captioning sponsored by macneil/lehrer productions >> lehrer: good evening. i'm jim lehrer. b.p.'s c.e.o. got a grilling from lawmakers today. they accused the company of taking risks that resulted in the massive spill. >> brown: and i'm jeffrey brown. on the "newshour" tonight: tony hayward denied he was

stonewalling ouse committee and said the company is doing everything possible to contain the spill. we have excerpts of his testimony and the latest from the gulf. >> there is a lot of tension and it's still quite volatile. humanitarian aid is coming there but it is quite difficult to deliver the aid in appropriate way to the people who are suffering. >> lehrer: we have another in our blueprint america series on infrastructure. miles o'brien reports on dubuque, iowa-- a rustbelt city with big hopes for a green and vibrant future. >> it is a community where you can live, you can go to the grocery store, the drug store, the doctor's office, you can get all over... around that neighborhood and around the city without ever having an automobile. >> brown: and we update europe's debt crisis as governments across the continent announce big spending cuts. >> lehrer: that's all ahead on tonight's newshour.

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by the corporation for public broadcasting. and by contributions to your pbs station from viewers like you. thank you. >> lehrer: it was a long, tense day at a u.s. house hearing today for the chief executive of b.p. tony hayward faced a barrage of questions and criticism over the oil disaster in the gulf of mexico. >> b.p.'s corporate complacency is astonishing. >> lehrer: hayward sat grimly for much of the day as hard words rang down from members of both parties. >> we could find no evidence that you paid any attention to the tremendous risks b.p. was taking. >> why is b.p.'s record on safety so spotty? >> since this hearing began a little over an hour ago, up to

112,847 gallons have been dump ed into the gulf. >> lehrer: it had been widely expected the b.p. boss would get an earful from angry lawmakers. but he also received an unexpected apology from republican joe barton of texas. >> but i'm ashamed of what happened in the white house yesterday. >> lehrer: barton was criticizing the announcement that b.p. would set up a $20 billion fund to pay damage claims. >> i think it's a tragedy of the first proportion that a private corporation can be subjected to what i would characterize as a shakedown. in this case a $20 billion shakedown. >> lehrer: barton is one of the largest recipients of campaign tprupb from the oil and gas industry and his statement brought rebukes in the hearing and elsewhere. vice president joe biden weighed in at the white house. >> there's no shakedown.

it's insisting on responsible conduct and a responsible response to something they caused. and i find it outrageous to suggest that if in fact we insisted that b.p. demonstrate their preparedness to put aside billions of dollars, in this case $20 billion, to take care of the immediate need of people who are drowning . >> lehrer: later, congressman barton said his remarks had been "misconstrued." >> i want to record to be absolutely clear -r that i think b.p. is responsible for this accident, should be held responsible, and should in every way do everything possible to make good on the consequences that have resulted from this accident. >> i'm going to ask you to rise, raise your right hand, take the oath. >> lehrer: hayward's turn to speak came after 90 minutes of

the hearing when he finally rose to be sworn. but he was promptly interrupted by a protestor. >> you need to go to jail! >> lehrer: when the outburst subsided, the b.p. chief set an apologetic tone in his reprepared remarks and he pledged again to make right the wrongs done by his firm. >> the explosion and fire aboard the deepwater horizon and the resulting oil spill in the gulf of mexico never should have happened and i'm deeply sorry that it did. we will not rest until we make this right. we're a strong company and no resources will be spared. >> lehrer: but beyond that statement, hayward had few details on the did sa *s, the cleanup, or his role. >> i'm not an oceanographic scientist. i'm not the drilling engineer so i'm not qualified to make those judgments. >> lehrer: the man chairing the hearing, democrat bart stupak of michigan, hammered away at allegations that b.p. took short cuts on the deepwater well. >> are you trying to tell me you

have not reached a conclusion that b.p. really cut corners here? >> i think it's too early to reach conclusions with respect, mr. chairman. the investigations are ongoing. >> do you expect to be c.e.o. of b.p. much longer? >> i'm... at the moment i'm focused on the response. i think everyone here believes that the highest priority is to stop the leak. >> lehrer: internal b.p. documents showed the deepwater horizon drilling operation was fraught with problems. one company engineer called it a "nightmare well." republican michael burgess of texas picked up on that point today. >> were you privy, then, to any other information, the difficulties they had had, the multiple gas kicks, lose tools down the hole, the length of time they'd been over the hole, the decisions to move quickly because we'd spend too much time over this well? >> i had no prior knowledge. >> who would have had that information? >> certainly the drilling team in the gulf of mexico. >> but you tier c.e.o. of the

