captioning sponsored by macneil/lehrer productions >> lehrer: good evening. i'm jim lehrer. the argument over the right to bear arms was back at the supreme court today. >> brown: and i'm jeffrey brown. on the newshour tonight, the case involved a handgun ban in chicago. we'll talk to marcia coyle of "the national law journal". >> lehrer: then, margaret warner reports on the rising earthquake death toll and devastation along chile's coastline. >> excuse me.

this is a senator-only held meeting. no, you may not. >> brown: one senator's power to block an extension of jobless benefits. gwen ifill explains. >> lehrer: an on-the-ground update from helmand province in afghanistan on the offensive against the taliban. >> brown: neither rain nor snow nor the neighbor's dog, but can your mail carrier deliver through big budget cuts? we look at the troubled u.s. postal service. >> technology has made obsolete many aspects of the usps model that worked so well for us for so many years. >> lehrer: and paul solman talks with historian paul kennedy on the rise and fall of the u.s. and other great powers. >> if you're a proud american, you have to assume you only got to be a proud american because of bounds of economic power and technological power shifted to us in the second half of the 19th century. >> lehrer: that's all ahead on tonight's newshour. major funding for the pbs newshour is provided by:

monsanto. producing more. conserving more. improving farmers' lives. that's sustainable agriculture. more at producemoreconservemore.com. chevron this is the power of human energy.

bnsf railway. and 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 u.s. supreme court heard an important argument today over state and local gun regulations. at issue was the national application of a 2008 court decision that a gun law in washington, d.c., violated the right to bear arms. the new case involved a handgun ban in chicago. lawyers for both sides spoke outside the court after the hearing. >> if there is a firearm in the home, residents in that home are

actually six times more likely to have a death or injury from a firearm. that is a very serious public safety threat, a very serious public health threat. chicago has made that choice. different communities have made different choices, but this is the choice we have made because it's right for our city. >> the court is going to decide, hopefully, that the people in the united states enjoy all of their second amendment rights, not some diluted, some watered down, some shadow version of down, some shadow version of the right to keep and bear arms, but really their entire right to keep and bear arms. now, of course, chicago is still allowed to regulate guns in the interest of public health and safety, but when they do so, they need to make sure that they're aware that there is a fundamental constitutional right at stake. >> lehrer: we are joined now, as always, by marcia coyle of the "national law journal." she was in the courtroom for today's arguments. marcia, welcome. >> thank you, jim. >> lehrer: the facts in the chicago case are rather straightforward. are they not? >> yes, they are. this case is really a sequel to the 2008 decision in which

the court held that there is an individual right to own a gun in the home for self-defense, personal safety. that was gun regulation in the district of columbia which was a federal enclave. and the court left unanswered whether that right that it recognized applied outside of the federal government and federal enclave. the issue before the court today, even though the case comes to the court involving chicago and its suburb of parks, gun regulations, the issue before the court is really whether the second amendment should be applied to states and local governments . >> lehrer: what was the chicago argument for, for leaving the chicago ban alone? >> chicago was represented by james feldman, a very experienced supreme court advocate. he told the court that the second amendment right here is

not a fundamental right. that's what the court looks for when it wants to apply rights that are in the bill of rights to the state. it looks to the history and tradition of america to see if the right is deeply indebted fundamental. he said that states and local governments have been in charge basically of firearm regulation for 220 years. so it's not a fundamental right of the individual. >> lehrer: the other side argued what? >> the other side was represented actually by two lawyers. alan gerra who we just saw and paul clement. paul clement was arguing on behalf of the national rifle association. they told the court they did agree this was a fundamental right. that if you look to the history and tradition of america, even before the constitution, this was a right that everyone believed they had. but where the two lawyers differed is how the court should apply the right.

what part of the 14th amendment, which is what the court generally uses, should be used to make it applicable to the state. >> lehrer: rather than to ... back to your point... a fundamental right that applies to everybody in the country because it's part of the original intent of the constitution, right? >> well, what happens here, jim, and it may seem odd that the second amendment would not apply to everybody, would not apply to the states. but the framers of the constitution saw the bill of rights originally as protection against actions by the federal government. >> lehrer: by the federal government. >> exactly. it wasn't until the 14th amendment that the supreme court began incorporating the bill of rights towards the states. >> reporter: now give us a feel for how the justices reacted to these two arguments today. >> okay. first up was mr. gerra and mr. clement who want the second amendment applied to the states. they seem to have a very sympathetic audience for the most part.

