gwen: the loss of a liberal lion plus the justice department versus the c.i.a. and the good news-bad news economy. tonight, on "washington week." thousands of mourners paid respects today to a man who lived the past and looked to the future. >> this november, the torch will be passed again to a new generation of americans. >> ideas and ideals are stamped on scores of laws and millions of lives. gwen: ted kennedy's passing was

not unexpected but it leaves a void. on domestic issues like health care. >> my hope is that this will maybe cause people to take a breath, step back and start talking with each other again in more civil tones about what needs to be done. gwen: and on bipartisanship. >> he was never small. and in the process of his doing, he made everybody he worked with bigger. gwen: as massachusetts and the nation mourns, what comes next? in other news, attorney general eric holder goes toe-to-toe with c.i.a. director lee on panetta over detainee interrogations. >> threatening a prisoner with electric drill isn't torture, i'm not sure what is. gwen: how far will the investigation go? and as fed chairman ben bernanke wins re-appointment, stocks gain but deficit projections have slowed.

is there a silver lining anywhere? covering the week, david broder of "the washington post," karen tumulty of "time" magazine, pete williams of nbc news, and david wessel of "the wall street journal." >> celebrating 40 years of journalistic excellence. live from our nation's capital, this is "washington week with gwen ifill" produced in association with national journal. corporate funding for "washington week" is provided by -- >> it creates half the electricity that fuels our dreams. we have more of it than anyplace on earth. and we're working on cleaner ways to use coal every day. there's more information at nma.org. >> corporate funding for "washington week" is provided by boeing, major funding for "washington week" is also provided by the annenberg

foundation, the compragse for public broadcasting -- the corporation for public broadcasting and by contributions to your pbs station from viewers like you. thank you. once again, live from washington, moderator gwen ifill. gwen: good evening. edward m. kennedy's passing this week unleashed a torent of mourning and analysis. scorse of redemption, accomplishment, legacy and inheritance have dominated the trbts all rooted in the -- the tributes all rooted in the 77 years one man spent on earth, 46 of them in the united states senate. kennedy's causes were fiercely liberal such as his opposition to a law forbidding gay marriage. >> in the constitution of the united states, along with the bill of rights, we have not ever written prejudice and we have never written bigotry into the constitution and we should not do it now in the united states senate. gwen: and many of his stands

enraged republicans as when he opposed conservative judicial appointments of republican appointees. >> the american people deserve better. they deserve competency and they deserve the facts. in baseball, it's three strikes, you're out. what is it for the sect tear of defense? -- for the secretary of defense? gwen: no matter which side of the divide one occupied there was little question the senior senator from massachusetts was a consequential lawmaker. david broder, you first met him in the spring of 1960. so you get to start by telling us over time, what kind of legislator did ted kennedy become? >> he was 28 years old in beckly, west virginia, campaigning for his big brother. and mobile handsome. -- and impossibly handsome. and he was not very prepossessing. he didn't know a lot at that point. he was a charmer and talked

wonderfully well with the folks that he met. but he didn't have a lot to say. as time went on, he schooled himself and became one of the great legislators i think of our time. gwen: he was also one of the great legislators who dealt with some of the great setbacks that would have killed another career. one of them of course being chappaquiddick. and the other setbacks, he had decades in which he was not really that well regarded. >> that is right. his professional life was very disciplined. he had a great staff and he worked them very well. but his private plife -- private life was anything but disciplined. he was wild. he was out of control much of the time. until he found his wife, vickie, and settled down. gwen: ted kennedy obviously got the cover of "time" magazine this week. his passing not just about this

man but about the great work which he not just on health care but health care was his big unfinished work. where does that stand? >> well, it was, as he had said, the great cause of his life. ted kennedy introduced his first universal coverage bill all the way back in 1970. that is how long he had been working on this issue. and he -- his dream of universal coverage died in 1994 with the clinton health care plan. but you know what? he was back the very next year trying to do incrementally what he couldn't do in one piece of legislation. and he had great, great hopes for the obama health reform bill. what does his passing mean? it's really hard to say. the most immediate impact is the fact that now the senate does not have 60 democrats. if the caucus hangs together, it doesn't have enough votes to overcome a filibuster. and we heard people like senator dodd coming into the program saying, well, maybe in

