captioning sponsored by macneil/lehrer productions >> lehrer: good evening. i'm jim lehrer. the u.s. supreme court overturns decades of limits on corporate campaign contributions. >> woodruff: and i'm judy woodruff. on the "newshour" tonight, marcia coyle of "the national law journal" tells us what happened inside the court. and we get analysis of a decision the obama administration called a victory for special interests. >> lehrer: the president also moved today to restrict risk- taking by one group in particular-- big banks. a wall street reaction followed- - a tumble of more than 200 points on the dow jones industrial average.

>> woodruff: we'll have back to back interviews with treasury secretary timothy geithner and a leading republican congressman scott garrett. >> lehrer: then, more aid arrives in haiti by ship and by air. some shops re-open even as thousands still live on the streets. >> reporter: are you going to try to stay here, or are you going to try to move somewhere? >> well, moving somewhere... the big question mark is where. because, actually, no where in port-au-prince is safe. >> woodruff: margaret warner gets the latest from martin smith of "frontline" in port-au-prince. >> lehrer: that's all ahead on tonight's "newshour." major funding for the pbs newshour is 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 $62 million 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. >> 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. we see beyond cars. pacific life. the william and flora hewlett foundation, working to solve social and environmental problems at home and around the world.

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 supreme court delivered a landmark decision on campaign finance today. it has the potential to shake up the national political scene-- starting with this fall's mid- term elections. jeffrey brown begins our coverage. >> brown: it was a five to four decision-- to wipe away limits on corporate and labor union spending in campaigns for president and congress. justice anthony kennedy wrote the majority opinion-- joined by chief justice john roberts, and justices samuel alito, antonin scalia and clarence thomas. they threw out key provisions of

campaign finance laws dating back to 1907, plus two of the high court's own decisions from 1990 and 2003. specifically, the justices overturned a ban on letting companies and unions tap their own treasuries to produce their own campaign ads. the decision also eliminated the so-called mccain-feingold ban on issue-oriented ads within 30 days of a primary, and 60 days of a general election. the justices dissenting from those conclusions were john paul stevens, ruth bader ginsburg, stephen breyer and sonia sotomayor. the case at issue involved a 90- minute film attacking hillary clinton during her 2008 run for president. >> hillary rodham clinton has undoubtedly become one of the most divisive figures in america.... >> brown: the conservative group "citizens united" produced the film and wanted to run ads for it on television, and distribute it through on-demand cable.

instead, federal courts ruled it was akin to a long campaign ad, and should be regulated like one. ultimately, the supreme court disagreed. but today's decision did leave in place other restrictions, including a century-old ban on donations by companies directly to candidates for federal office. direct contributions from political action committees-- created by corporations, unions and individuals-- will still be allowed. the decision is expected to leave candidates, parties and contributors scrambling to adjust to the new reality with crucial congressional elections now 10 months away. >> brown: marcia coyle of the national law journal was of course at the court this morning... and is now here with us. >> thanks, jeff glf i say "of course" because this was called a special sitting of the court. >> we knew something was afoot. this was an argument week at the court, and the court generally sits mondays through wednesdays.

we weren't expecting any decisions or orders from the court until next monday. at the end of yesterday's oral arguments, the chief announced that there would be a special sitting. all speculation surrounded the citizens united case, which has been outstanding-- >> brown: and much-anticipated. >> yes, since last september. >> brown: justice kennedy writing for the majority went write to the first amendment. we have a quote: >> justice kennedy feels that the ban on corporate spending, he said interferes with what he called the open marketplace of ideas, which is protected by the first amendment. this particular ban, he said, was censorship, and its reach was vast. it suppressed speech by nonprofit and for-profit

corporations, big and small. he also said federal campaign finance regulation today is so complex and so burdensome, that it tully chills speech before the laws are even applied. >> brown: now, i said this stemmed from this political film with hillary clinton, and legal experts thought it could have been narrowly decide then but then there was an unusual twist. the court asked for a second hearing. >> that's right, jeff. at the end of last term in june, the court ordered on the parties in the case, on its own initiative, to argue whether the court should overturn a 1990 campaign finance precedent that imposed and upheld the ban on corporate spending, and also whether it should overturn a 2003 decision involving a provision of what we call the macane-fine gold campaign finance act which put restrictions on the use of general treasury funds by corporations and unions when

they wanted to do election advertising. >> brown: and they took this on their own initiative, so they heard it and decided to broaden it out and that clearly went to the heart of what annoyed the dissent, clearly. >> yes. >> brown: we have a quote here from justice stevens: >> justice stevens said basically that the court was elevating its own agenda over what the litigants in this case originally sought. also, over the history of congressional regulation of corporations and elections. he-- he also said that he believed that corporations were not human beings, and that this was a distinction that was significant in the context of elections, that corporations, their interests have fundamental