the court did not really like mr. gerra's approach but did like mr. clement's approach in terms of how to apply the right. justice stevens was concerned about the scope of the right that would be applied. he asked, well, are we just going to be applying what we said in heller, an individual right to own a gun in the home for self-defense? or is it a right to parade on the streets with guns? mr. gerra and mr. clement resisted any limitation on the right. >> lehrer: it's an absolute. >> whole second amendment ought to be applied to the states. but the justices also made very clear that they felt that if the second amendment were applied, there is going to be room for regulation by the states. and that's what they told mr. feldman who represented the city of chicago. and they also said that in their 200 0 opinion in the heller case, the district of columbia case that there will be flexibility for the states and local governments to

regulate guns. >> lehrer: what does all this add up to you, listening to all of this. >> i take three things away from the arguments today. first it's highly likely that the supreme court after recognizing this individual right will apply it to the states and not confine it to the federal government. second, i think in the 2008 decision and in their comments today, many of them do agree that states and localities will have flexibility in regulating guns. and third, there's going to be years of litigation in the court over whether those regulations will pass constitutional scrutiny. >> lehrer: for instance, if they say, all right, it's okay to do some regulating. then they still have to decide in each individual case, like, say, chicago, d.c. or wherever, fits that. is that right? >> exactly. i also point out one other thing. >> lehrer: yeah. >> immediately after the argument, a press release was sent out by a conservative

advocacy group saying that gun rights are now going to be the new abortion issue in supreme court nominations. be prepared. just as we saw with justice sot meyer's hearings where gun rights did come up, this press release said that gun right advocates have more people, more money, more influence than even the abortion rights advocates have. >> lehrer: that's been up to at least recent years been kind of a quiet issue. has it not? >> in supreme court nominations in particular. but no longer. >> lehrer: when should we expect a decision in this case from the court? >> i think probably at the very end of the term because this is a very... it seems like a pretty straightforward case. but when i came out of the arguments i thought it was like advanced constitution constitutional law. there are aate low of different threads. it will take them a while. >> lehrer: this summer sometime? >> probably by the end of june. >> lehrer: marcia, as always, thanks. >> my pleasure, jim.

>> brown: now, the other news of the day. here's hari sreenivasan in our newsroom. >> sreenivasan: president obama signaled today he's exploring republican ideas on health care reform. he did so in a letter to congressional leaders. the proposals include using undercover investigators to expose fraud and waste in medicare and medicaid; increasing medical malpractice reform programs; stepping up medicaid reimbursements to doctors; and expanding the use of health savings accounts. the president rejected demands to start over on health care reform. instead, he will lay out his plans for how to move ahead in a speech tomorrow. all new vehicles sold in the u.s. may have to come with brakes that override the gas pedal. transportation secretary ray lahood said today his department may recommend that step. it is the latest fallout from unexplained accelerations in toyotas. lahood also told a senate hearing that toyota has to change its way of doing business.

>> i believe the toyota business model is broken. i told mr. toyoda that. when they have good expert people, professional people in north america making recommendations and then they don't listen to them, their business model is broken. i think mr. toyoda got that message. >> sreenivasan: 52 deaths are now linked to sudden acceleration in toyotas. the company has recalled about six million vehicles in the u.s. since last september. but today, a "new york times" analysis showed cars that were not recalled-- toyota camrys built before 2007-- have a comparable number of speed control issues. for the record, toyota is a newshour underwriter. toyota saw its sales fall 9% last month, due mostly to the recalls. in contrast, general motors, ford and chrysler reported increases, despite snowstorms that hurt business in the northeast and midwest. ford outsold g.m. for the first time in a decade, with sales up 43%.

sales at general motors rose by more than 11%, and chrysler edged up slightly, by half a percent. g.m. announced a recall of its own today. the action involves power steering problems in 1.3 million chevrolet and pontiac compact cars in north america. g.m. said the cars never lose steering, but the national highway traffic safety administration has received more than 1,100 complaints about a loss of power steering, including more than a dozen crashes. in the u.s., the recall covers chevrolet cobalts built between 2005 and 2010 and the pontiac g-5 from 2007 to 2010. it was a quiet day on wall street. the dow jones industrial average gained two points to close under 10,406. the nasdaq rose seven points to close above 2,280. mudslides in eastern uganda killed at least 70 people today. at least 250 others were

missing. heavy rain triggered the muddy surge in a region 170 miles east of the capital, kampala. houses, stores and at least one school were buried. the government called out the army to aid in rescue efforts. 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 jeff. >> brown: and still to come on the newshour: one senator stands alone; the fight against the taliban in southern afghanistan: cutbacks for the u.s. postal service; and a historian on money, power and world events. >> lehrer: but first, an update on the earthquake in chile where the death toll rose to nearly 800 today. margaret warner has our story. >> warner: in the seaside town of chalco this morning, a new aftershock gave a small hint of what saturday's huge quake looked like on land and sea. the waters of the pacific did not break the beaches today, but vast expanses of the chilean