company! do you have any sort of technical expert who helps you with these things who might have been there? >> with respect, sir, we drill hundreds of wells a year all around the world. >> i know, that's what's scaring me right now. >> lehrer: as the hearing wore on, california henry waxman drilled in on hayward's reluctance to say more. >> i'm not prepared to draw conclusions about this accident until such time as the investigation has concluded. >> well, this is an investigation and we expect you to cooperate with us. are you failing to cooperate with other investigators as well because they're going to have a hard time reaching conclusions if you stone wall them. which is what we seem to be getting today. >> i'm not stonewalling. >> i'm just amazed at this testimony, mr. hayward. you're not taking responsibility >> lehrer: but several republicans criticized the obama white house in equal or greater measure for its response to the spill. >> the lack of effort by this administration to contain the spill has doomed the economy and wildlife of the gulf coast from

an oil spill which could have been contained. >> i've heard some assert that it was lax oversight of the previous administration that led to this accident. well, if that's the case, why did this not happen during the last decade ? >> lehrer: meantime, admiralled thad allen talked on progress of drilling relief wells to stop the oil flow. he stop at the capitol. >> british petroleum has what they call a depth to day ratio. what depth should they be at by a certain rate. they're slightly ahead of that. that's promising. but given the technical difficulties we run into in putting the containment cap on and given the great depths they're working at. i don't think we ought to be assuming this will happen any time sooner than the first two weeks of august. >> lehrer: that's nearly two months away. and with august also comes the fifth anniversary of hurricane katrina. some on the gulf coast say that disaster could pale in comparison once the final damage from oil is assessed.

>> it was a lot worse than katrina was because he we was ae to come back from katrina. if this comes back, i don't know... if this comes here, i don't know where i would be able to come back. >> lehrer: to date, 59 days into the disaster up to 120 million gallons of oil have foul it had gulf of mexico. >> brown: still to come on the "newshour": today's decisions at the supreme court; political unrest in kyrgyzstan; going green in dubuque, iowa, and europe's debt crisis. but first, the other news of the day. here's hari sreenivasan in our newsroom. >> sreenivasan: at least 16 miners have died in a coal mine explosion in northwestern colombia. it happened last night at the san fernando mine in amaga, just south of medellin. today, rescue crews searched for dozens of workers still trapped underground, and feared dead. the force of the blast collapsed an access tunnel that is more than a mile long and plunges 500 feet down. authorities said they believe a build-up of methane gas caused the explosion.

at least nine people were killed at the same mine last august. european union leaders adopted new sanctions against iran today over its nuclear program. the restrictions are designed to block investments in iran's oil and gas sector, and limit its refining and natural gas capability. the e.u. penalties go beyond those approved by the u.n. security council last week. the u.s. imposed its own new penalties yesterday. israel has eased its blockade of gaza. a spokesman for prime minister benjamin netanyahu outlined the new terms today. they include letting construction materials for civilian projects into gaza. >> the government of israel took decisions to liberalize the system under which civilian goods may enter the gaza strip. to expand materials for projects inside gaza that are under international supervision, but, of course, we must remain with the security procedures that prevent the import into gaza of weapons and more materials that

could strengthen the hamas military machine. the militant group hamas rules gaza and a spokesman called the israeli move nothing more than "window-dressing." the chief negotiator for the palestinian authority, saeb erekat, was critical as well. >> there is no such thing as easing the siege. this siege must be totally and completely lifted. this is a collective punishment against 1.5 million people living in gaza. it has no political dimension. >> sreenivasan: an israeli naval blockade of gaza will stay in place. last month, israeli commandos killed nine people on aid ships bound for gaza. more than two dozen pakistani soldiers are missing after they were attacked by militants. in all, about 40 troops disappeared on monday, when their checkpoint was overrun near the afghan border. since then, at least 14 have been found or released. the u.s. justice department has arrested nearly 500 people in a major crackdown on mortgage fraud. attorney general eric holder announced today the roundup began in march, as part of

"operation stolen dreams." he said investigators documented more than $2 billion in losses from fraud schemes nationwide, including this one in chico, california. >> a prominent home builder caught with a significant amount of unsold new homes as the housing market cooled allegedly used straw buyers to sell his houses at an inflated price with undisclosed sales rebates. this scheme inflated prices on other homes in the area, creating artificially high comparable sales and affecting the overall new home market. >> sreenivasan: other major cases have unfolded in detroit, atlanta, new jersey and duluth, minnesota. wall street managed slight gains despite some disappointing news. the government reported first- time claims for jobless benefits rose unexpectedly last week. even so, the dow jones industrial average gained 24 points to close at 10,434. the nasdaq rose more than a point to close at 2,307. a panel of health experts concluded today a new morning