conflicts with the interests of the electorate. >> brown: the ruling intactz a number of state laws as well. >> it does. i believe roughly half the states have similar bans on corporate spending, and they're likely to be invalidated now because this was a ruling under the first amendment, and it will apply to the states. >> brown: given that this is an undoing of a decision as recently as 2003, you said. >> yes glownt makeup of the court, right, the change of the makeup must have played some role. >> i think it definitely did. with justice o'connor's departure from the court and the addition of chief justice roberts and justice alito, the court's campaign finance rulings have swung from deference to congressional regulation to basically deregulation. and justice alito, his substitution for justice o'connor on the bench made the difference here. he was

the decisive vote. she in the past had been deferent to congressional regulation of campaign finance. >> brown: all right, marcia coyle, as always, thanks very much. >> my pleasure, jeff. >> lehrer: reaction to the court's decision ran the spectrum. president obama condemned it. in a statement, he warned the result will be a "stampede of special interest money in our politics." but many republicans welcomed the decision. house minority leader john boehner called it "a big win for the first amendment." now, the impact of today's ruling to sort that out, we're joined by steve simpson, the lead attorney on campaign finance law at the institute for justice. and monica yoon of the brennan center for justice at new york university's school of law. they both filed friend of the court briefs on opposing sides in the case. mr. simpson first, president obama said this is going to lead to a stamp pede of special interest money in politics. is that how you see it? >> it very well might lead to a lot more spending by corporations and special

interest, but that is precisely what the first amendment was designed to allow. a lot of spending by a lot of different people and groups in an election is called a debate, and that is precisely what the first amendment protects. >> lehrer: miss yoon you agree there will be a lot more money? >> absolute. i have to disagree. the first amendment is about freedom of speech. it's not about freedom to spend unlimited amounts of money. it's that difference that makes our political system a democracy ruled by the people rather than a plutocracy ruled by money or those who have the most money. but we think that the impact of the-- this decision decision it perhaps even a bigger judicial power grab than bush versus gore. that affected only one election and this decision is going to affect every election. >> brown: do you agree with

that, it will affect every election. >> yes. >> brown: but you think positively. >> it allows people to speak out and influence the course of the government and the course of electiones. one of the things that justice kennedy said in today's decision was the first amendment protects not only speech. it protects speakers as well. if speakers are to speak effectively, they have to spend money. >> brown: what about president t obama's point that the people who have the power, they already have the power. this is going to give them more power, the power to contribute more money, meaning corporations, labor unions, and whatever, directly. >> well, but the power we're talking about here is the power of influencing what people think. one of the things that justice kennedy said in his decision is if you're concerned about special interests allow them to speak and entrust the people and the voters to discern between truth and falsity. as justice kennedy put it, the first amendment protects the right to think for ourselves. and having government regulate who can speak is essentially

allowing candidates and politicians to control speech. >> brown: you don't see it this way miss yoon, in terms of the poterrible negative impact of this. >> there are two crucial problems with both the court's reasoning and with what mr. simpson just said. first of all, speech is different from money. no one is talking about corporation not being able to speak. corporation, to the extent that they can speak, not having mouths, speak all the time. they speak through lobbyists. they speak through advertisements. but what the marketplace of ideas is not about is the marketplace of ideas does not mean that you have the right to basically buy an election. there's a difference between speaking freely and the sort of influence pedaling that campaign finance reform laws attempt to protect. and in allowing unlimited political spending, this court has opened the door to corruption and to special interest domination of politics.

>> brown: corruption, explain that. how would this make things more corrupt? >> sure. let's take an example from a case last year which justice kennedy tully wrote the majority opinion on. in that case, there was a corporation that was-- knew it was going to lose a lawsuit in the state supreme court, and so they spent $3 million of their money basically to take out a state supreme court justice who was up for election and to replace him way candidate that they knew was sympathetic to their own interest. now, when the case involving this corporation came before the court, of course, that candidate who had been installed by that corporation's $3 million ad blitz, voted in favor of that corporation. we're talking about-- we're talking about elected officials who owe their political survival to corporations rather than to the electorate sphwhrown mr. simpson, how do you react to that specific example.