will engender in the senate a new spirit and everybody will put aside their ideological differences and do this as a tribute to senator kennedy. that's not really the senate i know. politicians don't usually cut their deals and cast their votes with somebody else's legacy in mind. >> can i ask a question about that? i've been puzzled knowing this was going to happen massachusetts didn't change its law sooner. the one -- they changed a couple of years ago so that mitt romney, the governor, couldn't appoint a successor to a vacant senate seat and now you can't have a successor until there's an election. why didn't they change this sooner and are they going to do it now? >> well, i think, pete, because they didn't want to seem to be brushing kennedy off the scene. and they wanted to wait until it was almost the end. and then he sent that letter asking them, please make the change back. >> and you think that will

happen now? >> i think it's likely to happen now. you got a democratic legislature. and a democratic governor. and they would like to fill that seat. >> karen, when kennedy passes, the committee chairmanship opens up on the senate health committee. is chris dodd going to take that? and how does that make health care more likely and how does it make financial reform more or less likely? >> it's interesting. chris dodd is an -- is in an interesting position because he did take over in ted kennedy's stead in the health, education and labor and pensions committee. but he's also the chairman as you said of the banking committee. and this is going to be a big decision for him. and on top of this, he is facing what could be the most difficult re-election battle in the country next year. so i think at this point, it's impossible to predict precisely what he's going to do. but there's -- there's certainly always been a lot of sense in the senate that there's nothing that ted kennedy would like to have seen more than to see his dear friend, chris dodd, take his

life's work to the finish line. >> unable to do the kind of compromising that teddy was able to do. is there anybody in the senate who comes close to being the legislator that ted kennedy was? >> not in the same way. there are people who can make a deal on a very specific subject. but kennedy who had the knack of dealing with republicans, democrats, on a whole variety of issues. i mean, we think of him as a legislator on health care. but his touch was on so many other subjects, immigration and law reform. and you can't keep up with all the things that he was involved with. gwen: when you think about civil rights, for instance, we know that he was involved in voting rights act. but sism rights to him was also -- but civil rights to him was also title nine for women

sports and opposing the defense of marriage amendment and immigration. and even minimum wage to him seemed a sism right issue and talked about health care as a right, not a privilege. and karen mentioned this idea of incrementalism and how hard he has been working at it over the years. does that apply also to these other issues, these other bills, laws, which now have his name on them? >> yes. and he was always one who kept his eye on the ultimate objective. but was willing to advance it to whatever extent he could do. >> and i think partly that's because of the 10 presidents that he served under as the senator, five of them were republicans. so ted kennedy had to learn to get things done in environments that were not necessarily friendly territory. certainly during the reagan years. were very productive years for ted kennedy. but it was always by going across the aisle and finding that republican vote, that

republican co-sponsor that could get the bill done. gwen: the legacy of the kennedys is so huge. and it's now become that they are this incredibly staunchly liberal family that -- big l, liberal family, that said as jack kemp used to say, would set out to actually transform the world toward the left. is that what it always was the case? >> no. i mean, the father, joe kennedy, was a very conservative democrat who broke with f.d.r. in spectacular fashion. john kennedy, much loved, but was not a very liberal senator. he was very cautious. and really had to be pushed into civil rights action, for example. robert kennedy more so. and i think in retrospect, my guess is that ted kennedy took his inspiration more from

robert kennedy than from his older brothers. >> chris dodd said at the wake for ted kennedy that one of the reasons he was so successful is that people liked him. was that the key to his ability to work with members of other parties? because certainly other senators tried to do that. other senators have served as long or longer and other senators are knowledgeable. was it the kennedy name or what was it that made him so able to work with other senators and carry them along? >> only two other senators in history served longer than ted kennedy. strom thurmond and robert byrd. part of it was longevity. he came from an era in the senate where people did get along, where people were friends. they could be adversaries on legislation but they ultimately could put those kinds of things aside. a man known for small gestures for remembering your children's names and for gifts and small kindnesses that i think meant a lot to his colleagues. >> i have no idea how in that

busy life that he led that he managed to carve out time to do so many acts of personal generosity for so many people. i wrote about this when -- at the outset of his illness. and i was just flooded with more examples of things that ted kennedy had done himself. not sending somebody else to do it. for other people. >> -- gwen: who holds that torch, he was unique in his liberalism and ability to reach across the aisle, who does it? he said when he endorsed barack obama that he was passing the torch to him, but it's not really quite the same, is it? >> it's interesting because i was backstage at the endorsement when ted kennedy did endorse barack obama in january. and i asked him, i said, so

