captioning sponsored by macneil/lehrer productions >> lehrer: good evening, i'm jim lehrer. deadly bombings in baghdad killed more than 100 people. >> woodruff: and i'm judy woodruff. on the pbs newshour tonight, the coordinated attacks targeted government sites. we get the latest from the iraqi capital. >> lehrer: also tonight, on afghanistan the u.s. commander and the top diplomat told congress the boost in troops will halt the taliban within a year. >> woodruff: meantime, britain marked its 100th combat death in afghanistan this year. the newshour's margaret warner

is in london. >> warner: prime minister gordon brown has pledged to send an additional 500 troops to afghanistan. but the war is increasingly unpopular here. i'll have a special report from britain. >> lehrer: president obama outlined new stimulus and jobs proposals and he called on americans to spend their way out of recession. we'll have a debate about his proposals. >> woodruff: and ray suarez continues our series on the nation's economy. tonight, how ann arbor, michigan, is being helped by a cockroach. >> sort of a geiger counter sound. >> exactly. >> it's coming from this here? >> exactly. >> lehrer: that's all coming up on tonight's pbs newshour. major funding for the pbs newshour is provided by: >> this is the engine that connects abundant grain from the

american heartland to haran's best selling whole wheat, while keeping 60 billion pounds of carbon out of the atmosphere every year. bnsf, the engine that connects us. >> what makes us an engine for the economy? plants across america. nearly 200,000 jobs created. we see beyond cars. monsanto. producing more. conserving more. improving farmers' lives. that's sustainable agriculture. more at producemoreconservemore.com. chevron. >> chevron. this is the power of human energy. >> and by the bill and melinda gates foundation. dedicated to the idea that all people deserve the chance to live a healthy productive life.

and with the ongoing support of these institutions and foundations. and... this program was made possible by the corporation for public broadcasting. and by contributions to your pbs station from viewers like you. thank you. >> lehrer: a wave of bombings across baghdad killed at least 127 iraqis today. at least 390 more were injured. the government blamed al-qaeda and saddam hussein loyalists. but there was no immediate claim of responsibility. gwen ifill has our coverage. >> ifill: at least four separate car bombs rocked the iraqi capital in late morning. two of the strikes appeared to be suicide attacks. the first targeted a police patrol in the city's dora district. the new location of the finance

ministry was also hit, as was a court complex, and a judicial training institute. the worst was at the courts complex, where a bomber plowed through a checkpoint and detonated a carload of explosives. the blast brought down parts of buildings and killed several judges, among dozens of others. the attacks shattered a month of relative calm. violence in iraq has diminished over the last 18 months and november saw the fewest civilian deaths since the u.s. invasion in 2003. still, militants have continued to mount spectacular, mass- casualty strikes. in late october, bombings outside three ministries killed more than 150 people and in august, attacks on two other government targets killed 122. amid today's violence, iraqi leaders announced long-delayed parliamentary elections will take place on march 7. that's two months later that originally planned.

>> ( translated ): we promise the iraqi people to hold good and honest elections that will meet their demands and honor their confidence. >> ifill: but members of prime minister nouri al-maliki's ruling party said the insurgents' mean to shake the public's confidence. >> ( translated ): today's bloody explosions are aimed to hinder the political process, specifically the electoral process. >> ifill: other lawmakers said iraqis are angry at the failure of their own forces to secure the country as the u.s. military drawdown continues. joining me from baghdad who reports from iraq for the christian science monitor and global post, an international news website. welcome. we have been through a period of relative calm it seems in iraq. i wonder if today's attacks aren't the beginning of the end of that. >> well certainly this is a city that's on edge, gwen. everyone is expecting more violence in the run-up until the elections in march now. we've seen that in august.

we've seen that in october with major bombings of ministries. this was kind of more of the same. the attacks were government institutions. in fact, two of them connected to the finance ministry and the justice ministry were based in buildings that were actually moved after their major ministries were bombed earlier in the year. so this really is connected a lot of people think to undermining the government, undermining faith in the security forces and a lot of people believe gearedality influencing the election. >> ifill: that's what i was going to ask next whether it's a coincidence that these attacks should occur just as as they were announcing the date for these elections. >> probably not a coincidence but certainly the feeling is that it takes more time than a couple of days to plan these kinds of attacks. the cycle of what we've seen is actually they've been about two months at a time. now these have probably been in the works and probably have been sitting in some car bomb factory somewhere waiting to

be detonated and waiting to set out into the city. but that is one of the issues that iraqi security forces are grappling with. they haven't been able to fully crack down on what they believe is al qaeda in iraq on the car bomb factories, on insurgents who might be creeping in. it's a particularly tricky time as the u.s. prepares to withdraw. all in all things are pretty edgy here in baghdad. >> ifill: can we talk about these elections for a moment. the date was finally set only after president obama intervened directly? >> he did intervene directly. it was months of delay and then weeks of political wrangling. they thought they had a deal. you'll probably remember that the parliament here actually passed an election law in november, but then fairly quickly it was vetoed by the sunni prime minister. now after that, that basically opened the door for everyone else to say we really didn't like that law much either. so the kurds held firm. they said they would boycott the elections. they pretty well stuck to their guns until