coast lie in near-total ruin, hammered not only by the violent shaking, but by the massive tsunami waves that followed. walls of water at least 18 feet high rolled 200 yards inland and inundated whole villages and small towns. the surge tossed boats from the shore, washed away homes, and left untold numbers of dead. in dichato, north of the epicenter, villagers today tried to salvage what they could. many died along this devastated stretch of coastline, and many remain missing. victoria hernandez is looking for her parents. >> ( translated ): i found my mom's shoes and i want to give them back to her if i find her. >> warner: associated press reporter mike warren saw the devastation in dichato. he spoke to us from concepcion, chile. >> reporter: what happened was the bay emptied of water. it's a very large bay, and the water just went out to sea. and some young teenagers drinking on the beach were the

first to see this and found the warning. they ran through the town of dichapo saying, you know, "run out of your houses. go for higher ground." and some made it, but many didn't. and those houses, all the sea- level houses in the town of dichapo are just destroyed, matchsticks, piles of rubble. there's very little left of them >> warner: fishermen and harbor masters told people to leave; they knew from experience what was coming. but chile's defense minister has said the navy made an error by failing to warn people of a possible tsunami. in hard-hit constitucion, people today were camping by the shore. >> ( translated ): there are many elderly who are suffering, a lot of people. we are desperate for ourselves and for the whole village of constitucion. >> warner: and that desperation will only increase as supplies dwindle. >> ( translated ): we don't have milk or nappies for the children, water. what we need is water and also

food; that's what we need the most, food and water, because we are running out of it. >> warner: elsewhere, chilean military and police sought to tamp down the looting and violence, especially in concepcion. chile's second-largest city was under curfew again last night. mike warren of the a.p. says some in concepcion are not relying on authorities for security. >> reporter: you've got neighborhoods organizing themselves with whatever weapons they can have... they can find-- sticks, wires, poles. and they are standing vigil at the end of their blocks around fires at night. there aren't enough soldiers to go around. >> warner: rescue operations continued there, focused on collapsed apartment buildings. an official said some of the missing have been found. >> ( translated ): we were expecting another 30 or 40 people missing, and thanks to the support and the help of the media, all those who lived in

the building came here, checked in with the authorities and the firefighters, and so now we only have seven people missing. >> warner: for many survivors, the main task for now is simply getting through the day. many are sleeping outdoors, whether newly homeless or just fearful of aftershocks, and many are in a daze. >> ( translated ): i never thought that what we saw on the news in haiti just a few weeks ago would happen to us here in chile. >> warner: as in haiti, getting aid to those in need is a priority, and made harder by the destruction of roads and bridges. there's also been criticism that the government underestimated the damage at first, and hasn't moved quickly enough. >> ( translated ): today, we must have all the emergency mechanisms in place-- the field hospitals, the distribution of essential products, the distribution of food by our emergency agencies. we must receive new loads of food, water, blankets, clothes and other things, and send them through an aerial shuttle service. and we will also send two frigates and a barge. >> warner: some help is on the way.

a short time later, bachelet greeted secretary of state hillary clinton, who brought satellite phones. >> i had 25 on my plane loaded on, and i'm going to give this one to you, madame president. >> warner: those phones are just a small part of what clinton promised will be a significant u.s. commitment to chile. bachelet leaves office in ten days. she will be succeeded by sebastian pinera. >> ( translated ): one of the possibilities i discussed with the secretary of state, and i will also discuss with president-elect pinera, is to have loans or funds with good conditions for the reconstruction process. >> warner: the meetings were held in the capital, santiago, which was spared the widespread destruction that hit other parts of chile. early estimates put the quake's financial cost at $30 billion. the final human toll-- as yet, unknown.