>> that case involved a judicial election and the issue was whether a judge had to be recused. judges are different from representatives. judges are supposed to be impartial. representatives are supposed to represent, which is to say they're supposed to be partial. that's the whole idea of representative democracy. >> brown: let me reverse the question to you to the one i asked miss yoon. give me a positive example, from your perspective, that could result from today's decision. >> i'll give you an example i just heard about over the weekend. over the weekend i heard in massachusetts there was a wine store, a corporation that sells wine. they sent out letters and e-mails to everybody on their e-mail list saying, "vote against martha coakley. she supported restrictions on direct shipping of wine and sided with the big wholesalers." under misyoon's view that wine store is not allowed to speak to their customers and say vote against martha coakley. we have to side with the big interest what amounts to the

ability really to change the law. corporations don't speak with one voice any more than individuals do. >> brown: if a similar case were to come up tomorrow, assuming that the court's decision have an impact gipping tomorrow, that case, that could have been-- that would not have been illegal. >> exactly. that's exactly right. >> brown: go ahead. >> it would never have been illegal for the wine store to send out that e-mail to anyone. we're talking about specifically funded broadcast advertisement that are paid for with shareholder funds. we're not talking about a corporate political action committee speaking. we're not talking about lobbying. we're not talking about direct public outreach. we're not talking about any of the multitude of ways in which a corporation makes its voice known today. justice kennedy's opinion seemed to be premised on the idea that corporations today are somehow silenced from expressing their viewpoints in politics. and i think for anyone who has followed the health care debate, the financial regulation debate, the climate change debate,

justice kennedy's opinion of how politics works has no rep to any kind of reality. >> brown: mr. simpson? >> that's wrong. today's decision goes to any independent corporate speech. telling a corporation as miss yoon says, that it has to spend money only that it raises from other people who give it but it's not allowed to spend its own treasury funds is like telling an individual you're allowed to speak as long as you don't spend from your own bank account, but you can warned up and downtown street and try to raise money from your neighbors -- >> brown: a political action committee. >> that's exactly right. and the court saw through that and recognized the tremendous burdens on everyone's speech that regulating the amount of money that one can raise on speech entails. >> brown: miss yoon, the president also said today that he wants to work with congress for a forceful response to today's decision. what's he talking about? >> as you mentioned, today's opinion is a landmark response--

is a landmark decision. in the last couple of elections, we saw the power of the grass-roots as we've never seen it before in elections. we saw people clicking on web sites, giving small donation expps, you know, having their candidate win the nomination of both parties and having their candidates duel it out for the white house. what this threatens to do is drown out the grass-roots-- >> lehrer: let me stop you. i didn't phrase my question right. what is it the president and congress can do about the decision? >> what they can do is establish a public option for campaign financing. what this public option would would do would be a robust public financing system that would allow elected officials to get out of the arms race of fund-raising that this decision puts them in. it allows them to take themselves off the auction block. >> lehrer: and that you think could go through the legal gambit and be approved by the supreme court?

>> yes. there's no constitutional problem that has been suggested with public financing. public financing is, as far as i can tell, safe from the vision of the first amendment advanced by this court. >> brown: how do yocourt. >> lehrer: how do you see that as a possible response the president and his colleagues might give? >> public financing is a solution in search of a problem. today's decision enforces the first amendment and applies it to everybody equally. saying that that's a problem basically says that the first amendment is a problem that now needs to be solved, and the proposed solution is if candidates have trouble speaking out and competing in the marketplace of ideas with corporations, let's force the taxpayers to fund candidate campaigns. i don't think people want that. and it's certainly not a good solution to the problem that campaign finance laws themselves impose on candidates. >> lehrer: okay, mr. simpson, miss yoon, thank you both very much. >> thank you.

>> thank you. >> woodruff: and still to come on the "newshour": president obama calls for new restrictions on banks and aid efforts intensify in haiti. >> lehrer: but first, the other news of the day. here's hari sreenivasan in our newsroom. >> sreenivasan: democrats' remaining hopes for quick action on health care took a big step back today. health correspondent betty ann bowser reports. >> reporter: speaker of the house nancy pelosi made it clear this morning house democrats will not adopt the health care reform bill that passed the senate. >> in its present form without any change, i don't think it's possible to pass the senate bill in the house. >> reporter: among other things, the house bill included a public option, and the senate bill did not. pelosi today outlined elements from the two bills that she thought might pass the house in a scaled-down bill. >> the need for us to address health insurance reforms, to end discrimination based on pre-

existing conditions, to stop recisions that when people are sick-- even though they have health insurance, their policy has a recision-- to say that if you pay your premiums and do so on time, if you get sick, your insurance will not be cancelled. the list goes on and on. >> reporter: overall, pelosi said, house democrats are not in a big rush. that change was forced by tuesday's special election in massachusetts, when senate democrats lost their 60-vote majority to defeat filibusters. the republican winner in massachusetts-- scott brown-- made the rounds on capitol hill today. he met with senate minority leader mitch mcconnell, massachusetts democrats john kerry and paul kirk, and republican senator john mccain. brown won in part on a promise to stop health care reform in its present form.