last-minute intervention by president obama with a phone call to the kurdish president in the north barzani in which he said that he would support resolving some of these issues that the kurds have wanted resolved for years. that seems to have broken the log jam. what that means though is that the most difficult work isn't really getting this election together. it's what happens after the election. >> ifill: are there any worries that today's violence had signal the beginning of a ramp-up of violence like this between now and the elections? >> there are actually those fears. the government has been sharing that for quite a while. iraqis in the streets have been bracing for that. they've expected violence. they always expect violence but they've become sort of used to a lull now that the violence has declined dramatically. what they're seeing though are these really big high profile attacks. and what seems to be an increase in crime that really does have people on edge. but certainly a common theme today out there at one of the bomb sight silts that i was at was that people believes this was political motivated.

those who don't believe it's al qaeda or the ba'athists as the government tells them believe actually that it's political parties who are trying to gain favor and trying to discredit other parties ahead of the elections. there is a lot of cynicism out there. >> ifill: from baghdad jane arraf of christian science monitor and global post. thank you for joining us. >> thank you. >> woodruff: and still to come on the pbs newshour, margaret warner reports from britain on falling public support for the country's military involvement in afghanistan. we look at president obama's proposal to spend more on infrastructure projects and on tax breaks for small businesses. and ray suarez has part two in our patchwork nation series. tonight: how college towns are faring in the recession. that's all ahead. but now, for some of the day's other headlines, over to hari sreenivasan in our newsroom. hari. >> hari: thanks, judy. pro-government militiamen in iran attacked anti-government protesters for a second day. they threw rocks and tear gas at

several thousand university students in tehran. more than 200 people were arrested after mass protests on monday in tehran and across the country. today, iran's top prosecutor demanded even tougher action. officials in india plan to charge a chicago man with helping to plan the terror attacks in mumbai last year. they said today they're building the case for an indictment of david coleman headley. he's already facing charges in the u.s. it's alleged headley scouted out the hotels and a jewish center that were targeted in mumbai. 166 people were killed in the siege. the first lethal injection in the u.s. to use a single drug was carried out in ohio today. kenneth biros, 51, was executed this morning. he was convicted of murdering a woman in 1991, and scattering her body parts in ohio and pennsylvania. state officials said the one- drug method would be less painful than a three-drug combination used in previous executions.

the u.s. senate has turned back restrictions on abortion funding in the health carol bill. the language was similar to a provision already included in house version of the bill. for now the senate measure allows insurance plans to cover abortions but not with federal funds. this decade this decade could turn out to be the warmest going back to 1850. that word came today from the head of the u.n. weather agency. he made those remarks at the conference on climate change in copenhagen, denmark. >> the decade 2000-2009 is very likely to be the warmest on record. so, in other words, this decade is going to be warmer than the 1990s, which itself were warmer than the 1980s and so on. so it is likely to be the warmest on record. >> hari: the u.n. agency said only the u.s. and canada have been having cooler conditions than average.

an early blizzard has moved into the u.s. midwest, in the region's first major storm of the season. the storm blasted western states a day earlier. by today, at least a foot of snow was expected to blanket parts of iowa, illinois, and wisconsin. the arctic blast brought winds gusting to 40 miles an hour. forecasters also warned flights would be delayed or canceled from chicago to denver. hundreds of police officers turned out in tacoma, washington today for a memorial service honoring four of their fallen. they were shot and killed last month at a coffee shop. later, police in seattle killed the suspected gunman. today, a procession of hundreds of police cars moved from an air force base down streets lined by somber crowds. the memorial service was held in the tacoma dome. the u.s. government will pay american indian tribes $3.4 billion to settle a suit over royalties. the deal ends a 13-year lawsuit brought by the tribes. they claimed the interior department cheated them out of billions of dollars in oil, gas and timber revenue dating back to 1887.

the proposed settlement must be approved by congress and a federal judge. wall street had a down day, over a new case of jitters about the global economy. the dow jones industrial average lost 104 points to close just below 10286. the nasdaq fell 16 points to close a fraction under 2173. those are some of the day's headlines. i'll be back at the end of the broadcast with a look at what you'll find on the new pbs newshour website. but for now, back to jim. >> lehrer: hari. now, three takes on the allied troop buildup in afghanistan. first, in the u.s. congress, more testimony. congressional correspondent kwame holman begins our coverage. >> holman: hours before the hearings began in washington, secretary of defense robert gates got the red carpet treatment in kabul. he was the first u.s. cabinet member to visit since president obama announced his new war strategy. but afghan president hamid karzai quickly warned it might