>> brown: next, the senator from kentucky plays hardball with his colleagues. gwen ifill reports. >> ifill: over 48 stalemated hours in washington, 400,000 unemployed americans saw their jobless benefits run out; doctors caring for medicare patients saw their federal reimbursement drop by 21%; 2,000 federal employees were forced into unpaid furloughs; and work was halted on 41 highway construction projects across the country-- all the result of one senator's determination to block passage of a short-term funding bill that he says would run up the nation's debt. >> i object! >> ifill: republican jim bunning of kentucky said he wants the $10 billion cost of the bill to be paid for by cutting other programs. >> we want a country that don't owe everybody in the world for our existence.

the question i've been asked mostly is, "why now?" well, why not now? >> ifill: bunning, a former hall-of-fame pitcher who is retiring from the senate this year, has earned a colorful reputation during 11 years in the senate. >> excuse me, this is a senator- only elevator. >> ifill: but his latest effort has rankled democrats as well as republicans. >> today, we have a clear-cut example to show the american people just what's wrong with washington, d.c. that is because, today, one single republican senator is standing in the way of the unemployment benefits of 400,000 americans. >> madame president, i hope that we can act together for the american people and, again, i want to emphasize that this issue is so important to

senators on both sides of the aisle. >> ifill: today's debate turned personal, as bunning squared off against his fellow republicans and against the democratic leadership. senate majority harry reid insisted bunning was punishing the jobless. >> he's lecturing the country on deficits. he wasn't too worried about that during the eight years of the bush administration when we had two wars unpaid for. >> ifill: bunning insisted the cost of passing the bill is too high. >> i have the same right as any other senator here on the floor. and it's not a filibuster when you object, and that ought to be brought out clearly. a filibuster is when you stand on the floor and talk and talk and talk. i've not done that. >> ifill: negotiations to break the deadlock continued this afternoon behind closed doors. for more on the senate standoff, we're joined by james carroll, who reports on washington for "the louisville courier- journal."

mr. carroll james, tell me, tell me when is it that a jobless extension bill is not a slam dunk? >> well, i think most people thought last, what, thursday it was a slam dunk. that's why they brought it up under a procedure called unanimous consent just as it implies basically non-controversial measures go on the calendar. everybody agrees to it. on we go. at the time this was brought up last thursday it was on a unanimous consent calendar. it came up. bunning objected. boom, all of a sudden everything stopped. everybody did think it was a slam dunk except for jim bunning. now everybody is talking and it's the only business in town right now. >> ifill: do his numbers add up when he says that, in fact, the government should pay for the things it wants to finance? >> well, this is the ongoing debate in washington, of course. you know, you're looking at one of the things they talk about a lot is this new law

that obama just signed last month called the... it's the short version of it is pay as you go law. and the idea is that for any spending the federal government does it's supposed to offset it either with spending cuts somewhere else or tax increases, perish the thought. but the big problem, of course, with the law as many critics have pointed out is that there are so many loopholes in it. for instance some of the major entitlement programs with exempt. medicare, social security. a lot of the direct spending in the annual appropriations bills are also exempt. by the way, so are emergency spending bills like this unemployment benefits bill. >> ifill: remind viewers, how is it that one senator can stop all of this, can bring the senate to a halt? >> well, it's the senate rules. you know, the rules in the senate are different from the rules in the house. i think some senators who are big fans of the institution and i guess most are or they become fans, you know, they quote the founders as talking about the senate as the saucer

that cools the tea. you know, when you pour the tea into the saucer if it's too hot. other people see it as just a place where some other senators joke it's where legislation goes to die. so, you know, and the problem, of course, is it feeds into this perception of washington as a place where nothing gets done. >> ifill: why don't democrats just go ahead and force a vote? that's all it really takes to break a filibuster. if they think that two-thirds of the senate support this idea of extending jobless benefits and all of these really good things why not just vote on it? >> i would venture it's even more than two thirds. they could do that. to break bunning's objection you basically have to go through some of the same procedural maneuvers you would have to go through to break a filibuster which could take from if we started right now it could take into next week. they were hoping for a way that perhaps they could break it some other way. by basically coming up with some kind of a deal where bunning could have a vote, one single vote on an amendment that would probably fail. and then go ahead to the main piece of lj lags, pass it and

we'd be done with it and on to other things. right now there's no deal. >> ifill: tell us about jim bunning. you've covered him for a while. he seems to be i think irras i believe is the kindest word even his colleagues would use. >> he's his own man. i think you definitely say. i think if you google words like cantankerous and ornery, you get thousands of hits. he's always been this way. people wonder, you know, what's up with jim bunning. he's always been this way. i think you have to overlay this situation a little bit with the political situation he finds himself in. he is not running for re-election this year. he has a bone to pick with the leader of the senate republicans, his fellow kentuckian, mitch mcconnell. he believes that mitch mcconnell basically closed off all the avenues to him for running for re-election and forced him out of the race because bunning thought that the seat couldn't be held by bunning. bunning has already had two pretty tough races. that's sort of the underlying conflict sort of behind the scenes.

