going to be able to do it in a way that you don't feel. it means going through the budget and pulling back things like spending on energy or money that goes to education, basic research and development, international aid, transportation-- all sorts of things that people like and you would see a result, sort of a more crumbling infrastructure, less basic research and development if you trim those things.

>> reporter: even so, many tampa residents still want to see the federal government reined in. >> they own banks, they own automobile companies. and that's the problem that we're facing right now in trying to be a republic, which is what we are, versus being run by a socialist group. >> you know, i understand we have to help our people. disabled people need help. people that really need help we want to help. but just giving away money because the poor wants to be living the same way as people who are working hard, to me i don't think that's good. >> reporter: but democratic congresswoman kathy castor, who represents florida's 11th district, which includes tampa, says many of her constituents appreciate government stepping in when times are tough. >> frankly, folks are more concerned about their jobs, affordable health care good education for their families for their children. they understand the important role government has to play especially in a recessionary

time. >> reporter: not everyone sees it that way. tim curtis is a member of the tampa tea party and organizer of the tampa 9/12 project. >> my position is that there is absolutely a role and a function for the federal government. interstate highways, provide for the common defense. there are those things that are clearly enumerated in the constitution that everyone in this country ought to have to contribute to. beyond that, there shouldn't be any federal funding for, and you can go right down the line for >> reporter: probably the hottest current debate in tampa over government spending has to do with trains-- two of them in fact. one, high speed. the other, urban light rail. both of these projects have a price tag in the billions, so the argument is over cost, and

whether government should be in the business of telling people how to get around. florida's plans for a high speed rail system date back a quarter century. the talk turned into reality this past january when the obama administration awarded the state $1.25 billion for an 84 mile line that would stretch from tampa to orlando, running along the median of interstate 4. ed braddy is executive director of the american dream coalition, a group that defends automobile use and homeownership. braddy argues that rail projects come in on average 40% over- budget. he says if that happens in florida, it'll be taxpayers who pick up the tab. >> if history is any guide, i hope policy-makers take it into consideration, it's going to come in at a lot more expensive than that and who is going to pay? why should a struggling middle class family or lower-middle class family all the way up in

the panhandle pay for high speed rail between tampa and orlando. who benefits from that? >> reporter: a lot of people, says tampa's democratic mayor pam iorio. a recent study by forbes rated the tampa-st. petersburg region the worst in the country for commuters. rail advocates say the system will help to alleviate traffic congestion by giving people more transit options, and spur economic growth at the same time. >> if we can make this investment, we will produce more and better jobs and it will do so much in the way of mobility choices which is so important not only to our young population but to the ever increasing older population as people lose the ability to drive. >> reporter: across tampa bay, the republican mayor of st. petersburg, bill foster, also supports high speed rail, but only if his city is included in the plans. >> i will say that if it stops in tampa then it's a terrible waste of money and i'll fight like dickens to make sure it

never happens. but if it includes the st. pete component, the ability to move people efficiently at high speeds i think is important for our region. >> reporter: the other transit debate in the tampa area is over a proposed one cent increase in hillsborough county's sales tax to help fund a light rail system. republican county commissioner jim norman says it's an expense voters simply cannot afford. >> it could not be a worse time for a one penny sales tax. government people that even anticipate wanting to put this penny on, they don't get it. they are out of touch. they do not understand the hardships our community is facing right now. they're trying to survive and actually work two or three jobs. to ask them to pay more on anything is the wrong thing to do. >> reporter: but mayor iorio-- who has made light rail a top priority of her final year in office-- sees it differently.