after contraceptive is safe and effective. the food and drug administration will now consider whether to allow sales of the new pill ellaone. it's already approved for use in europe. antiabortion groups have warned ellaone is more like an abortion drug than emergency contraception. those are some of the day's major stories, now back to jim. >> lehrer: this was a decision day at the u.s. supreme court. ray suarez has our coverage. >> suarez:f you own beachfront property, should you be company said if the government moves the ocean further away? if you text at work, on an office cell phone, do you have a right to privacy for those messages? and how many board members do you need to make a ruling stick at the national labor relations board? the u.s. supreme court is coming to the end of its term, and joining us to explain these rulings, our eyes and ears at the court, marcia coyle of the marcia, let's start in florida where beach front property owners ended up with beach view

property when an anti-erosion projected ad a lot more distance to the beach. what were they asking for in court? >> well, they went to court because they felt that what the state was doing here was, in effect, a taking of their private property. and under the constitution, they felt they had a right to be justly compensated for that. ultimately, the florida supreme court ruled against them. it found that they really didn't have a property right in what was happening to the beach here and there had been no taking. so they came to the u.s. supreme court and the court issued its decision today. >> suarez: and what did it say? >> there were two important parts to this case. the first part of it was that the beach front property owners had argued that a judicial decision could be a taking of private property. this is something that never... the supreme court had never faced before, usually when we think of a taking of private property, we think of a city, a state, a government unit. but what happened a court...

what about a court decision? four justices said, yes, a court decision can be a taking. but four other justices-- there were only eight today because justice stevens recused himself-- said "we don't have to decide this issue to decide this particular case." unanimously they decided that there was no taking in this case, that these property owners, they had a right to land that was added gradually and imperceptibly. they didn't have a right to land that was added suddenly. say by a hurricane or, as in this case, by the state dumping sand that had been dredged elsewhere. >> suarez: now, the legal idea of a taking. in this case it just meant that they felt that the value of their property was diminishing right? nobody took anything away from them. >> well, that was a very important part of their argument, yes, because the strip of land... it was a seven-mile strip of land.

the sand that was added was about 75 feet wide. it became public land and it was now between their property and the ocean. they had no control over who would go on that property or what would be done on that property. >> lehrer: next to california. a police sergeant tried to keep his texts private. how did this first get to court? why were they looking at the sergeant's texts in the first place? >> the city was concerned that its police officers and other employees might be paying more than they had to be paying out of pocket for work-related messages. they had issued to everyone who had these pagers and cell phones a certain number of characters and they said they wanted to find out if they had issued enough. not only if employees were paying out of pocket, but maybe if the city was paying too much for excessive personal use.

so they looked at two officers' pagers and messages. these officers had had o *ef rajs in the past. but they felt they had an expectation of privacy in their messages because superiors had said "if you pay for the overages, it would be okay." and these officers did. when the city decided to see if it needed to change the allotment of characters, they aud ted these two... audited these two officer's messages, found on the one there were a large number of personal and sexually explicit messages. he was disciplined. he went to federal court, sued saying his privacy right was violated and the city had engaged in an unreasonable search and seizure under the fourth amendment of the constitution . >> suarez: on that fourth amendment argument, how did the justices rule? is there any right to privacy on an office-owned communications device? >> well, in a way, like the florida case, the justices

decided that they did not... they would not today issue a broad holding about an employee's privacy expectations in cell phones, pagers, or technology... any technology. justice kennedy wrote for the court. and he said this technology is evolving so quickly today we have to be cautious. and also society's view of this technology and its use of this technology is also evolving. so we're not going to decide that. but we are going to assume that officer kwan here had an expectation of privacy and we're going to look at this search. and the court decided that this was a reasonable search. that the city had a legitimate interest in finding out if it needed to give more characters or if it was paying too much. it felt that it was a reasonable search to look at the transcripts of the messages because that was efficient and an expedient try answer the question. and then it was not excessively intrusive because it only looked

at two month's worth of the officer's messages. >> suarez: so if you're someone who uses business-owned communications devices, the courts literally is still out on just how much privacy you can expect on what you put in there. >> exactly. justice kennedy did say, though, that this type of search would be reasonable in the normal private employer context. but on the bigger issue of how much privacy we can expect, the verdict is out. >> suarez: finally on the national labor relations board, the active board finally got down to two members and they were issuing rulings. that was take on the the high court and what did they rule in. >> well, the court said today that roughly 600 labor/management decisions that the board has issued in the last two and a half years were void because only two members acted on those cases. >> suarez: they're saying that's not enough? >> that's right. the corporate was interpreting

the national labor relations act and it said that looking at the provisions of that act, it was necessary that the board have a quorum of three at all times in order to make decisions. >> suarez: so 600 rulings are void. duds that mean all of them have to be reargued with a larger board? >> no, it doesn't. i mean, we do know for sure that there are about 80 decisions that have been pending in the lower courts, that challenge two-member decisions. they will have to go back to the board to be reconsidered. another 500, it depends on the facts. in some cases, the employer or the union has already carried out what the board ordered. in other cases, they may still be complying. and at that point they may want to petition the court or the board to reexamine it. >> suarez: and very quickly, that has senate seated president obama's latest two nominees for that board? >> he actually did recess appointments of two and there's a third pending.