be five years before afghanistan can handle its own security, and even then, only with outside funding. >> for a number of years, maybe for another 15 to 20 years afghanistan will not be able to sustain a force of that nature and capability with its own resources. >> holman: gates did not dispute karzai. but he expressed a desire to see the u.s. timetable play out at least as well as planned. >> the reality is as the president has made clear it is our expectation that on a gradual conditions based premise, that we will reduce our forces after july 2011. >> holman: the u.s. role in afghanistan continued to be debated in washington, as well. here at the capitol, the top american commander and the u.s. ambassador to afghanistan said they now are united in

supporting the new plan, despite earlier reports they disagreed on the need for more troops. ambassador karl eikenberry had expressed misgivings about a surge, in a series of leaked cables to washington. but he told the house armed services committee he now endorses the approach advocated by general stanley mcchrystal. >> i am unequivocally in support of this mission, and i am exactly aligned with general mcchrystal here to my right in moving forward now to vigorously implement the assigned mission. >> holman: the general said he, too, was confident in the president's new war plan, including the provision to start withdrawing in 18 months. but he also suggested it could take longer. >> results may come more quickly, and we may demonstrate progress towards measurable objectives, but the sober fact is that there are no silver bullets. ultimate success will be the cumulative effect of sustained pressure across multiple lines of operation. >> holman: in response, republicans renewed their skepticism.

"buck" mckeon of california asked if the july 2011 timetable would tie mcchrystal's hands. >> do you feel that you will have the flexibility a year from now, december of 2010, to ask for additional forces if your assessment at that point points to those additional forces needed for success? >> i believe i'll have the responsibility to give my best military advice, whichever the direction the situation is going. i do not anticipate the requirement to ask for additional forces. >> holman: on the other hand, some democrats questioned whether the troop increase actually would improve the situation in afghanistan. chellie pingree represents maine. >> in my opinion, we've reached a security plateau where no matter how many troops we commit, how many dollars we spend, how many aid workers we send, or elections that we have

or re- have in afghanistan, we cannot significantly improve the security situation. >> holman: later, the two men crossed the capitol to testify before the senate's armed services committee. meanwhile, "the new york times" reported the obama administration has put intense pressure on pakistan to fight the taliban on its side of the border. the report said the pakistanis were warned last month that unless they do more, the u.s. is ready to step up attacks by drone aircraft and resume special operations raids in pakistani territory. >> lehrer: there is skepticism, as well as support, from both democrats and republicans in congress. we hear from two skeptics now following our newshour interviews the last several days with administration officials advancing the president's program. mike pence, republican of indiana is a member of the foreign affairs committee and holds the third spot in the house g.o.p. leadership. james mcgovern, democrat of massachusetts, has been a critic of the mcchrystal, now the

president's plan, from the beginning. congressman mcgovern, you remain opposed to sending 30,000 troops to afghanistan? >> i do. i think it's a mistake. i'm not quite sure what the mission is. our enemy is al qaeda. they're in pakistan not in afghanistan. we're told that maybe there's 100 members of al qaeda in afghanistan. do we need that many troops to go after 100 members of al qaeda? you mentioned earlier on your show that secretary gates meeting with president karzai and president karzai saying he expects us to be there for at least five years. then he says he expects us to bank roll his security forces for the next 15 to 20 years. this is a huge commitment that i don't believe is in our national security interest. >> lehrer: what general mcchrystal said today to the house committee that he thought that within a year he would know whether or not at least we would know whether or not the taliban has been ...

the taliban's progress has been thwarted. you don't buy that? >> i don't think anybody believes in a year or a year-and-a-half we're going to significantly drawback our troops. the administration has spent the last year kind of bending over backwards telling people that there really isn't a timetable. it is hard for me to see how you're going to train the number of afghan security forces given the fact that 90% of them are ill literal. they can't read or write or can't add or subtract. to train them in a significant way in the next year, year-and-a-half. so i don't believe we're going to leave in a year-and-a-half. >> lehrer: congressman pence, you have been questioning the very idea of an 18-month withdrawal, not withdrawal deadline but a target date to begin the withdrawal. you still feel the same way? >> well, let me say, jim, first what i do agree with the president on. i think house republicans like most americans appreciate the president making a decision to

respond to the call for reinforcements in the field. after three months of deliberations, the president has essentially given general mcchrystal, his own picked general for the theater in afghanistan the resources and the manpower that he says he needs to get the job done and come home safe. so we welcome that and we support the president's policy. i also think it was important last week, jim, that the president took some time a week ago at west point to remind the american people what the stakes are here. the president reminded us that we were attacked from the al qaeda. and their host the taliban from within afghanistan and that really the security of that region and the security of the world depends on our success there. my only hesitation-- and i think it's the hesitation of many of my colleague s in congress-- is again is the suggestion of an artificial time line for withdrawal. you know, i understand that

jim mcgovern is a very honorable guy and a respected colleague. we respectfully disagreed on the last surge in iraq. i think we respectfully disagree on this surge. our concern is now that the president has put this arbitrary timetable to begin the process of withdrawal in july of 2011 that we're going to see many democrats who oppose the use of military force there as they did in iraq to try and impose legislatively artificial timetables on withdrawal and we'll be opposing that very strongly. >> lehrer: what about congressman mcgovern's point that he just made that he thinks this is a meaningless target date. >> well, you know, has been encouraging since our hearing before the foreign affairs committee last week some of the testimony we heard today is that we're hearing both the secretary of defense, the secretary of state and now general mcchrystal himself suggesting that july, 2011, is