>> you have to look not only at what the proposal is, but what happens if we don't move forward. what kind of community will we have 30 years from now? this gives people mobility choices. does it cost? of course, it costs. everything worth having in our country has cost something. >> reporter: with federal income taxes due tomorrow, that cost and how it's paid for will be on the minds of millions of americans. >> lehrer: now, the investigation of the mining tragedy in west virginia. gwen ifill has our story. >> ifill: the explosion that killed 29 workers at the upper big branch mine earlier this month was the nation's worst mine accident in decades. tomorrow, president obama is expected to receive a preliminary report on the causes of the tragedy. ahead of that this afternoon, west virginia governor joe manchin and other officials discussed the multiple strands

of ongoing investigation into the disaster. ron wooten-- who runs the state's mine safety department-- said that could take months. >> we don't know what happened. we're going to work hard to try to find out precisely what happened. in my 40 years in this industry, this is the biggest thing i've seen. so we've got to find out, and it's going to take a while. >> ifill: the upper branch mine has amassed more than 1,300 violations since 2005m but it remained open. new attention is now focusing on the role of government mine safety watchdogs. covering that part of the story is ed o'keefe of the "washington post." he joins us now. ed, count it up for us. how many separate investigations are now going on in this latest disaster? >> we have the west virginia investigation. there will be an investigation by the company, massey energy, there will be several congressional investigations, by the house, maybe the senate.

and of course you have the investigation of the mine safety and health administration, the agency that is supposed to be overseeing the safety at the nation's coal mines. of course there's been a lot of criticism of the fact that the agency itself is essentially not only investigating the incident but investigating its own workers. this has been a concern of mine safety experts, other observers and lawmakers for quite some time that the agency doesn't have an effective independent investigator, an inspector general, to step in and look at the situation. the concern is you might have employees or colleagues not as willing to point the finger, at least as sharply as they would, if they weren't actually employed by the agency and looking into their own colleagues. >> ifill: ed, the question never changed, which is what should the national mine safety and health administration have known about this and what didn't they did? >> well, that's going to be remain a big component of this. it does appear that the -- this mine had a pretty significant record of safety violations, and that the agency was aware of

them. the concern is that those concerns weren't necessarily elevated to the level where there was even more scrutiny put upon the company. and remember, this agency has never shut down a mine in this country for safety violations. it has the ability to do so in a very sort of narrow scope that it looks like mapsy energy either would have fit or was very close to fitting. but despite that, it was not a place that was shut down ever out of concern. there was a of investigations, inspections going on. inspectores were there pretty regularly. and as we've reported, as others have reported, this is a place that had several different violation over the course of time. but there really was no concerted effort to really close this place dun or take a harder look. part of the reason, talking to mine safety experts and agency officials, is it simply doesn't have the resource. there report enough people. there isn't enough money.

there is not the political will, not only of the agency but the labor department--. >> ifill: also they're allowed to appeal each one of these i have explagz basically kick the can down the road. >> absolutely. and that is grew out of the 2006 reform. the penalties will increase, depending on the number of violations there are. almost the financial incentive observers and lawmakers and others have said, to continue kicking the can down the load because if you prolong the penalty process and don't get those violations added to your final record, the violation price tag stays lower. that is a loophole you better believe lawmakers are going to look into in the coming months to try to find a way to break that. on top of that you have a commission locking into all this and is sleersly logjamed. it doesn't have enough people to review the appeals. >> ifill: one of the congressmen is rich miller who said this afternoon there are 48 other mines that come in for additional scrutiny because of the delays assessing the fines and the penalties. >> it's a pretty brash move by miller who has been part of the

reform efforts in the past. there was an effort in 2007, 2008 to, get additional reforms tacked on the 2006 measure following the sragow disaster and miller is someone pushing for those. he is said to be quite upset by all of this and is part of the motivation behind releasing this list is to demonstrate there are customers out there, in his words, gaming the system that would otherwise be under closer scrutiny if they were able to do that. >> ifill: in the sayingor mine disaster, 12 miners were killed in that one, what has changed in safety violations or prosecution or scrutiny, watched dogging, since then? >> following that disaster, this was a series of reforms put in place that essentially gauge the mine safety health administration, more inspectors. it stiffeped the penalty and required their to inspect more frequently. you have seep the number of violations and citations rise