so the board has four of its five members right now. the recess appointments can expire, though, and the board could be back in the same position in a couple years. >> suarez: marcia coyle, thanks for joining us. >> my pleasure, ray. >> brown: now to central asia, where political turbulence, ethnic violence and a refugee crisis has hit the nation of kyrgyzstan. margaret warner has that story. >> warner: the magnitude of a looming humanitarian disaster in kyrgyzstan came more sharply into focus today. u.n. officials announced 400,000 people had fled the ethnic violence that began a week ago in this central asian country. that's four times the previous estimate. most are minority uzbeks. some 300,000 are sheltering along the now-closed border with uzbekistan with food and water in short supply.

>> (translated): there are some people here who have lost everything. who lost their home and cars. they don't even plan to come back. what would they do there? sleep on the ground? >> warner: another 100,000 refugees made it into uzbekistan before the uzbek government shut the door monday. the violence they fled was centered in osh, just three miles from the border. entire blocks there were reduced to charred rubble. witnesses reported roving mobs of young kyrgyz men looting and torching uzbek homes and businesses. >> armed gangs were coming in, they were accompanied by what they call a b.t.r., armed personnel carrier with people in uniform sitting on top who were shooting at people. when the people fled, the armed gangs who were accompanying them looted the houses and set fire to them and have basically destroyed the entire neighborhood. >> warner: the kyrgyz government estimates more than

200 people were killed with 1,900 wounded. but private estimates range much higher. aoerg stan and its four asian neighbors-- uzbekistan, kazakhstan, tajikistan and turkmenistan-- suddenly became independent when the soviet union collapsed in 1991. uzbeks make up just 15% of kyrgyzstan's population, while both ethnic uzbeks and ethnic kyrgyz are muslim, tensions tene flared before, including land riots in 1990. the catalyst for this round of violence isn't as clear. an interim government now headed by rosa otunbayeva took power in a bloody coupe in april. it accuses the former president, kurmanbek bakiyev, of inciting the unrest to regain control. the situation is being closely watched in washington. kyrgyzstan is home to a major u.s. air base at manas in the north, critical to refueling

ongoing operations in afghanistan. the kyrgyz government appealed to russia to send in troops but moscow has so far demurred. for now, u.n. official officials in the capital bishkek say the situation in osh is somewhat calmer but still fragile. >> in general there is a lot of tension and it is still quite volatile. humanitarian aid is coming there, but it is quite difficult to deliver the aid in a proper way to the people who are suffering. >> warner: but there are also some hopeful signs. residents of jalalabad 25 miles north of osh held a peace and reconciliation ceremony today. >> warner: for more on all of this we turn to fiona hill, a senior fellow at the brookings institution. from 2006 to 2009, she served as national intelligence officer for russia and eurasia, at the national intelligence council. and simon schorno, the u.s. spokesman for the international committee for the red cross,

which is one of the few international humanitarian aid groups on the ground in the affected kyrgyz/uzbek region. welcome to you both . sigh monoschorno, how bad is the situation on the ground? clearly the humanitarian crisis on the ground with tens of thousands displaced, several hundred kill in kyrgyzstan and uzbekistan, the situation is critical. the medical facilities are overwhelmed with very little medicine. people displaced have no water, no kwaod. so the needs are enormous and many people killed on the ground as well. >> warner: how are tae living? do they have shelters? >> we met thousands of people living in schools, build ings, mosques, yesterday we met 6,000 people in a mosque, for example. so very difficult for people all over the place, occupying buildings and living where they can be. >> warner: have you been able to talk to people and help people on both sides of the border or just the kyrgyz side of the boarder?

>> for now we're on the kyrgyz side but we landed a plane in uzbekistan so we'll be there by tomorrow. >> warner: so you're not able to say whether either group is getting along better. >> i think it's too early to assess this. >> warner: what are people saying about whether they want to return home? >> you know, really at this point we really haven't got than far because really assessing the humanitarian needs, the needs are such that people talk about what they need to survive and that's where we focus. >> warner: finally the medical situation. there's so many injured. what can you tell us about that. >> hospitals have no medicine or very little medicine following the influx of wounded patients so they've been able to cope with the means they have. they need medicine, they need to bring in additional staff which we're trying to do. >> warner: i wanted to ask you, the u.n. report just out today said there was unusually high incidents of sexual violence. were you able to confirm that? >> yes, we did meet several women in the past days who had been raped. definitely. we collected their testimonies