it's very interesting today when a lot of this debate came up in the senate and everybody is talking about bunning's objection and both sides are talking about that. mcconnell got up at one point during the morning session and gave a speech on health care. not even acknowledging that any of this was going on around him. just feet away. >> ifill: does mean that jim bunning is basically standing aalone on this idea on stopping this bill. >> if not alone pretty close to alone. jim demint came on, another republican came on this afternoon and praised him for his courageous stand. but the fact of the matter is when you're dealing with unemployment benefits there's a lot of anxiety out there. the phones are ringing off the hook. i can tell you from experience i've been in washington a long time. my phone at the louisville journal washington bureau has been ringing off the hook. people are calling me because they can't reach other people and they see my stories on the web. this is an issue that is cutting through both parties. it's very intense. i think the republicans as well as the democrats want to

see this over as fast as possible and resolved. >> ifill: are the democrats, however, treating this as maybe-- i don't know-- a gift? >> well it's been an unexpected issue served to them on a platter at kind of came out of nowhere really. they have made a lot of it. as you might expect. they see this as they've sort of painted the entire g.o.p. with a broad brush her they see bunning as sort of the symbol of republican obstructionism in congress. of course, they're running with that ball. they also realize they're getting a lot of phone calls too. this has got to get resolved pretty quickly. >> ifill: speaking of resolution, briefly is there one in the works? we hear about closed door meetings all day? >> well that's sort of the currency in d.c., isn't it? as you know. there are a lot of closed-door meetings. one of the scenarios they've heard, i've heard a couple of conflicting ones. bunning will be given an opportunity to have a vote on his proposal to pay for this program with money out of the stimulus package. then he'll probably lose.

they would go to the other piece of legislation, pass it. they could move on. there's other scenarios where bunning might be forced to talk all night and it could be a real nightmare. we won't go there until we hear more i guess. >> ifill: it will be a nightmare for you since you're the one covering it. thanks a lot for helping us out. >> my pleasure. >> lehrer: now, the ongoing nato offensive in southern afghanistan. u.s., british and afghan forces ended major combat operations in and around marjah last week. but they still face an entrenched taliban threat. alex thomson of independent television news has been embedded with british troops at a base in helmand province. here's the first of two reports. >> reporter: this was the only safe way to get around says the british commander. now ground movement here is

possible, albeit in heavily armored convoys. passing gangs of local people paid by nato to keep the road ditches clear. >> it gives them a job. it gives them work. they won't get bored and find other things to do. >> reporter: not being stupid, the taliban are not shooting. they faded away from this area, perhaps to bide their time leaving nato with the real challenge of operation. what now? how to hold this ground. not this week or next month but next year, five years from now. >> the commander made one point this evening of particular note. >> reporter: shortcut base. the greineder's guards' evening conference where local bases essentially radio in with the day's news. but from the briefings to life on the road it's all about one

simple thing. nato has somehow to convince local people that supporting the new afghan government anthem is better than supporting the taliban. and that will not be easy. rule number one. do not run over the locals' life stock with armored vehicles. rule 2:watch all the time for i.e.d.'s. so parked on the roadway here, if you go down along the road roughly 100 yards down the road there perhaps you can see a dark mark on the road. scorch marks. that's where they blew up the i.e.d.a short time ago. the rest of the patrol parked behind it. >> main road to the west. people need to go to work. police need to get to work. it's very disruptive. >> reporter: disruption crucial to the remaining

taliban elements trying to fight their war on their terms in their way. tonight a armored vehicle dragged back to base. yesterday a warrior armored vehicle was hit by an i.e.d. in both cases nobody was seriously injured. but two hits on two vehicles in two days. the taliban are still fighting their war here. >> lehrer: and a second report-- this one about establishing governance in helmand province. again to alex thomson. >> reporter: we meet ali hbibulah. but this is no social call. for the district governor has information concerning insurgents who might want a deal to lay down their arms. >> a number would like to get in touch with the enemies. >> reporter: the british tactic? don't get involved. this man consorted, not a bunch of englishmen.

men like him are vital to nato. men like this. perhaps its last chance to get out of the country. officials actually trusted by the people in the bazaars not to line their own pockets or worse. walk out of the camp here which you can safely do if you take a foot patrol of british and afghan solders. you can see nato's last hope. new offices are being built. across the street , hard at work. government in an area which has had no government for years. the good news, locals have enough faith to line up here and get their papers sorted out. the bad news, emerging government here will count for nothing if the americans leave too soon. these afghans believe they will and their own forces cannot possibly cope. they elected one man to speak for all.