he was asked today about working with democrats. >> am i open? i'm open to looking at every single bill on its merits and making a decision based on that and my first is going to look at is whether it's good for my state and then obviously if it's good for the country. >> reporter: but republican leaders-- invigorated by brown's election-- said democrats' health reform efforts are dead. house minority leader john boehner said congress should start over. >> listen, our goal is to stop this monstrosity. and we're working with our members so that we don't find ourselves in a position where they're able to pick off a few of our members and to get this bill passed. >> reporter: a white house spokesman said today president obama now agrees on the need to let the dust settle before trying to craft a health care bill that can pass, possibly with republican support. >> sreenivasan: secretary of

state hillary clinton took on internet censorship today. in a washington speech, she singled out china and several other countries. she said they have put up barriers to portions of the web, and censored words, names and phrases in search results. >> countries that censor news and information must recognize that from an economic standpoint, there is no distinction between censoring political speech and commercial speech. if businesses in your nations are denied access to either type of information, it will inevitably impact on growth. >> sreenivasan: clinton urged chinese officials to investigate recent cyber attacks on google's e-mail accounts. the chinese government insisted it's treating the issue as a business dispute with google and not a political matter that affects ties with the u.s. in pakistan, military officials announced they will hold off launching new offensives against militants for up to a year. they said they need to consolidate the gains made since last spring. the announcement came during a

visit by u.s. defense secretary robert gates. he met with prime minister yusuf gilani, among others, and he called the anti-terror operations a success so far. residents of southern california endured heavy rains and high winds for a fourth straight day. more than 1,200 homes in the foothills and canyons along the san gabriel mountains were under orders to evacuate, but not everyone did. local officials said so far, flooding is limited, and no major mudslides have been reported. but the risk remained high. in some coastal communities-- like this one in pacifica-- buildings teetered on the edge, as 20-foot waves smashed ashore. conan o'brien and n.b.c. television have agreed to part ways paving the way for jay leno's return to "the tonight show." the network announced a $45 million severance deal today. $33 million of that goes to o'brien, and the rest to his staff. his last show will air tomorrow night, but he is free to return to television in september. leno takes back "the tonight show" reins starting march

first. 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. but for now, back to judy. >> woodruff: now, president obama takes on the banks and rolls out new plans to cut them down to size. the president opened with another verbal assault on the nation's mega-banks, accusing them of taking reckless risks in pursuit of quick profits. >> we have to enact common-sense reforms that will protect american taxpayers and the american economy from future crises as well. for, while the financial system is far stronger today than it was one year ago, it's still operating under the same rules that led to its near-collapse. >> woodruff: in effect, mr. obama said, the banks want to rake in profits when their gambles pay off, but they want taxpayers to bail them out when things go south. now, he said, it's time for congress to adopt two additional major reforms.

first, to reduce risk, he called for a ban on commercial banks owning, investing in, or sponsoring hedge funds and private equity funds. he'd also bar financial institutions from investing money for their own benefit-- restoring curbs similar to those first enacted in the great depression. second, the president said he wants to limit the size of any single firm in the financial sector. he said americans should never again be "held hostage" by firms deemed too big to fail. just a week ago, the president proposed a fee on large banks to cover shortfalls in the federal rescue fund. today, he acknowledged getting action on his reform list won't be easy. >> what we've seen so far, in recent weeks, is an army of industry lobbyists from wall street descending on capitol hill to try and block basic and common-sense rules of the road that would protect our economy

and the american people. so if these folks want a fight, it's a fight i'm ready to have. >> woodruff: wall street reacted with a sell-off in financial stocks. and that pulled the broader market sharply lower. the dow jones industrial average fell 213 points to close below 10,390. the nasdaq index was down more than 25 points, closing at 2,265. to help us understand the administration's plan and the thinking behind it, i am joined by treasury secretary timothy geithner. thanks very much for being with us. >> thank you, judy. >> woodruff: so if i'm a big bank, what does this mean for me? what changes do i need to make? >> the president proposed two simple principles today. woan is banks who have access to the safety net have the privilege of borrowing from the government in times of stress should not take advantage of that privilege to subsidize risky activity that could threaten the stability of the system.

the second is we want to make sure that we don't have a system in the future where banks get to the point where they are so large, that they threaten the stability of the system. those are two simple principles. they're part of this very important effort we're engaged in to try to encourage the congress to pass a set of financial reforms that will provide better protection for siewrndle create a more stable, safer financial system. >> woodruff: so how different would the banking sector look if everything you want is enacted? >> we want to have a more stable system that does a better job of protecting consumers and meeting the needs of companies that need to raise capital, families need to borrow to finance their kids' education. that's our basic objective in this. to do, that we need to make sure the banks aren't taking the kind of risk that will threaten the stability of the system requiring a whole range of important reforms and constraints. we made a lot of progress in the house. but we're at a critical moment in the senate and we wanted to make sure at this critical moment as we try to move this