and we'll follow up. certainly we've met many cases of rape. >> warner: so fiona hill, these two groups have been living together in this valley for, i don't know, centuries, maybe. is this ethnic tension run amok or is there something else going on here in terms of what explains it? >> i think thiss that combinatif many things. in your introductory segment you pointed out in 1990 there were similar clashes in the region over land disputes. this is something quite different. you also mentioned that in april there was the overthrow of the previous government. so there's a really strong political component to this. it's clearly from some of the evidence that's been gather sod far by people on the ground that in many respects this was deliberately *eupbs stated. that there were groups of armed men who went into neighborhoods and started to take pot shots both at uzbek populations and kyrgyz populations. it's easy to spark off something in this he region where there's already political tensions are high and this is a region of high unemployment. osh is one of these transit

areas throughout the whole region where a lot of people pass through and off lot of ethnic kyrgyz and ethnic uzbeks from the region who have been seeking employment next or in kazakhstan further apeeled in russia sending money back. all of these populations have been very hard hit by the economic downturn. so this is a lot of... a lot of tensions in the area of the economic situation over political issues and everything else . >> warner: so you already have a volatile situation and who has the incentive to light the spark? >> the problem is there are multiple people with incentives. there was a reference in the segment to president bakiyev who was ousted in april. >> warner: and the current government is accusing him of doing this. >> correct. but there's a lot of evidence criminal gangs who operate in the area, this is a trafficking area for drugs, smuggling, it's an area of general contraband that goes through the local markets. >> warner: and a lot of it from afghanistan, i understand, the drug trade. >> this is one of the thoroughfares on the drug routes from afghanistan through central asia into russia.

so you've got a lot of stakes at play here for groups who have a vested interest in keeping things as they are, keeping their roots open. and then also, you know, the youth violence that we've seen here, disaffected young men who were easily stirred up on the idea of a grievance and taking revenge against other groups. >> warner: speaking of stakes. what is the u.s. stake here? secretary clinton was on the phone today to both the kyrgyz president, she was scheduled to call the uzbek president. the u.s. has stepped up with $32 million worth of aid for the u.n.-led effort. what is the... what could go wrong for the u.s.? what's at risk for the u.s. here? >> well, osh is some distance in the south of kyrgyzstan away from the base that was referenced. we have now a transit center in manas outside of bishkek which has been one of the main transit route for our troops and the supplies for the coalition efforts in afghanistan. so clearly it's very important to keep this line of communication open for us. and at sreurs points, the kyrgyz

government had been trying to leverage this by encouraging us to also think about building a similar transit center in the south in osh precisely because they were worried about the volatility of this region and thought that having a u.s. presence there might be a stabilizing factor. clearly we've been reluctant to move in that direction but we have stake there is and broad instability in kyrgyzstan that's spread throughout the region would be of great concern to us. >> warner: now that u.n. special envoy we quoted in the piece also said today or said yesterday to reuters that if you had continuing instability there that it would provide what he said was fertile ground also for islamic extremist organizations who are already active in other parts of central asia and, in fact, from uzbekistan have sent a lot of fighters to afghanistan. >> that's correct. there's been quite a vibrant in the past insurgent movement, militants in the region. we've had incidents in uzbekistan across the border. people will probably recall a

few years ago the incident which, in fact, is where the international red cross have been sending in their supplies. and so the more that you have instability and tension it is easier it is for militant groups to work in the future . >> warner: will the u.s. and russians continue on this? the kyrgyz government asked the russians to send troops and they said no for now. >> we're talking about the russians. this is a unique situation in kyrgyzstan. there's a russian and u.s. base in bishkek. the russians had been talks about setting up a counterterrorism center in the south against the insurgency threats that's been a great concern r the regional powers. the u.s. does want stability just as russia does so we have mutual interests here . >> warner: simon, back to you. what's next for the international aid effort? >> it's starting to take shape. we were the sole organization on the ground until yesterday so we focused on osh and the

surroundings of osh. we're landing a plan where we will try to reach the refugees that have crossed the border and that's the focus now to reach those refugees as soon as possible and provide basic supplies to them so they can cope with the daily needs in the kphopling days. >> warner: are there enough resources to do what needs to be done? >> well, the needs are enormous. a single organization like the international red cross can't cope with those needs. there will be a need for a greater, larger, wider humanitarian effort. so i think we're just seeing the beginning of that effort now. >> warner: just briefly, what about the political situation on the ground? in other words, the kyrgyz and uzbek governments, are they making it easy for you to operate? >> we had a presence in kyrgyzstan before this round of violence. we were able to deploy rapidly in kyrgyzstan. in uzbekistan we're negotiating access to the places where the refugees are but we're confident within 24 hours we should be able to get there. >> warner: we were told that was going to be the subject of secretary clinton's call to the uzbek president. simon schorno, thank you very much and fiona hill.