your endorsement, what does it mean? is it to help him get elected or are you thinking beyond that? and he said no, i'm thinking beyond this. because i see in barack obama someone who i believe can bring people together. and he said i really think that if we're going to get anything done, we need somebody who can bring people together. gwen: is that what you think barack obama is following through on so far? we see the issue that he is facing right now. is he the -- the challenge the administration is facing especially on health care. dachede. >> i think his gestures at the beginning were sincere. to try to deal with people across the aisle. but he has encountered an almost completely hostile republican party. and at this point, he's under great pressure from the democratic left to just go ahead and try to ram things through with democratic votes. gwen: we're going to talk a little bit more about some of the challenges facing the

president. he's ending his vacation a day early to deliver the eulogy at saturday's funeral. but while he was away this week, we began to see signs of the first public rist to develop within the obama administration. the dispute is over an issue the white house vowed to leave behind. whether the bush administration overstepped when c.i.a. operatives grilled suspected terrorists for information. attorney general eric holder has appointed a prosecutor to investigate allegations of abuse. c.i.a. director leon panetta objected and in the end, everybody seemed to be unhappy, pete. >> they did. because something some said he went too far and this has been explored. something he didn't go far enough. what he's done here is asked a career federal prosecutor to look at what we're told is about 10 cases. where it appears that c.i.a. operatives went way beyond the rules for what the c.i.a. called enhanced interrogation techniques. and several of these cases were revealed this week in a report from the c.i.a.'s inspector general that was partly declassified. the groups that represent the

detainees say this was way too limited. that it should look not just the field operatives but the people at headquarters and the white house and others involved in the interrogation methods. others say it's wrong to subject c.i.a. operatives to investigation and prosecution when they were trying to get information which the c.i.a. said was valuable in learning more about al qaeda and preventing future attacks. and all these allegations have been looked at before by other career federal prosecutors. just across the river from washington and alexandria, virginia, where they have experienced terrorism prosecutors. and they decided either the cases were too old or you couldn't find witnesses or the evidence was ambiguous and that they couldn't bring them into court. so they asked why did the attorney general push this when it's been looked at before? i've been told by the people in the justice department that number one, holder believes having looked at these things, having heard about them and now seeing the details, that he felt you just couldn't walk away from this and secondly, he

thinks that there are other avenues that could be pursued in these cases that for one reason or another were not looked at. gwen: he sought details of which we obviously did not see. i have never seen a document as heavily redacted as this report was. so do we have any sense at all about how dire these -- this overstepping was? >> well, yes. we have some sense of it. we know some of these cases, you make a reference to it in the beginning about a detainee who was blindfolded and had a hood on. and he was naked and they were running an electric drill at his ear to make it sound like they were going to attack him with that. and we're also told that some of the redcations involved detainees who died. in c.i.a. custody. one of those cases was prosecuted. but it's -- it's the totality of it that holder says drilled him to do this. >> gwen mentioned at the beginning there's a rift inside the administration. is lee on panetta, the c.i.a. director, impotent now? has he lost his battle and now it's all up to holder?

>> he made his case that he thought this was the wrong thing to do. it would send a wrong message to c.i.a. people, that these things were investigated before and it wasn't fair. the white house basically said to eric holder, this is your call. you need to decide this. you're the attorney general. we can't get involved in making this decision for you. it is your decision. having made the decision now, they made it very clear that it was his and his alone. >> what about all these documents that we saw parts of at least this week? did they ever -- did they take us very far toward answering the basic question of the argument that people like dick cheney have been making which is that these techniques, torture, are necessary to elicit the kind of information we need to prevent another -- gwen: it did ward off action. >> there's no question. that everyone agrees what these documents tell us is that the c.i.a.'s interrogation program gave the government, for example, more than half of what it learned about al qaeda in

the months after 9-11. identified new al qaeda operatives. led to their arrests. forestalled potential attacks. stopped people from coming into the u.s. who were going to come in here or got them arrested once they were here. no question. the difficulty of what we saw this week is nowhere does it delineate, this we learn from normal interrogation, this we learned from enhanced interrogation. so both sides are looking at these newly declassified documents and say this proves our point. >> pete, whogs the prosecutor and what -- who is the prosecutor and what are the guidelines that he's got to stay within? >> he's a career prosecutor in connecticut. john durham. he's already looking at some c.i.a. activities and one looking at whether any laws were broken when c.i.a. destroyed videos of these interrogationings. that's one of the reasons why he was chosen. he is not an independent counsel or special prosecutor so he can only do what the jern tone has told him to -- what the attorney general has told him to do. will he stay within the