and saw a significant uptick in the number of the people on the agency's payroll. with that, as we said, came that backlog , the ability of the companies to tie up the process and appeal things for as long as two years, if not more, and avoid paying these penaltys to the tune of millions of dollars, and potentially the safety of their workers. so that's the big loophole that was left out there that is inevitably going to be part of whatever kind of legislation moves this time. it's a sad reality, not only in the case of this regulatory agency but in so many others here in washington that they really are in a reactive state of mind, that when something happens only then do they get the money and congressional attention they've probably needed for quite some time. several people have said it me the blood of those who died in that mine is going to be on the legislation that is inevitably passed because that's simply the way this process has always worked. >> ifill: it means, it seemss harsh, but people have to die in order for investigations to happen. we heard the west virginia governor, joe manchin, said there will be investigation of all

underground mines now in west virginia. >> that's right, and by my count there are 290 mines in the states. he wants the highest risk ones to go first. that kuld take about two weeks. it's very difficult to know how much longer it will take after that. it doesn't mean they will suspend operations and put the tens of thousands of mine workers out of work in the meantime but there will be much closer investigations of all of them. he did something similar after the 26 sago disaster, and he's known to have a pretty aggressive stance when it comes to mine safety so this move doesn't surprise anyone who is following this. >> ifill: finally, briefly, tomorrow the president gets this report. what do we expect that report to be? >> well, it essentially is going to be a preliminary review of what the agency knows, much we have already heard, that there may have been mistakes made tracking massey -- the white house will probably tie itself to the reform efforts on capitol hill. it should be noted president obama was a supporter of those additional efforts in 2007 when he was a senator, he and

then-senator clinton were joining senator kennedy at the time to try to get them out of the senate. it never happened because illinois is a big mining state as well. he has some history with this, and obviously the white house is expected to throw some concern at it and try to get something done. >> ifill: thanks so much. >> any time, take care. >> lehrer: finally tonight, a story about toilets, investment bankers and the poorest of the poor in the slums of kenya. special correspondent fred de sam lazaro reports. >> this whole area used to be a toilet. >> reporter: a poverty and disease-ridden kenyan slum isn't exactly something that whets the appetite of most investment bankers. but it's exactly the kind of project jacqueline novogratz is looking to finance. novogratz has an m.b.a. from stanford and works in new york city, not far form banking's movers and shakers. but she leads a team at the acumen fund that's invested some

$40 million to support enterprises that serve the poor. >> on good news from pakistan... >> reporter: with donations from 200 philanthropic individuals and organizations, they've invested in a dairy farm in pakistan, a mosquito net factory in tanzania or a seed factory in kenya. it's a new approach to venture capital. she calls it patient capital. an investment that pays off slowly, that encourages profit, just not excessive ones. she insists this middle way will work better in today globalized economy. >> if our current situation teaches us anything, it's that unfettered, unbridled capitalism isn't working. certainly not in interconnected worlds where we need to find ways to include everyone into the global economy. and on the other hand the ills of charity, alone typically can reach low income people but also not at any level of scale and too often it creates dependence rather than a sense of dignity. >> reporter: she's spread the word far and wide that private capital can bring public change. she talked to a book club in

nairoibi about those slum toilets. >> think about toilets. we need a public sanitation system that will sustain itself. we don't have to depend on the government alone to do. we can create a model that we can own. >> reporter: she found architect david kuria had the same idea. he'd been trying to solve the toilet problem for years. >> the issue of sanitation, to me, is one of the most complicated issues in the community, because it's a behavior issue. there are cultural issues and barriers, and also a lot of perception, in terms of this is a service, according to a people, it needs to be free. it's not free, because you still have to pay in terms of a huge burden, really shoulder a huge burden in terms of cost of medicine, or even death, when you're talking about typhoid and cholera outbreaks. >> reporter: those diseases have been all too real in kenya. >> last year alone we had about 300 deaths of cholera recorded in nairobi and the most were in