>> thank you, margaret. >> lehrer: next, another of our blueprint america reports on infrastructure. tonight, a factory town bets on a green future. our story was produced with wnet-new york. the reporter is special correspondent miles o'brien. >> good saturday morning, michael kay at farmer's market, iowa's oldest open-fair farmers' market. 165 years . >> suarez: dubuque is one of the oldest cities in iowa. home to 60,000 people. >> hi, mr. mayor. >> good morning, michael. >> good to see you again. >> great to be here. beautiful day. >> reporter: the people in this old factory town along the mississippi have signed on the a unique experiment. they're attempting to turn dubuque into one of the nation's most sustainable cities. the man leading the charge is mayor

roy buol. he spent decades working at the factory floor of john deere. five years ago he ran for mayor on a green platform and won. how does a guy who works with his hands at john deere all those years become a mayor so interested in the other kind of green-- green issues. >> well, i can tell you, it really started for me when my wife and i started being blessed with grandchildren. i just started thinking, you know, what kind of a world are we going to be leaving for future generations with our consumption patterns and how wasteful we were in our energy usage. >> reporter: dubuque could have turned out to be a classic rust belt story. but for the past two decades, the city has been working to avoid that fate. take a quick look. a revitalized river front, a new convention center, and a museum. far beyond the banks of the mississippi, people are noticing. the u.s. council of mayors called dubuque the most livable small city in america. "forbes" magazine proclaimed it number one small city for

projected job growth. even the federal government is calling dubuque a model for 21st century economic development. dubuque, iowa? the quintessential city of the future? apparently o. so what is it that makes this place a model for sustainability buol believes the model starts with community input. shortly after taking office, he formed a citizen task force to draw up a blueprint for sustainability. >> and they brought that back to the city council for our approval and i think they hit a home run. today that plan is looked at by other communities as kind of a benchmark. >> reporter: it's great to have benchmarks, but you also need the bucks. dubuque has been effective at combining the two. >> citizens of dubuque, you hear proclaim the week of may 8 to the 15th, 2010, as americorps week in the city of dubuque, iowa. >> reporter: when we were here, we witnessed one small example.

the city council recognized these young americorps volunteers here for a door-to-door campaign to install energy saving devices court zi of the environmental protection agency. >> i want to make my house efficient. >> reporter: candice ewe dalely is a 25-year-old born and raised in dubuque. this gadget will cut her water usage by 40%. >> i don't think i would know what air rater to buy at the store. so having them come in, it was like a universal air rater was awesome. >> reporter: she believes dubuque is moving in right direction. >> do you have plants outside? >> yes. >> okay. >> i've been to a lot of interesting cities, no one's perfect. not everything ... not everyone is doing everything but dubuque is planning to do everything and do it pretty well. >> reporter: in order to convince younger citizens to stick around, the mayor says dubuque needs a vibrant, livable downtown. >> the vision is to turn this

area into what we call work force housing for those young professionals that are coming to town today. we wanted-to-redevelop this into housing that they would like to live in at a price that they can afford and create complete streets to replace what we have here. these streets are a hundred years old plus. >> reporter: complete streets. this is where the rubber meets the road for rebirth here. in streets, sidewalks, bike lanes and even public transit, they're all on their way now that dubuque has landed a $5.6 million chunk of last year's federal economic stimulus package. buried in that bill is a tiny pilot program for infrastructure projects just like this. it's meant to promote the obama administration's vision for smart growth. last fall, three members of the obama cabinet came to dubuque to promote their livability agenda. >> this is an opportunity for you to say to your kids you can now come back to dubuque because there's some opportunities here. >> reporter: transportation

secretary ray lahood was flanked by his counterparts at the environmental protection agency and housing and urban development. the so-called green cabinet. >> the definition of livable communities, people ask us all the time, what does it mean? it's a community where you can live, you can go to the grocery store, the drugstore, the doctor's office, you can get all over... all around that neighborhood and around the city without ever having an automobile. >> reporter: that last point is really important. it represents a big policy shift in washington where for decades transportation funding was inextricably linked to building new highways which created the suburbs and sprawl. to get people back downtown , mayor buol cut a deal. >> the addition of 1300 people in our downtown work force will accelerate the realization of our vision for revitalized warehouse district. >> reporter: the city of john deere's big green machines is

now also home to big blue. i.b.m. recently moved in to this newly refurbished energy efficient landmark building. turns out i.b.m. came here in part because dubuque's philosophy syncs up nicely with one of the corporation's new ventures. >> on a smarter planet we can analyze the data we see. >> reporter: i.b.m. intends to develop and sell technology to help cities run more efficiently v.p. robert morris says dubuque is the perfect place to beta test these new product ideas. >> so it became a double attraction to us, just not the attraction of doing an i.t. delivery center but also the attraction of saying, hey, this could be america's most advanced almost integrated almost innovative smarter city. >> reporter: so the one-time factory town in the midwest come this is incubator, this laboratory for the city of the future. it's an ironic twist and it leaves a lot of people a little bit uneasy.