guidelines of holder or go lieder? >> and whether tits -- and whether it's libby or lune sky. -- lewinsky. we had the president's long-anticipated decision to reappoint ben bernanke to another term as chairman of the federal reserve and the other was the unanticipated news that the federal deficit is now heading toward $9 trillion. over 10 years. which of these two developments, david, is the more significant to the long-term or dire i suppose? well, good. >> can i say both? gwen: sure. >> for one thing it was no accident that the president decided to announce this high-profile reappointment on his vacation on the same day that the deficit numbers came out. some newspapers put it on the front page anyway. but it did drown out some of the interest. i think in the long term, the bigger issue is the deficit. the president says by his own figures that we face $9 trillion of deficits over the next 10 years.

with some favorable assumptions like he's going to make a lot of money on selling permits for carbon which congress has already rejected. and he has told us that his health care plan, even if he gets what he asks for, will do nothing to reduce that. his promise is health care will pay for itself over 10 years. he is putting himself in a position to come waup business plan because we owe a lot of money to a lot of people in the world and won't stand for these deficits as far as the eye can see. peter orszag has a plan to reduce the deficit but only next year. on the short term the bernanke appointment is more important. we are in a fragile stage of the recovery. it looks like the recession has ended but it will take skill and political norte attitude for the federal reserve to move just right here. if they tighten too soon, we could have a renewed recession. if they wait too long we could have an outbreak of inflation. the president decided to put some -- a guy with a lot of practice to make that decision but it illustrated one more thing and relates to the teddy

kennedy situation. we sometimes think of the world as being all sorts of impersonal forces of good and evil and economic forces. but sometimes it does really seem to matter who the individual people who are in charge. and i think in this instance, ben bernanke is no teddy kennedy but kennedy was unusual partly because of the person he was. and i think some of that goes for bernanke as well. >> something's got to give on the deficit front at some point. is that something likely to be the president's promise that he will not raise taxes on people who make less than $250,000 a year? >> i think so. i don't see how it's aringt metically possible for the president to pursue both parts of his spending agenda which are popular with the people and with the congress without raising taxes on the bulk of americans. there's just not enough money in the over $250,000 a year crowd to pay for what he wants to do. >> the sums involved are unfathomable.

how does this really impact people who are living normal lives? >> that's a great question. i think one of their difficulties is the short answer is it doesn't. right now, we are getting by on very low interest rates because other countries, the chinese in particular, are willing to lend us endless amounts of money. as long as it goes on, we're fine and people shouldn't worry about it. the problem is it's not going to go on forever. and if we are not prepared and we haven't done things to reduce our reliance on foreign borrowing and at some point they decide they have lent us enough money it will be a wrenching adjustment. >> i assume these foreign countries lend us monday because it's -- lend us money because it's something in for them. why do they think so? >> because there are not very many alternatives. if the world economy looks like it's really going to be a basket case, people would rather have money in dollars than absolutely anything else. but as the economies of the rest of the world begin to recovery, eventually people are going to say we've lent enough

money to the u.s. so it's one of those things where you can't quite say what is going to be the precipitating event but it seems unwise for us to continue to rely on the chinese and others lending us even more money each year forever. >> how was ben bernanke's reappointment received on the hill? i saw chris dodd put out a statement where he said this is probably the right choice. which doesn't sound like he was holding him tight. >> ben bernanke seems to be very popular on wall street right now. the wall street crowd really wanted him reappointed. the senate is more ambivalent and some members of the house are downright hostile. i think that reflects the high-profile that bernanke and the fed have taken in this rescue and become a lightning rod for bailing out wall street. they will be -- he will be put under the ringer but little chance he will get turned down. >> some worry the fed may be too powerful? >> they do but if they were worried about it then what would they be saying if president obama had replaced him with something -- someone of his hone party and choosing?

gwen: it would be a whole other conversation. we'll come back to that one. next week we'll bring you "washington week's" back-to-school edition. everything you need to know about what to expect in the nation's capital when everybody gets back to work after labor day. send us your questions to washingtonweek@pbs.org. keep up with daily developments on the newshour with jim lehrer and we'll see you again next week on "washington week." good night. every thursday, get a preview of our topics and panel with our "washington week" email alert. available at washingtonweekonline@pbs.org. >> "washington week" was produced by weta which is solely responsible for its content.

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