forward, we had the best set of ideas in place that offer the best prospect of a strong set of reforms. >> woodruff: so in essence are you saying big banks need to be broken up? >> no, this does not proposed that. what this does is make sure we limit risk taking that could affect the stability of the system in the future. >> woodruff: i ask because there was the cfo of goldman sachs who said this is not practical for us to separate, for example, private equity from the other work we do. we hear other bankers say we're going to have to lay people off. it's going to hurt our business. >> you're going to hear a lot of concerns from bankers about this and we're involved in a very important cause which is try to work with congress to put in place reforms that will prevent this from happening again, and that's going to require a lot of changes. but our principal objective is to make the system safer and more stable so that the economy, the average american family, is not vulnerable again to this. and, again, that's going to require changes in behavior. the president said today-- and

you've heard him say it-- even though we're two years, three years into this deep financial crise, our financial system today is still operating under the same rules that helped create this crisis, and we need to move congress to change that system. >> woodruff: let me ask you about one particular aspect, and that is banks that would separate some of their investment operations. does it mean, for example, that a j.p. morgan, without naming a bank, that in essence would have to spin off its investment operations? >> banks will have some choices about how they comply with this. it will result in some changes and we're going to work very carefully with the congress and regulators to make sure we do this in a sensible way. the basic principle banks that have the privilege of taking advantage of the safety net should not use that to subsidize risky activity. i think it's a simple principle. i think people can understand that. and we're going to do it in a careful, well-designed way. >> woodruff: and when would you like to see this take effect?

>> we'd like congress to enact reforms as quickly as possible, and we're very close now, i think. and when those reforms are put in place and legislated, we will work carefully with the regulators to put out the detailed, guidance to make we're we got the balance right. >> woodruff: this would be legislated as you just referred to. i heard a lot of comment today about how much uncertainty there is, that this leaves the banking sector in limbo. they don't know what they're going to look like in a few years. >> the banking sector is in substantially stronger shape today than it was really any time over the last two and a half years or so, much stronger shape today. as you know, we have a deep obligation responsibility to the american people to make sure we are changing the types of practices and constraints that helped produce this crise. it is going to require changes going forward and you should view these as part of a very strong, broad package of reforms that, again, are designed to make sure consumers are protected and the american economy is never again left

vulnerable to this kind of crisis. >> woodruff: a couple of questions about the timing, mr. secretary. former federal reserve board chairman, paul volcker, who heads up the economic recovery board for the president, he's publicly advocated this for the last year. he's been very open about it. he told reporters last summer the president had said no to this. what changed the president's mind? >> i just want you to know i'm very close to paul volcker, have enormous respect for him, and the president and i have been talking to him about this for a long period of time. and you saw in the house bill that passed the house, and even in the draft senate bill, a provision that was very responsive to paul volcker's ideas, and this provision would give the fed the authority to impose these types of restrictions, exactly these types of restrictions. we thought it was time to provide a little more clarity about what this would mean because we're at the critical moment where we need to make the last puck to get reforms through the senate. >> woodruff: why not do it earlier? >> again, we've been working on this for some time, and-- but he thought now was the time to

bring some clarity to it. >> woodruff: and i also ask, because as you well know, there are voices out there today saying this is largely politically driven, that coming on the heels of the massachusetts senate outcome, republican won, you have polls showing americans increasingly unhappy about administration policies, a sense the administration has been too soft on with the, that that's really what's behind this. >> that's not what's behind this. i've read that, i heard that, but the president asked us to work on this going back several weeks. we provide these recommendations to him two weeks ago. and, again, the timing is driven by the fact that we're at this moment in this very important cause we're fighting, which is to get financial reform through this next stage of the process in the senate. >> woodruff: one final question you hear from republicans, if you're going after the banks this way, why not also go after fannie mae and freddie mac, the government enterprise? >> oh, we are going to have to bring very substantial reforms to fannie and freddie,

absolutely, and we are completely committed to that and we are committed to propose a detailed set of forms beginning this year. i don't think we're going to be able to legislate that-- that process can start until next year. it's a complicated thing to get right. we are completely supportive and agree completely with the need to make sure we take a cold, hard look at what the future of those institutions should be in our country. >> woodruff: treasury secretariry tim, thank you very much. >> nice to see you. >> woodruff: for another view we turn to scat garrett from new jersey, a leading republican on the house financial services committee. he's helped draft membership of his party's alternative recommendations for reform. thank you for being with us. tell us, overall, your take on the president's proposals today. >> i wanted to say that was a fascinating interview. i appreciated some of the questions that you posited and the lack of answers on the other side of it. and one other comment-- i was thinking, your lead-in to the

story talked about the fact that the stock market tanked today. you know, when the former fed chairman was in, alan greenspan was in, there was a saying back in those days called the greenspan put. any time the fed chairman said something, the market saw that as good news and took off. we have just the opposite with this administration. any time this administration comes out and says something about what they plan to do in the future, the market tanks. and it tanks not only for wall street but for the rest of america as well. i think that's very telling as to whether wherethis administration is going to bring us with wall street and well. >> woodruff: what do you think the tanking of the market represents? who do you think is talking? >> i think it's responding to what the administration is propose. the secretary said he wants stability, and youd i and youd p with a great question, saying the market looks for stability in the marketplace, and will