what happens if this partnership goes out? >> when i.b.m. was making this great announcement for dubuque they were also laying off 5,000 people in the united states and those jobs went overseas. so when i.b.m. get this is thing up and running, are those jobs going to get pulled out and sent overseas? and if they are, that's going to be a hell of a void to fill in dubuque. >> reporter: bill hamme shr *rbgs a retired fighter and former city councilman. he's worried an incentive package may be too high a price to bring i.b.m. to town. >> if i.b.m. were going to stay here it would be great. but it seems like it costs an awful lot of money. they're not hiring that many dubuqueers. >> reporter: why did i.b.m. get such a special deal and was it worth it? >> i think it was what we had to do to compete with other communities that were trying to lure i.b.m. at the end of this year, we're going to have 1,300 i.b.m.

employees in the city with an annual total payroll of about $60 million. turning over in our community the rest raublts downtown, the housing, that kind of money, every year in the city of dubuque. >> i'm sure it would be accurate to say you wouldn't be here were it ngor for those incents, right? >> the incentives certainly helped but just as important as the incentives were the approach the town took towards strengthening and making the city more sustainable. it wouldn't help us if we brought jobs here and several years later found that our people didn't want to live here . >> reporter: bill hammel remains skeptical. >> look around, it's clean, fairly friendly people. so to me that's what makes dubuque livable. but this sustainable stuff. livable. those are buzz words. they don't mean anything. >> reporter: but for many in town, those same words have meaning. >> i do not think i was going to

be here when i was 25. i definitely did not think, oh, yeah, when i... like when i was in high school, this was not where i was going to be. but i think it's getting to be a place where i want to be. so i may be here for quite a while. >> reporter: the verdict is still out on dubuque's sustainability initiatives. but one thing is for sure. sustainability is good politics for you, isn't it? >> sustainability is excellent politics. it's excellent politics for anyone living in a community where you've involved citizens and given them the information they need to make that decision. >> reporter: back in washington, the green cabinet will soon handout another $600 million worth of grants to cities working on livability programs like dubuque's.

>> brown: finally tonight-- to europe, where the name of the game is austerity. in the face of fears over growing debt, governments throughout much of the continent have recently announced major spending cuts. and those plans, in turn, have aroused public protests and opposition. yesterday france took new steps, including plans to raise the minimum retirement age from 60 to 62 by 2018. here to update the situation: simon johnson is an economist and professor at the massachusettes institute of technology's sloan school of management. he is also senior fellow peterson institute for international economics and co- author of "13 bankers,," an assessment of the recent financial crisis. and sophie pierson is a freelance reporter for french public television and other media outlets. born and raised in france, she holds french and american citizenship. >> the fears spread to spain, which is somewhat in a different category. now they're looking at countries like france that previously were thought of as safe havens that are under a great deal of pressure from the bond markets.

>> brown: so this is the market... this is investors demanding that governments make these... take these steps? >> it's investors demanding that they be reassured that the governments can get their debt on to a sustainable path. this is a question all around the world. that is question even in the united states and it's not an unreasonable question. the problem is the europeans have been in denial for too long and it's a big shock to policymakers and electorate and a lot of people, including france, know they have to deal with it now. >> brown: before i get to france, you mentioned spain. spain is having stress tests for its banks, something we experienced last year. >> all of europe supposedly is now going to redo and publish the results of stress tests they did last year but they buried the results. it's going to be interesting to see what comes out of it. it's not clear what they thought through in germany what they're going to reveal about the banks. they here in weak shape and we'll see about spain. some people are claiming the russells are good but we're just at the stage of getting leaks

trying to push the market. >> brown: sophie pierson, he talked about it spreading to bigger economies like germany and france. what's going on in france to have the french government announce measures very recently, even yesterday. >> well, like any other european countries, they are big asked for fiscal responsibility and fiscal discipline. this is reassuring for the financial markets. there is no obvious link between increasing the years for retirement and the financial market, but it brings trust on the market. secondly, there is a huge deficit. now, the pension is going to reach $39 billion this year. it was $32 billion and it's going to reach $39. what the french government is hoping to do is by 2018 they will make a significant saving

and it's going to be about $19 billion. >> brown: sophie, i want to pick up on the question of the retirement age because that tohose... to us in the unitedge states but the french economics minister said today we have broken the myth of retirement at 60. this is clearly more than an economics question, right? this is a societal norm about how people think about work and life. >> if you go back in history it was going down from 65 to 60 was the previous administration and now that they are raising it up, it feels like the victory from the past is lost. so that's why french people are very dissatisfied. 52% feel it's completely unfair and 60% strongly disagree. >> brown: simon, how do you see these societal changes about things like retirement age. >> it's very interesting. sophie is right, it was only in 1983 they reduced the age of