not a hard date for beginning to withdraw, that there's flexibility there. we welcome that. but i'm somebody that believes it's never a good idea to tell the enemy when you're going to quit fighting on a battlefield. now that our military commanders are clarifying that this is a looser date , you know, if jim is right on that, then let's just leave out these arbitrary time lines. let's give our soldiers what they need to get the job done and come home as soon as we can. >> lehrer: you would not support that, would you, congressman? >> i believe we should have a exit strategy and a timetable. >> lehrer: a realtime table. >> a realtime table. you know, right now we're stuck in a situation where we have armed and financed a government in afghanistan that is corrupt and incompetent. after eight years of us bank rolling them and training their... the security forces, the best we got from them was a rigged election. and a government that is filled with corruption. that to me is unacceptable. our real enemy is in

pakistan. that's where al qaeda is. al qaeda is not a problem in afghanistan. and we are now involved in this issue trying to do some nation building in afghanistan. quite frankly we need to do more nation building back here in the united states. >> lehrer: congressman, let me ask you this. your opposition to this. is it strong enough that you would lead an effort to unfund this 30,000 troop surge? >> well, here's what i believe we should do. i hope there would be bipartisan agreement on this. this escalation of 30,000 additional american forces, this is a big deal. and i would think that it would be appropriate for the white house to make their request to congress sooner rather than later so that all of us in congress, both critics and supporters of this escalation, can have a full debate and vote up or down. as it stands right now, this escalation is beginning. congress really has no role. we're just sitting here watching this. we'll be asked to fund this war kind of in a de facto way come march or april. i don't think that's the right

way to do this. >> lehrer: congressman pence, would you agree to that kind of debate? do you think that's a good thing? >> i think it would be a very good thing. i think at the end of the day you would see congress, maybe not jim and a few of his colleagues but i think you would see a majority in congress support this effort to respond to general mcchrystal's request for reinforcements. i do think as we were able to do in the last congress, i think you would see a majority vote to oppose the imposition of any artificial time lines. you know, jim mcgovern knows and jim you should know, i'm somebody that really believes in deliberation in the people's house. we would certainly welcome that. but there can be no mistaking here that an american success in afghanistan is the imperative that must be the objective of this nation and

in my judgment the president has made the right decision in deciding to deploy reinforcements. we ought to support that without the artificial time lines for withdrawal. we ought to support it as strongly as we can. >> lehrer: quickly, gentlemen, has a practical matter isn't that barn door already opened? some of these marines are going before christmas. isn't this a moot issue, congressman mcgovern some. >> the troops are already going. i don't think congress is going to have a opportunity to deliberate the way i think we should when it comes to issues of war. but, look at. we are making a major financial commitment. we are putting our young men and women 's lives at risk for an incompetent and corrupt government. our enemy is in pakistan. al qaeda is our enemy. let's go after the bad guys and not get mired down in a war in afghanistan that quite frankly i think is mistaken. it is costing us a great deal. >> lehrer: in a word, congressman pence, you disagree with that basic premise of congressman

mcgovern, right? >> i really do. again i think one of the best things the president did last tuesday night at west point was to remind the american people what happened on that day in september of 2001. i was here at the capitol that day. i watched the smoke rise from the pentagon. we were attacked from afghanistan. and we must.... >> and i was there too. i wanto go after al qaeda. >> lehrer: all right. we'll leave it there. thank you both on that note of disagreement. >> thank you, jim. >> thank you. >> lehrer: and now, afghan war support, take three. margaret warner reports from britain. >> warner: for 2½ years, this tranquil english village, wootton bassett, has embraced a mournful ritual. every few weeks, the townspeople close their shops and offices to stand outside as the coffins of british soldiers killed in

afghanistan are driven through town from a royal air force base nearby. anne bevis helps organize the gatherings. >> our tribute is purely for what that soldier has done. he's given his life for his country so a few moments of our time is very little in comparison. >> warner: but local feelings about the afghan war are more complicated. >> it's in respect for the lads who lost their lives. >> warner: you support the troops. do you support the war in afghanistan? >> no, i don't. very strongly i wish, my personal feelings, i wish they'd bring them all home. >> i think the people in wootton bassett are representative of a very wide-spread feeling, which is deep sympathy for the troops and a feeling actually of outrage on their behalf that is quite new in british politics. >> warner: "guardian" newspaper columnist jonathan freedland says british public opinion shifted dramatically against the war this year after the current mission in helmand province advertised as peacekeeping turned bloody. nearly 240 british soldiers have been killed, a far higher per- capita death rate than u.s.