>> if it leaves afghanistan, can afghan police, can the afghan army keep control against taliban? >> not very well. >> reporter: the deep fear here is that the puny afghan forces will be left without nato with both iran on one side and pakistan on the other interfering as ever. >> pakistan ? >> iran wants (inaudible) . you bring taliban end and government together? >> we should talk with the taliban. >> taliban does not want to fight with nato. >> reporter: so the police bosses in helmand like this commander and this colonel have some job to do. banditry, the biggest opium

industry on the planet and an insurgency backed by iran to the west, pakistan to the east. who would be a cop in helmand? no wonder the british have brought in am-cop, teams of super cops from kabul with a bit more real train to go get things going. >> originally we had bad policemen and therefore we needed this group to come in force, come over. the local population hated them. in some areas they still do. but with this group they came down. they completely got the population on the side and won it over. >> reporter: in the u.k., the police top brass might worry about the i.t.-system in a new building. here at a new police post they're worried the taliban will murder them by night. >> this is why we have these vehicles here. they have the night sights so they can be put on the road if there's a threat. they can be put on the road to protect. in the century position theirs

will be night binoculars. we'll be able to see. >> reporter: up the road and there's still time for lunch at the local pub with the commander. there is much to discuss. for afghans their army and their police, the sheer ambition of nato's exit strategy is colossal and not yet in sight by any means. >> brown: now, the post office delivers some bad news that could soon affect how all of us send and receive mail. >> brown: the u.s. postal service has faced mounting problems for years, squeezed by the rise of e-mail and online bill-paying; competition from private delivery companies like fedex and u.p.s.; and, more recently, hit hard in the recession. in a washington speech today, postmaster general john potter acknowledged the agency's attempts to keep pace have

fallen well short. >> technology has made obsolete many aspects of our business model that worked so well for so many years. in recent years, great advancements in communications technology and the internet changed the landscape at a rate unimaginable a decade ago. >> brown: the numbers help tell the story-- last year, the postal service handled 177 billion items, down sharply from 213 billion in 2006, an all-time high. and it's projected the number will continue falling to 150 billion by 2020. overall, potter said today, if it takes no action, the postal service faces a shortfall in revenue of $238 billion over the next ten years. to help address that, he proposed a number of steps, including an end to saturday deliver and raising postal rates yet again next year. at the same time, he said there's a risk of cutting too

much. >> we are rapidly reaching the point of diminishing returns. there's only so much you can cut before you seriously begin to impact services. >> brown: a possible new convenience for consumers-- more postal facilities might open in supermarkets and other local stores. in the end, congress will have to sign on before any such plan goes forward. more now on the plight of the post office from: ed o'keefe, who has been covering the story for "the washington post"; and frank wolak, professor of economics at stanford university. he has spent 20 years researching the postal service industry. ed o'keefe, fill in the dire picture of it for us. who is not using the post office anymore? >> well, mostly casual customers, younger folks who are relying on email and instant messaging instead of sending greeting cards to grandma for her birthday and other companies who are cutting back and using u.p.s. and fed-ex or e-commercial instead of sending out bills

in the mail or catalogues and other products and services. >> brown: frank, when the post master general talks as though he's looking at a whole new business model, what are the principal challenges that you see? >> well, the biggest challenges are the issue of the what's called the universal service obligation. that is a minimal level of service that the postal service is required to provide to all customers. the other is the fact of the labor relations and labor practices at the postal service faces. the other is the challenge of the fact that many costs that normal businesses don't face. the postal service has to bear, for example, not being able to close uneconomic post offices because few congressman want a post office closed in their district. >> brown: staying with you, professor, these kinds of things and the technological change, there's no going back on a lot of this stuff, right? >> no. it really is i think what the post master general said is

that the postal service for the 21st century is clearly going to be a dramatically different one than the one that existed in the 20th century. it's going to be significantly smaller, just because of the fact that there are so many, as he said, alternatives that achieve exactly what the postal service used to achieve, in many cases better. than the postal service does. so there's less need for as large a postal service so it really is a case of trying to transition to a significantly smaller postal service. that is a challenge. >> brown: so, ed o'keefe, help us look a little bit at the transition. i listed just a couple of the changes in our set-up piece. what were the main things that you heard today? i think yesterday you had a chance to talk to the post master general. what are the main things they're propose something. >> two things i think he wants to see congress act on this year. the first is eliminating saturday mail delivery. he sees it as a big opportunity to save millions of dollars a year. hundreds of millions of dollars a year on what is