this do this? and he missed the answer-- or he didn't give an answer. the market would want stability if they know what the game plan is, they know what the rules are today, and they can live with them and go forward. well, we saw the administration come out early on in this year, the spring or summer of this year, with their white paper saying this is what we want to do. i was at the white house, when they rolled it out. i got a copy of it, read through it. that was the entire game plan. we've been working on this from june, july, august, september, october, november, december, all these months, and now just when you have a political action in massachusetts, they come out with a clarification with brand-new things. how does that bring about the stability that the marketplace is looking for. >> woodruff: we did hear his response to those questions about the timing of it. let me just ask you-- >> there really wasn't an answer. he said we've been working on this-- you raised the right question about paul volcker, why didn't they present this idea back in june. >> woodruff: without rehashing

the whole interview, he talked about the impetus of the senate legislation. let me ask you about one half of this, and that is ensuring that no bank owns, invests in or has any sponsorship of a hedge fund or private equity fund. what about that part of the proposal? >> that would, obviously, put the reins on the current fed chairman, and this administration with what they use in order to try to get us out of the situation that we're in right now, right. had their rules been put in place a year ago, they would not have been able to try to push for some of the mergers that we did see on wall street to try to bring us out of this situation. so that's one real question that we have to put back to the administration. what will they do next time? and the second major point is this-- if we want the banks to lend-- and we all do-- if we want the economy to expand-- and we all do-- do you really want to start confining the banks and their ability to make profits in order to generate more capital

to lend out to the people? and that's what these confrictions will now do. >> woodruff: and the core point, though, congress garrett there, behind this-- and we heard secretary geithner refer to it and the president, too-- and that is using the so-called safety net of government money, the banks turning around and using that money that they've had access to and making risky investments with it to their own benefit. >> well, that's a good point as well. and that's why when this administration came out with their package this past year, we said, you know, what you're really doing is continuing the bailout mentality. you're continuing with the legislation that came out of the committee and out of the house and what they support to allow for these institutions to be bailed out by who? by you and me, the taxpayer. republicans, on the other hand, had a proposal, we laid it all out for them-- they never really allowed us to move it-- that says, no, we need toned the bailout mentality-- taxpayers are calling for that overwhelmingly-- and stop allowing wall street to look to

the taxpayers to be bailed out. we went in an entirely different direction than what secretary geithner is trying to do right here. >> woodruff: let me just understand, so going forward, would you and other republicans support the idea of making sure a bank does not own-- have the ability any longer to own a private equity fund or hedge fund? >> no, we wouldn't. and we wouldn't see the need for it because we would not support the idea of that institution being totally bailed out again by the taxpayer. >> woodruff: and the other half of this is the idea of limiting consolidation, putting limits on the size that any bank would be allowed-- the large bank-- would be allowed to grow. >>un, years ago, and not too long ago, the united states had some of the-- the majority of the largest financial institutions in world. now we've gone down to the point-- you can count them on one hand. where are the rest of the large financial institutions? elsewhere in the world. if what this administration says we're going to tie the hand even

more so we're going to put a limit on them, the secretary answered your question by saying, do you want to dismantle them? he should have said yes because that's what their legislation allows the administration to do, to dismantem them when they get larger than they want them to be. we will be uncompetitive with the rest of the financial markets in the world world as we continue to be so with the policies they've enact so far-- or tried to enact. >> woodruff: do you believe any limit should be placed on these large megabanks? >> schuss the limit should be on the other side of the page. the limit should be that the taxpayer should not be the avenue for recourse when they have problems. when the banks grow to-- or when these financial institution grow to such a size that they can't sustain themselves, or what have you, they have problems, economic problems, financial problems, they should not be able to look back to you and i, the taxpayer, to be bailed out. that's where the limit should be. you put that limit on, and you will not find yourself so much in the situation that we came to today.

>> woodruff: how would that-- how would you enact that? >> well, we have-- we have legislation that we have proposed. we do have the idea of, you know, a council of regulators out there, so the council of regulators can get all the information out they need and look over the horizons, what have you. we support that general idea. we don't go as far as the administration wants to. we have the idea of saying put limitations on bailouts so the bailouts don't occur in the future, so we don't have to see aig situation or bear stearns situations or fannie mae or freddie mac which is probably going to be more money spent on those two institutions than the congress spent on the tarp program. >> woodruff: we're going to have to leave it there. representative scott garrett. we thank you very much. >> i appreciate the chance to be with you again. thank you. >> lehrer: the ravaged people of haiti struggled on today-- facing hunger and disease after last week's earthquake. more mass graves were dug and more aftershocks rocked