forces. >> that had been presented to britain as being a deployment that would happen without, in the words of the defense secretary at the time, without a shot being fired. this would be a war with no human cost. the simple fact that changed the debate in britain i think on afghanistan was a matter of blood and lives lost. >> warner: a memorial in this quiet park in reading stands as a symbol of imperial britain's willingness to fight and die overseas in centuries past. it honors a british force that fought an overwhelming afghan army 130 years ago near kandahar and lost some 300 men. >> warner: so the weight of britain's disastrous earlier wars in afghanistan hangs heavy here. the question is: do the british people have the stomach for another afghan campaign that will carve more names on memorials like this one?

prime minister gordon brown - who's sending 500 more troops to join the 9,000 there, says they must. he insists the afghan war will make britain safer. >> as long as three-quarters of the most serious terrorist plots against britain have links to those pakistani-afghan border areas, we would be failing in our duty if we did not work with our allies to deal with the problem where it starts. >> warner: his foreign secretary david milliband says britain can't defend against terrorism only at home. >> if you want to avoid the other sides scoring goals or scoring points, you don't just mass your defense at the goal line. you have to actually get up the field. >> warner: that's proving a hard sell to a british public that felt it was lied to about the rationale for the iraq war - now the subject of a public inquiry. there were lots of cynical voices at london's outdoor market in petticoat lane. not one person we spoke to supported the afghan war. >> my view on the war in afghanistan is, tony blair took

us into a war on lies. we send our troops who ain't even got a flak jacket, don't even got proper boots, to war. let the politicians go out there and do exactly what our soldiers have got to with the equipment, and see how quick they'd run and do it. >> warner: another special factor in the debate here is a widespread view that british troops were sent to war without the protective armor and helicopters they needed. >> there is a strong cause for concern about the way in which our troops have been equipped. its been a national shame in many ways. >> warner: retired army col. richard kemp, who commanded british forces in afghanistan in 2003 says the government badly under-funded the army's equipment budget, until recently. without conceding the point, secretary milliband says the government is investing more now. >> as the number of forces has risen and as the job has changed because the insurgency adopted new tactics, we've had to change and upgrade our equipment.

>> warner: but kemp says the upgrades aren't coming fast enough. >> it's taken the british armed forces a good six months or more to deploy a handful of merlin helicopters from iraq into afghanistan. if we'd had been operating at that kind of speed in 1940, we wouldn't have won the battle of britain. >> warner: many britons also struggle with browns rationale that the fighting in afghanistan will ease the threat of homegrown terrorism. commuter sue jenkins buys browns argument, but only up to a point. >> if they're helping me go to work knowing i'm going to get to work safety, that's brilliant, but at the same time, you do wonder as time goes on, is there another way? >> the reality is that not a single terrorist arrested in this country has had any links to afghanistan. >> warner: we met "new statesman" magazine columnist mehdi hasan at the kings cross underground stop, site of the 2005 bombings perpetrated by

british citizens of pakistani origin. >> what gets people going here, especially the slightly more hotheaded younger members of the british muslim population, especially from pakistani communities, is foreign wars. and they see on the news british troops banging down doors in the middle of the night in helmand province in afghanistan, and that cancels out all the counter-extremism work you do at home. >> warner: voters hoping for a quick pull-out don't even get a hearing from the opposition. conservative party leader david cameron supports the afghan war, and made a highly publicized trip there his weekend. even in the election coming up next year, says shadow foreign minister david lidington, the tories don't plan to make the war an issue. >> but were not going to be out scoring political points on afghanistan for the sake of it. we've got troops out in the field, what those soldiers want to see is the soldiers fighting and giving them united support with squabbling with each other. >> warner: hasan sees a bit more political calculation than that. >> british political leaders, like political leaders across the world, don't want to look

weak on national security. >> warner: president obama's plan for a quick surge, with a 2011 date to begin withdrawal, has been a gift to both parties facing voters asking when british troops are coming home, freedland says. >> president obama has allowed them an easy way out of that question, which is, well, were on a path that leads toward the exit, and that's where they want to be. >> warner: for the war-weary british public, that exit cant come soon enough. >> woodruff: now we turn our attention to the u.s. economy and to the question of creating jobs. unemployment remains at 10% the highest level in more than 25 years and it was at the top of the agenda in washington today. ( applause ) >> woodruff: president obama outlined new multi-billion-

dollar plans today to crank up the economy with 10% of the workforce unemployed, and public discontent rising. >> for even though we have reduced the deluge of job losses to a relative trickle, we are not yet creating jobs at a pace to help all those families who have been swept up in the flood. >> the president said the nation must "spend our way out of this recession" by cutting taxes to help small businesses grow, funding public works projects, and offering incentives to make homes more energy efficient. the money would come from $200 billion still unspent in the government's financial rescue program, the tarp. senate republican leader mitch mcconnell criticized the plan. >> tarp was a loan. a loan to be paid back and we know in fact that a number of the banks are paying it back. under the law as i understand it, any money paid back goes to the deficit.