traditionally the slowest mailing day of the week. there's polling that suggests that a majority of americans are okay with that cut if it helps cut costs. the other one is a little more difficult to understand. basically the postal service has to pre-fund its retiree health benefits program to the tune of about $5 billion a year. no other federal agency or fortune 500 company does this, potter points out. he wants congress to allow them to stop doing that. they put it in place back in 2006 because the economic climate was much better. of course that all came crashing down amid the recession. beyond that they're going to have to think seriously about closing post offices. as your piece said they want to move in to supermarkets and pharmacies, coffee shops and office depots. they need to close down as much as 10,000 locations across the country not necessarily the tradition post office that every zip code is required to have by law but the smaller retail branches you might find in shopping plazas or in a large downtown

office building, those are the ones that would be closed and products and services would be offered in the closest grocery store or other retail outlet. >> brown: what kind of reforms would you expect to see or want to see, professor? we know in the past there's been talks about privatizing the postal service. what kinds of things do you see going forward towards this 21st century postal service you're talking about? >> well, the interesting thing is in europe is significantly further ahead in the united states in postal reform. there what you see is precisely what ed o'keefe was talking about is the amount of post offices that are open in, say, the u.k. where a lot of reform has taken place is significantly smaller. it can be quite difficult to find one. the other is that there is a lot of entry into the various businesses that the postal service does. and the postal service in these countries has essentially shrunk and really focused on the core business

of local delivery, local pick-up of mail, and really gotten much smaller in the other areas that it would traditionally be in. >> jeffrey, real quick. the post master general really wanted the postal service to be able to move into offering insurance or banking services, even cell phones at most offices across the country. this four month study the three-different consultants just concluded determined that they don't have the money right now to invest in any of those services. they wouldn't be able to incur the short-term losses just because their financial condition is so bad. the post master general really wanted to do that. he admitted he was quite disappointed that they can't offer what so many european and asian post offices do quite successfully. >> brown: if i read this right, the report suggested that the whole privatization thing is off the table because it's not really in a position to be privatized at this point. >> that's right. others would argue that the government, if they were to drop all the regulations that the postal service were to change the business model it would be much more attractive to privatization and investors

might be more interested. as it exists right now there's no way an investor would be interested. >> brown: ed, you've covered this in washington. a lot of things some of these things at least have been put forward before. congress says no. what are the prospects this time for some possible changes? >> you know, having called around today to a few different lawmakers who have been out in front of this before they're very nervous right now because they're really unsure how politically sensitive or how politically popular this kind of reform would be in an election year. yes, there's polling that suggests that closing or shutting down saturday service is popular. who is it that is really going to react to that? is it people who are going to call the offices and say you shouldn't do that? are lawmakers going to be triggered by that. senators are expected to take up a reform measure later this spring. it's unclear what that would include. the leading lawmakers say we're going to go with what potter recommends. if that means shutting down those retireee benefit payments, so be it. we don't necessarily agree with that.

if that's what he thinks needs to happen we'll do it. >> brown: ed o'keefe and frank wolak, thank you both very much. >> thank you. >> thank you. >> lehrer: and finally tonight, a paul solman conversation about a 1980s book about america's role in the world that's making a big comeback. it's part of paul's continuing coverage of "making sense of financial news". >> historian paul kennedy, famous at yale for, among other things, the course he helped found a decade ago on grand strategy. military and political. >> to sustain yourself as a great power you need three things: money, money and money. >> reporter: kennedy's fame in the world outside the ivory tower derives from a book on grand strategy: the rise and fall of the great powers. britain in 19... written in 1987, it's having a grand revival of sorts 23 years later. >> paul kennedy, welcome. >> good to be with you. >> reporter: the book got

attention in the late '80s when japan was presumed to be number one or becoming such. and has now experienced a revival because of the idea that america is the great power that has risen and is now falling. yes? >> i would agree with that, yes. there were indicators of an overstretch in defense spending and an overstretch in the budget deficits which were enough to send out a cautionary message that the u.s. might be now...t might have reached its cusp. >> what is the thesis of the book? >> over time there's a general correlation between the rise and fall of a nation-state relative to its economic and technological power and others. and its military strength and its capacity to influence world events. >> its relation to other states you mean. >> yes, so this is all about relative power over the long

term . >> why in 1988 did you think america was moving towards decline? >> when i moved from the united kingdom to yale in 1983 and i started to listen to the contemporary debates about, you know, how much defense spending do we need? are we being overtaken by japan? the original hard-book edition of rise and fall has one of those immediate evil wheels of fortune or clocks of fate. and at the top at 12 noon there is an uncle sam tentatively taking one step off towards 1:00. and coming up from 9:00 hour is oriental-looking gentleman bearing the flag of the rising sun. >> reporter: japan didn't become number one, didn't get above 9:30 on your clock and sank back down the dial so you were wrong. >> i got that wrong. what happens in the early '90s is