port-au-prince. but there was more help, with 12,000 u.s. troops now on the ground and offshore. we begin with a pair of reports from "independent television news"-- first, jonathan rugman. >> reporter: u.s. marines landed on this haitian beach, west of the capital, this morning. the americans aren't just protecting convoys, but distributing food and water in the capital and beyond. and although the haitians and the u.n. are officially in charge of this crisis, a new reality has dawned: only a full scale army can lift haiti off its knees. at the main airport today, u.s. army doctors were heading out to a hospital ship anchored offshore. all this effort is one part altruism and one part insuring that haiti doesn't become a failed state in america's own back yard. but it's the altruism you hear. so are these troops going to be delivering aid, or just protecting those who are

delivering aid? >> i think it's going to be a mix of both, but the majority of their operations will be delivering aid themselves. >> reporter: so it's a classic humanitarian aid effort where only an army can be big enough, and have the scale to do it properly? >> well, again, because this is disaster relief, we want to be able to get rapid relief to the haitian people. >> reporter: gangs armed with machetes are bypassing the bodies, scouring the ruins in search of anything they can eat or sell. and though the looting has not turned into widespread violence, that is still the fear. the number of haiti's homeless can only be guessed at, but two hundreds of thousands crammed into refugee camps, where sanitation is almost non- existent. but most haitians are still living in small pockets on their own streets. >> reporter: american doctors

have opened this field hospital in port-au-prince. and it's an oasis of relative comfort, when doctors outside are still operating without anesthetics on infected wounds. >> woodruff: more than a week after the earthquake, haitians are trying to get back to the business of living. but they're doing it amid the ruins, the desperate need and the constant presence of death. jon snow of "independent television news" has that report. >> reporter: ice in port-au- prince. the first swallow of some tiny sense of survival. and suddenly, commerce, too, on the street. adalene's first day out with bags of breadfruit. she makes a sale. she's lucky. for the rest, old produce piles hi. hyperinflation is at large. water up 300%. rice up 60%. cooking oil-- $10 a gallon last week, $20 this. where once the mini-market stood, there is nothing. 90% of such places in the city are destroyed or closed.

is anybody buying? >> no. >> come on, come on to see that. >> reporter: it is at this moment that nadia appears, to urge us into her devastated community. you need toilet, you need food, you need water. >> water. >> reporter: has nobody been here? >> nobody, nobody come, only you. >> reporter: jean rodrig joins the group, and he becomes our instant narrator. >> well, personally, we're interpreters. that's what we do for a living. we work for the u.n. i speak 5 languages. >> reporter: and are your houses destroyed? >> my house is down, that house is down. underneath of this house, we still have two dead bodies from six dead bodies we had all together. we're the ones that managed...

we buried them there. and the reason we buried them there was that the bodies got so decomposed, you know, so nasty, that there was no other way to take them anywhere else. >> yes. >> so we made a big hole. >> right. >> a wife and her husband. the husband is a u.s. citizen. the u.s. citizen died, we just buried him. >> reporter: are you going to try to stay here, or are you going to try to move somewhere? >> well, moving somewhere. the big question mark is where. because, actually, no where in port-au-prince is safe. >> yes. >> nowhere in port-au-prince is safe. like, i have a pregnant wife. my wife is nine months pregnant. you know? there she is. my wife is nine months pregnant. and she pulled herself out of the debris. when it fell, everyone was in it. my pregnant wife, my mom, that's a u.s. citizen, and my brother. now this is the top floor you're looking at, right there.

this is the top floor. now the top floor turned out to be the bottom floor. and thank god, no body died. >> how incredible. >> there were six people underneath, and all my family. >> reporter: they got out from underneath. >> my wife got out from underneath, of these debris right here you're looking at. >> reporter: there is your washing machine. >> yes, washing machine, refrigerator. everything is gone. everything. >> reporter: my god, how do you begin again? >> my wife is good, she's just kind of in daze. maybe in a couple of days. >> reporter: where will she have the baby? >> we don't know yet, sir. >> reporter: jean rodrig and some 60 neighbors now sleep out in the open, here, a solitary cooker. but all around them, the stench of death. jean rodrig's family is still looking for remnants in the house. but for them, nothing will be enough to replace the world the earthquake left behind. >> lehrer: margaret warner spoke

a short time ago to martin smith of our p.b.s partner, "frontline." he is in port-au-prince. >> warner: martin smith, the two pieces we saw from itn suggests it's a real patchwork down there now in terms of who is getting aid and who isn't. is that what you're finding? >> reporter: it is. it certainly is not coordinated. people getting it are getting it in spite of efforts to coordinate the aid. i just came from a hospital where everybody had been moved into the courtyard because of the last earthquake, the tremors that happened yesterday, afraid to stay in the billion. and everybody there complained, newborn babies had no formula. nobody had the right spliedz, and furthermore, it wasn't coordinated. i was in refugee camp where's there were complaints they had no water, they were drinking bad water and getting disintery. downtown yesterday, the looting was rampant. obviously, those people are strong enough and getting some