>> woodruff: the president, in his speech, suggested republicans helped create today's big deficits. and he dismissed partisan criticism of his spending plans. >> there are those who claim we have to choose between paying down our deficits on the one hand, and investing in job creation and economic growth on the other. but this is a false choice. >> woodruff: still, a top house republican, eric cantor of virginia, said his party simply believes the president's ideas are wrong. >> that is not something that we think worked back in january, nor do we believe that it'll work again today. you just can't spend money that we don't have and keep doing it. >> woodruff: in the meantime, a survey today by the "business roundtable" found the number of major companies planning layoffs in the next six months outnumber those planning to hire. >> woodruff: we get some analysis of our own now about the president's proposals and

whether more should be done to spur job creation. it comes from paul krugman, professor of economics at princeton university and a columnist for the new york times. he won the nobel prize for economics last year. and bruce bartlett. he served as an economic adviser in the reagan administration and in the treasury department during the george h.w. bush administration. he's a columnist for forbes and writes a blog on economic issues. his latest book is "the new american economy." thank you both for being with us. paul krugman, to you first. you've been calling on the president for some time to do more to create jobs. what do you think of his proposals today? >> what i've been saying basically is show me the money. concept ally it kind of makes sense. it's a bunch of things that are ideas that i and other people have been advocating. it is clearly a plan to sort of do job creation on the cheat. they're trying to leverage a limited amount funds to do a disproportionate amount of job creation. okay stuff.

how big? if we're talking about $60 women i don't know, this is not going to do it. if it is $200 billion, we're talking at least something halfway serious . >> woodruff: you're saying a little bit is okay but he should have done still more. >> we don't know how much he's doing, right? i read his speech. i listened to it. it's all general, conceptual stuff. we don't have a number on what this is going to be. that makes all the difference. it's the scale of the thing. it's not something where you can say... the idea is good. it's a nice menu of stuff. but are they adequately funded to do what we need to do, to deal with this terrible unemployment problem? >> woodruff: bruce bartlett, what do you make of it? i did see the associated press said it roughly maybe relates to what congress is considering. $170 billion. but whatever the price tag is, what do you think of the approach? >> well i'm an agnostic as far as the details of the proposals the president has put forward. i'm notness sarm opposed to them.

what i'm i'm owe supposed too, however, is treating the turn money as a slush fund that we can use for whatever we feel like spending the money on. if these proposals the president has put forward are justified it ought to be handled in the normal appropriations process and not just rushed in to action simply because we've got some money lying around that we think we can spend. >> woodruff: the president's argument, he said words to the effect, we ought to take some of this money that would have gone just for the banks that we have still to spend and put it on main street. what's wrong with that? >> i just think it ought to be done through congress. i think the problem is the people don't quite understand where this tarp money came from. the original tarp program was like $700 billion. congress estimated that maybe half of that money would be lost permanently. so that was the amount that was actually budgeted. about $350 billion. now it looks as if the money that will be lost is only about $150 billion so you've

got money that you apropose rated that now ... appropriated that now is available and that the original assumption was always that that money would be used to pay down the deficit. i am concerned about the deficit. >> woodruff: i want to come back to you on some of the specifics that the president was suggesting. let me ask paul krugman about using the tarp money, the financial rescue money, switching that money over to create jobs. >> well, you know, there is money that was not expected to be there. it's available. i understand bruce's concern about the appropriations mechanism but you have to bear in mind we have an extremely dysfunctional congress. we have what is really an ongoing economic emergency. i mean it's not just what we're not creating jobs. the level of unemployment we've got is doing enormous damage. so i think the president is justified in reaching for whatever mechanism he can. if he can say, you know, it really doesn't make a difference in terms of the economics, where it's funded from. if he can say, look, what

we're doing is redirecting funds and make it happen, then he needs to do it. ultimately what we have is a jobs crisis. action must be taken. i think the paperwork is relatively less important at this point. >> woodruff: you're saying congress is dysfunctional. why not go this route? >> i thought if we were facing the kind of crisis situation that we were when tarp and the original stimulus were enacted, that would be one thing. but i don't think we're facing that. i think we did enact the stimulus. the money... there's a lot of money still to come from that in the pipeline. i think we've only spent about a fourth of it so far. the unemployment rate is coming down. i think that there's a case for let's wait a little while. why not wait until after the president submits his budget in february. why rush to act this minute? it just, you get the feeling it's like you put on an old jacket and found a $20 in your pocket that you forgot about. you feel like this is free money to just spend. i'm worried about that. >> can i just say i violently disagree with that.