mysteriously, a, japan stops growing. as a matter of fact, it goes into recession. miraculously the soviet union collapses peacefully and gorbachev dissolves the soviet union and dissolves the warsaw pact. so your bugaboo of the 1980s is the soviet military threat worse than the japan he's economic threat? both of those clouds on the horizon go well over the horizon. and then we get this really interesting seven or eight years of productivity increases in the '90s which seem to be driven by more clever use of computers and electronic knowledge. >> reporter: what's happening now that is again making the notion of the fall of the united states plausible? >> a number of elements at work here. one was the war in iraq which has now moved on to afghanistan. and the very evident signs that, a, it was

straining our ground armed forces in particular and it was being budgeted off normal national budgets. military commitments which over the long term are going to be harder to pay for and harder to fulfill. the second thing was the fiscal crisis and the banks crisis and the housing crisis of the past 18 to 20 months and the response of both the late bush and then the early obama administration to try to kick start this through massive amounts of deficit spending. >> but an economic theory is if you have idle resources you borrow or print money to put those resores back to work you're better off in the long run. >> sure. the question is two-fold. can this be done in the... to the enormous, sheer enormous size of the deficit now recently projected not to be

for one or two years but to go all the way through to 2025. the second question is one which has concerned me as a military strategic historian , much more is how long did you get you get away with printing your sovereign money supply and accepting and hoping that foreigners will accept it continually into the future? >> you might have been wrong back in 1987 or you might have only been off by about 23 years is it now? >> the idea that this is all deterministic. it's all mechanismistic, these shift in the world balances and the power at the top is going to go over like the guy on the wheel of fortune. in a very long senses it's true. we all know it. there are shifts in... new forms of productivity, new forms of growth.

shifts in the global economic balances which over time affect the global diplomatic and power and military balances. i think most people would assume that because even if you're a proud american, you have to assume you only got to be a proud american because of balance of economic power and technological power shifted to us in the second half of the 19th century. that said, the trick for american policy-makers is how to find clever ways of managing relative decline so that you preserve your position as long as possible. you preserve your prosperity as long as possible. you preserve the things in the world you want as long as possible. >> reporter: it wouldn't surprise you if 23, 25 years from now, china five times the number of people as the united states was number one and we're number two a in gracefully managing that role. >> we can think that there's a

certain power which was number one 100 years ago and then gracefully backed off to a country which had five times its population. that's britain in regard to the rising united states. so there's management there. there's ways of compromising. there's ways of acknowledging. but here's one further final sort for people to think about. there are longish periods where you have three or four contenders and you go back to not a bi-polar world nor a uni- polar world but a multi- polar world. i can see in possibly 25 years' time you've got a u.s., you've got a brazil interestingly coming up fast. you've got a china. you've got an india and a possibly consolidated e.u., and you're looking at something like a vienna system, a concert of big powers. >> reporter: that's 1815.

>> that's 1815. what goes around could come around. >> reporter: that wouldn't necessarily be so bad. >> i don't think so. in fact, what it would do though is to put the emphasis on diplomacy. i hope we will be able to keep the diplomats to do it. >> reporter: paul kennedy, thank you. >> you're most welcome. thank you. >> lehrer: for the record, our paul solman has participated in paul kennedy's "grand strategy" course at yale as one of several teachers. again, the major developments of the day: the u.s. supreme court returned to the issue of gun owner rights. at issue is whether most state and local restrictions violate the u.s. constitution. the death toll in the chile earthquake rose to nearly 800. and president obama signaled he's exploring republican ideas on health care reform. the newshour is always online. hari sreenivasan, in our newsroom, previews what's there. hari. >> sreenivasan: we check in with politico for a health care update. reporter jeanne cummings looks ahead to president obama's

speech tomorrow and the next steps for reform legislation. you can ask paul solman questions about the financial crisis and the state of the economy on his "making sense" page. and "art beat" gets all shook up at an exhibit paying homage to elvis presley at the national portrait gallery. all that and more is on our web site, newshour.pbs.org. jeff. >> brown: and that's the newshour for tonight. i'm jeffrey brown. >> lehrer: and i'm jim lehrer. we'll see you online, and again here tomorrow evening. thank you and good night. major funding for the pbs newshour has been provided by: >> what the world needs now is energy. the energy to get the economy humming again. the energy to tackle challenges like climate change. what if that energy came from an energy company? everyday, chevron invests in people, in ideas-- seeking, teaching, building.

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