this slum. >> this is where people don't make the connection enough between sanitation and health. >> reporter: kuria has long in slums like this one; people who for generations have lived without functioning or sometimes even indoor toilets using the bush or streets instead. >> that pipe has water. no septic, no sewer system, just flows into the river. >> you can see the kids playing here. >> reporter: kuria thinks the only solution is to charge for the toilets, to make them pay for themselves. but the idea was a tough sell- not just with people in slums who weren't used to paying for it. he ran into problems getting land and licenses and nine banks refused him financing. then came the acumen fund, after a year teaching him how to design a business plan, the fund invested $600,000. kuria deliberately chose not to market it to poor people at first, but to show the toilets were worthy of kenya's ritziest. >> so what i did was to start in the upper market, outside

hilton, outside intercontinental hotel, near parliament, you know, for high class people and that's where i put the first model to try and influence the mentality and thinking-- that to us became a bit easier than selling eco toilet as a product for the poor. >> reporter: every day, 35,000 people come through this and 35 other eco toilets, paying just five shillings or about seven u.s. cents per visit. rent from a convenience store and shoe shine stands helps make the enterprises profitable. piped in music is but one surprise that greets the user of this eco toilet in nairobi's central business district. it's spotless, uses very little water, a lot of it collected rain water. wastes are recycled into fertilizer and methane gas. but the acid test of the model is in a new one open in mathare, one of nairobi's most violent, depressed slums. >> so david you were trying

different pricing models. in nairobi you charge five shillings and here you charge three? >> a committee from the card, which each family buys for about 100 shillings for an entire family. >> reporter: pricing is just one of the challenges for the slum branch. ethnic tension, which flared up in deadly violence in 2006 still simmers. and lawlessness keeps people indoors after dark. he wants to stage events in the area to make it feel safe at night. and he invited a local group to form a committee to help run the facility. >> jambo, oh you're committee >> how do you get people to come in? >> we were educating them about the cleanness about the disease. >> you have 98 families? >> reporter: kuria needs 200 people to make this toilet break even. he's halfway there, but his goal is about more than money.

>> to me, i think my ultimate goal is more for social transformation. i see myself purely as a change agent. and change maker, and trying to really provoke a lot of debate at different levels from the community level-whether its the whether it's the business community level and also from the political level. >> reporter: novogratz eventually wants the toilets-- indeed all of her investments-- to reach not just hundreds of thousands but hundreds of millions. >> it's going to be a combination of private sector resources, philanthropy, certainly to get it started and ultimately government. >> reporter: in the next several months, kuria hopes to be up to 100 toilets. he's looking beyond kenya to tanzania and uganda as well. >> lehrer: fred's report is part of our collaboration with the pulitzer center on crisis reporting. in his next piece from kenya, fred looks at another investment by the acumen fund into safe, affordable housing in nairobi's slums.

again, the major developments of the day: president obama called in congressional leaders to press for action on financial reform. the chairman of the federal reserve urged action to cut record deficits. he also voiced more confidence in the economic recovery. and strong earthquakes killed nearly 600 people in western china. an editor's note about our spotlight city report last night on health care. we said the group "doctors for america" had lobbied for a single-payer insurance system. that's incorrect. they did back comprehensive reform that included the public option. the "newshour" is always online. kwame holman, in our newsroom, previews what's there. kwame? >> holman: from tampa, florida, we'll have live blog updates from our town hall this evening. "patchwork nation" director dante chinni finds out what people in florida's empty nest communities think of health care

reform and the economy. and you can use patchwork's maps to explore federal spending in your county. plus on "art beat," a series of conversations with this year's pulitzer prize winners in the arts. first up: composer tom kitt and writer brian yorkey talk about their musical, "next to normal." all that and more is on our web site, newshour.pbs.org. judy? >> woodruff: and that's the "newshour" for tonight. i'm judy woodruff in tampa, florida, where tomorrow-- in our own town hall meeting-- area residents question president obama's economic adviser, christina romer and former senator mel martinez, among others, about the role of government. >> lehrer: and i'm jim lehrer. we'll see you on-line. and again here tomorrow evening. thank you and good night. major funding for the pbs newshour has been provided by:

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