you may say it's not a crisis situation. you know, we have long-term unemployment is continuing to rise. people's savings are being exhausted. young people are facing the prospect of graduating from college into a dismal labor market. we know from a lot of evidence that that will destroy their earnings prospects not just for a year or two but for decades. to say let's wait. we're pretty sure that we're not going to get a really good bounce out of what's left in the stimulus. the peak impact on the economy's growth rate is probably already behind us. to say, well, let's just wait and see. that's easy to say if you have a job, if you're, you know, if you're a person well established in his life's career. but we're suffering enormous harm to the nation's future by not acting now. >> woodruff: what about that? >> i am concerned about unemployment, but keep in mind that the stimulus, original stimulus program that obama's advisors always said would have its peak impact eight

quarters after its enactment. so they themselves always said that the money was going to have its most important impact next year. a lot of the stuff that has high impact is things like public works programs which the president would fund some more of. but it's not clear to me that there's worthwhile things out there to be funded that aren't already being funded. you know? >> i mean there's tons. we know that the stimulus originally was low-ball. it was below what even the administration's only economist thought was appropriate. we now have, i don't know what they were saying then. but what they say now is that the peak impact on jobs is about the middle of this coming year. that there is a widespread fear. a lot of people, you know, independent business economists are worried that as the stimulus fades out, we may be heading for a renewed recession, a double dip. so the time is wasting. if we sit and don't do anything, we could be facing a very, very nasty economy by

the time we finally get around to doing something. >> woodruff: you don't agree with that? >> i don't think there's a consensus by any means that we're going into a double-dip or anything like that. the last time i checked the consensus forecast, economists were looking at 2.7% real growth next year which is pretty good. i'm just... one of the things that concerns me is the idea that the administration always said the stimulus is going to take care of itself as far as the budget is concerned. if we make these things kind of semi-permanent, i worry about the deficit. >> woodruff: paul krugman let me come back to you on this price tag for this jobs plan. i mentioned earlier the associated press through out a number of maybe $170 billion roughly matching what congress is considering. if that's how much money it is and if it is what the president described today, infrastructure, spending, tax credits, businesses, what do you think? >> well, it's way short of what i would like to see. i mean if i could do it. if i thought it could be

passed through congress, i would call for much more. i mean we are looking, bruce mentioned consensus forecast. basically almost everyone is expecting unkbloim to remain at levels that we would have considered totally disastrous, unacceptable not just through next year but for several years to come. we're looking at a really depressed economy. the kind of number that if it really is $170 billion, you know, they're doing stuff that might give a fairly big bang for the buck in job creation but it will still leave unemployment almost surely above 8% at the end of next year, almost surely above 7% at the end of 2011. those are not things we should be accepting. we should be not saying, "well, that's all we can do. we've got arbitrary limits set by congressional notions of what's responsible." we're just not doing enough. i'm much more heartened at $170 billion than some of the numbers i've heard earlier this afternoon which may or may not have been right. it's not nearly big enough.

>> woodruff: if you had to put a price tag on what you think the government should do, what would it be? >> as i said before i think we've dochb enough. we ought to wait and see what happens. i just don't think that the case for rushing forward in a crisis situation with a lot more money right now is quite justified. i think we can wait a little while, a couple of months. >> woodruff: bruce bartlett, paul krugman, gentlemen, thank you both. >> lehrer: finally tonight, patchwork nation, our on-air and online collaboration with the christian science monitor. this week, ray suarez is reporting on how the recession is affecting different types of communities across the united states. tonight, he reports from what the patchwork nation project calls a "campus and career center" the college town of ann arbor, michigan. >> suarez: let's say i wanted to take you to a city with a vibrant downtown. a cutting edge information technology incubator, filled with smart young entrepreneurs.

and a deli packed with foodies waiting to buy $40 cheese. you might be surprised to find yourself in ann arbor, michigan. the city is like a life preserver, floating in a state whose economy has been sinking for a decade. michigan is home to the nation's highest unemployment rate, 30% in detroit, and a full-blown collapse of its manufacturing economy. but, ann arbor, built around the university of michigan campus is--literally--buzzing with activity. >>that's not a neuron, is it? >> suarez: in the basement of a non-descript office building, greg gage and tim marzullo are tinkering with a machine that records the neural activity of a cockroach's leg. so this, this that i'm hearing, this sort of geiger counter sound. >> yeah, exactly. >> suarez: its coming from this little leg here? >> exactly. what we have here in our hands, these are the uh cockroaches we're using. >> suarez: gage and marzullo, an engineer and a neurobiologist,

teamed up as backyard brains, to build inexpensive equipment for students to measure electrical activity in nerve cells. they hope their invention will soon be used in high school biology classes across the country. they are among a group of some thirty student entrepreneurs who make up tech arb, an incubator, funded partly by the university of michigan, for students and recent graduates, who want to turn their classroom projects into businesses. although tech arb opened just this summer, some of its firms, like mobiata, which makes travel applications for iphones, are already making money. >> we're on target to do over a million in revenue for the first year. >> suarez: venture capitalist marc weiser and u.m. professor thomas zurbuchen started tech arb with the idea that michigan needs more homegrown entrepreneurs to propel the state's economy. >> if michigan is going to