retirement from 65 to 60. now france has one of the lowest retirement ages in europe across any industrialized country by they don't want to give it up. it's become a right and this is what the bond markets are pressing on. they want to know can the governments make any changes, any significant changes in the right direction with regard to stabilizing the fiscal picture and we'll see this summer in tpropbs what kind of protests you get, what kind of backlash against the proposed legislation. when president jacques chirac tried to do something similar, a little more dramatic, he was the previous president of france, he had to give it up because the protests were so strong. >> brown: sophie, so what's happening now, where will the opposition come from? >> okay, so basically the opposition is saying that... it's a reform that is being proposed to the legislative bodies so it's not enacted. on june 24, even the... there's no solution that is found between the left and the right

then on june 24 the union are going to go on strike. of course, this is an announcement. we don't know what's going to happen between now and june 24 so let's wait and see. >> now, simon, this is a fine balance, right? i mean, because when governments take these kind of steps, their economies get smaller and can shrink. there's an argument that you don't want to do that at the time when we're still not sure about the state of the recession and getting out of it. >> absolutely. france doesn't want and we don't want france to attract their economy. that's not help to feel global growth. but the bond market is pressing to see some orth of result so you want to see some significant steps. you want to see a government that can stick to its guns. already there was a backdown because the government was talking about potentially raising the age from 60 to 63 and now it's 62. so you wopbder in this environment can they do anything? can they control the budget deficit? you want them to show control but not engage in preup tonight and extreme austerity. that would be most unfortunate. >> brown: you just mentioned

the potential impact on the u.s. explain that. >> global growth is important to us on this stage. we want trade to come back, we want our exports to rebound. we worry about the dollar. the dollar has weakened considerably about the euro as a result of these events. none of this is helpful to us coming out of our recession to unemployment coming down. >> brown: even as the euro dropped so much recently. >> absolutely. the fall in the euro is helping their economies, helping them export. it's not helping us. i don't think we should begrudge them too much. they're in bad shape. and the fall in the euro is helping stabilize the european situation to some extent. what we need is europe to get back on a sustainable reasonably rapid growth path. right now there's some years from getting there. >> brown: sophie, to what degree is this a political issue going forward? >> it's a huge political issue because. >> the opposition and the left is saying that the government is unfair

, that it's touching the working class because the people who have to pay. it's a mandatory system, not like in the u.s. where you can basically choose whether or not you're going to privately fund your retirement. so for french people and the one that are not making a lot of money, they're going to have to work longer and contribute more for a system that doesn't give them back what they were hoping for. >> and is there any sense in terms of public attitudes are there generational differences here in terms of how people look at what they have to give or what the governments have to do now? >> yes, absolutely. i think that the young people may understand better that the economy has changed, that the life expectancy has increased and that the government cannot fund retirement plan in a sustainable man they are way for so long. if people live longer and longer, you're going to have to pay more and more and the people that are contributing are going to be less and less.

so it creates a huge gap. so i think the young people are basically understanding because they are more attuned with what's going on. the... you know, the senior generation may find it very unfair because as they were all hoping to retire at age 60 now they're going to have to wait longer. with an exception. the government is making two exceptions. for example, if you started working early in your life, you're going to be able to retire early with the new system. >> brown: all right, we will... >> and also, there is another difference. if you had a very hard job, you're going to be able effectively to retire earlier than 62. so the government is making some exception as well. >> brown: all right. we will watch it unfold. sophie pierson and simon johnson, thank you very much. >> lehrer: again, the major developments of the day: the chief executive of b.p. tony hayward faced a barrage of

criticism at a u.s. house hearing. he offered few answers about the gulf oil spill, but he denied stonewalling. a humanitarian crisis loomed in kyrgyzstan, as u.n. officials estimated 400,000 people have fled ethnic violence. and rescuers in colombia searched for scores of missing men after a coal mine explosion last night. at least 16 miners were killed. the "newshour" is always online. hari sreenivasan, in our newsroom, previews what's there. hari? >> sreenivasan: you can find earlier reports from the blueprint america series and a link to a web-only video from dubuque on other experiments to revitalize the city. we live blogged today's congressional hearing with b.p. c.e.o. tony hayward, and you can read reactions from energy analysts, environmental experts and others. plus, an iran story. it's been a year since street protests erupted there after a disputed election. we interview two authors about what's happened to the country's opposition movement. all that and more is on our web site, newshour.pbs.org. >> lehrer: and again, to our

>> lehrer: and again, to our honor roll of american service personnel killed in the iraq and afghanistan conflicts. we add them as their deaths are made official and photographs become available. here, in silence, are nine more.

>> brown: and that's the "newshour" for tonight. i'm jeffrey brown. >> 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 has been 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