water or they wouldn't be able to loot as they are. so it's hard to know where the aid is. you don't see aid being distributed on the streets-- or we haven't seen it in the days we've been all around the area. >> warner: what about in the refugee camps? is there any aid distribution set up there? we saw-- we've seen footage of a tent city, i guess, out on a golf course, where the u.s. military does seem to be giving out aid. >> reporter: there are places, i'm told, and i know from talking to people in refugee camps, in these tent cities, that water trucks do come by, and i did see one water truck in a neighborhood delivering water, people lined up getting their cans filled up with water. i haven't seen food being distributed. now, i should say that you do see the markets coming back to life. and people buying, if they have money-- many people say they have money but it's in the bank. they can't get it out of the banks because the banks are either collapsed or closed.

as you say, it's a patchwork. it's hard to know how to make do. people are getting food, sharing food with neighbors. but right now, everybody that i spoke to, even people in the military and doctors complain about the lack of coordination. >> warner: one of the early obstacles to delivering the aid, we were told by u.s. officials, was just all the debris that was in the streets. it was so hard to get delivery vehicles out. has any of that been cleared away? are the streets more passable? >> reporter: the one thing you do see is garbage trucks picking up some of the lighter trash on the streets. we've seen a few of those. and you see quite a few of the big backhoes, if you will, and cranes and bulldozers picking up large amounts of rubble and clearing streets. we found most of the streets passable. sometimes a building has collapsed and blocked half of the street, causing traffic jams. but for the most part, that work is going on. >> warner: now you mentioned looting and that you observed

the looting. is there any sign of law enforcement, whether haitian or international forces, and are they doing anything to control it? >> reporter: you know, i've covered a lot of conflict zones, and i've never seen anything quite like we saw on the streets downtown yesterday. and, apparently, it's gotten worse day by day. the looting was-- it was a free-for-all. the cops, the police were there. i talked to them. they said, "look, we can't do anything about this. we can fire our rifles into the air if we want to disburse the crowd but it's temporary." i said, "does the commander give you orders of what to do?" "no." nor was there any presence of marines or soldiers or of u.n. folks there. the looting was-- it was just a wild free-for-all, with corpses still lying in the streets, people stepping over them with boxes. it's hard to imagine the horror of it, but it was something like i've never seen before. >> warner: finally, martin. what about the corpses?

what about all these dead bodies, tens of thousands of them? what is happening to them and who's doing it? >> reporter: we wanted to get a handle on this, as other journalists have, if anybody is counting how many body thrrs. we went out to the dump, north of-- outside of town, and there they've dug a lot of mass graves, and the trucks come in, you know, several an hour, dumping rubble and mixed into that rubble are bodies. we saw them dumping those bodies. we saw them picking up the rubble on the street with the bodies in it. but there's nobody at that central point that's counting those bodies, and since trucks are coming from all over port-au-prince and the surrounding area and up and down the south coast, if nobody's at that central point where the bodies are being dumped, there's nobody that can really have a handle on exactly how many people have died. >> warner: martin smith of

"frontline" thank you. you. >> reporter: thank you, margaret. >> lehrer: a correction to one of our haiti discussions earlier this week. on wednesday, former usaid administrator andrew natsios said u.n. official douglas coots had died in the earthquake. coots is actually alive and well in alabama. doug coates, the acting u.n. police commissioner in haiti was killed. >> lehrer: again, the major developments of the day: the u.s. supreme court overturned decades of limits on campaign contributions by corporations and labor unions. president obama called for new curbs on financial risk-taking by banks and a limit on bank size. wall street responded with a sell-off. the dow jones industrial average fell more than 200 points. and democratic hopes for early action on health care faded further. house speaker pelosi said it's unlikely the house will simply accept the senate bill. the "newshour" is always online.

hari sreenivasan in our newsroom previews what's there. hari? >> sreenivasan: there's more on what today's supreme court decision means for campaign finance from loyola law school we get reaction to secretary of state clinton's speech on internet freedom from rebecca mackinnon, a fellow at the open society institute. former "newshour" correspondent elizabeth farnsworth discusses her film about the quest to bring chilean dictator augusto pinochet to justice, which just won a dupont-columbia award and an interview with the cinematographer of "the white ribbon"-- winner of the golden globe award for foreign cinema. 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. >> lehrer: and i'm jim lehrer. we'll see you on-line. and again here tomorrow evening with mark shields and david brooks, among others. thank you and good night. major funding for the pbs newshour is provided by:

♪ the national science foundation. supporting education and research across all fields of science and engineering.

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. captioning sponsored by macneil/lehrer productions captioned by media access group at wgbh access.wgbh.org