reinvent itself, its going to start by trying to diversify ourselves and reinvent ourselves across the board and that takes a change of mindset and the best place to change that mindset is within a university environment where you've got young minds who are eager, who have an opportunity in front of them, and they're still looking forward, not looking backwards. >> what we want to be at the university is a place that is really a change agent in our environment. >> suarez: in a speech to students and faculty in october, university president mary sue coleman said u.m. is capitalizing on the economic downturn. >> just as we are recruiting great scholars when other universities have all but shuttered their employment offices, we are moving forward with a research expansion unlike any other. >> suarez: coleman points to the pfizer research and development campus in ann arbor. when the pharmaceutical giant left town, so did 2,500 high- paying jobs, along with an annual $4 million in tax revenue for the city. when no commercial buyer was

interested, the university bought the 174 acre site. it's counter intuitive in tough times to make such an audacious play, to spend that kind of money. we're not talking about a million or two, it's a big, big purchase. >> yes, well, it was $108 million. let me give you a relative value here. to build that kind of lab space costs $600 a square foot. we got it for less than $50 a square foot, so for us it was a huge bargain. we're making the investments at a good price that we believe is going to be an enormous return. >> suarez: coleman's betting she can fill the lab space by attracting private companies and non-profits looking to partner with the university. ann arbor has already captured more than $100 million in federal stimulus funds for research into products like new car batteries. across the country, cities like ann arbor, homes to big public universities, are well

positioned to survive and thrive even during economic downturns. they bring in tens of thousands of students, all bringing with them, dollars earned, saved and borrowed in other places, to be spent right here. >> this is an historic district. >> suarez: ann arbor's mayor, john hieftje, sees his job as making sure the city remains a desirable place to live. if it is, he says, talented researchers, along with their out-of-state dollars will continue to come to the university and settle their families in ann arbor. >> people who are doing this type of research have the world to choose from. we need to maintain a very high quality of life in our city to be able to attract the, frankly the brilliant people that we need to, to keep things moving forward. >> suarez: one attraction is a high concentration of gourmet food eateries. and no visit to ann arbor is complete without a stop at zingerman's deli, a local institution for the past 27 years. a frank and kathy ½ italian sub

can i have the large please? even in the midst of a recession people still flock here and shell out as much as $16 for a sandwich. >> when people do spend their money they want to spend it on something really good. >> suarez: a simple enough formula. zingerman's co-founders ari weinzweig and paul saginaw concede, the recession has hit the bottom line. but they're still hiring new people, and rolling out new product lines. >> so are we impacted? absolutely. do we go out and make a living anyway? absolutely. >> suarez: zingermans, which has weathered tough times before, has grown into a group of 11 distinct businesses, with 34 million dollars in annual revenue - and more than 500 employees. it would have been easy to begin moving pieces of a growing business to cheaper parts of the country, or to franchise. but weinzweig and saginaw have stuck to their original vision statement. >> and in that vision among

other things it specifically says that we aren't going to open anything outside the ann arbor area. >> suarez: mayor heeftya says ann arbor reaps the benefits of that fierce loyalty. but, he also warns that successful local businesses can only buoy the city's economy for so long. >> the tide that is sweeping through the state, if somehow that wave doesn't turn around 5 years from now, eventually it'll just wear us down. so, it's going to be difficult but we will, we will certainly be doing our best to make sure that we stay above that wave. >> suarez: still, campus and career centers like ann arbor are poised to prosper once an economic recovery does take hold, says dante chinni, director of the patchwork nation project. >> they're riding out the recession better, but i also think in the long run, once we get past the recession, we're still going to have a good 20 years of kind of sorting through a bigger economic restructuring we're going to have to do in the country and these places are kind of well positioned to kind of rise above that. >> suarez: and keep the campus and career counties attractive

to coming generations of highly educated, highly skilled workers, with very portable skills. how farmers are faring in the recession. >> woodruff: tomorrow ray reports from america's heartland on how farmers are faring in the recession. >> lehrer: again, the major developments of the day. a wave of bombings across baghdad killed at least 127 iraqis. at least 390 more were injured. afghan president karzai said his government might need at least five years to take over all security. and the u.s. commander in afghanistan, general stanley mcchrystal, said he thinks he can begin withdrawing u.s. forces in 2011, without asking for more. judy. >> woodruff: jim, the newshour continues now online. for a preview of what you'll find this evening on our brand new website. back to hari sreenivasan in our newsroom. hari. >> hari: judy, on our web site today we've given economic correspondent paul solman's making sense series a makeover. you can watch a preview of his upcoming story about older workers in search of jobs.

and ask paul questions about the recession. the president's plan for creating jobs or other economic topics on your mind. ray suarez has two video postcards from ann arbor, michigan. one on zingerman's deli and the other on the rise of digital media. and on jeffrey brown's art beat blog our correspondents pick their favorite books, movies and performances of 2009. all of that, and our new blog of news and insight it's called 'the rundown', and we update it throughout the day. you can find it all at newshour.pbs.org. judy. >> woodruff: and that's the newshour for tonight. i'm judy woodruff. jim. >> lehrer: thanks, judy. we'll see you on-line and again here tomorrow evening. i'm jim lehrer. thank you and good night. major funding for the pbs newshour is provided by:

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