PBS NewsHour : WMPT : January 24, 2012 6:00pm-7:00pm EST : Free Borrow & Streaming : Internet Archive (2024)

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captioning sponsored by macneil/lehrer productions >> woodruff: the white house says president obama will call on americans to "rebuild an economy where hard work and responsibility are rewarded" in his third state of the union address this evening. good evening. i'm judy woodruff. >> ifill: and i'm gwen ifill. on the newshour tonight, we'll preview the speech with white house press secretary jay carney. >> he's just simply using every tool in his tool box to make progress on his number-one priority: growing the economy, creating jobs here at home. >> woodruff: jeffrey brown has the latest from the republican campaign trail including last night's debate. >> ifill: plus we examine how frontrunners newt gingrich and mitt romney made their money and

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paid their taxes. >> woodruff: and we see how all of this looks to "new york times" columnist david brooks and "washington post" columnist ruth marcus. >> ifill: then, from russia, jonathan rugman of independent television news reports on dissident groups in st. petersburg opposed to vladimir putin's return to power. >> woodruff: margaret warner looks at the fallout from a marine's guilty plea in the killing of two dozen unarmed civilians in haditha, iraq. >> ifill: and paul soman has the story of financial watchdog richard cordray's first appearance on capitol hill since his recess appointment by president obama. >> woodruff: that's all ahead on tonight's newshour. major funding for the pbs newshour has been provided by: >> 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

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by the corporation for public broadcasting. and by contributions to your pbs station from viewers like you. thank you. >> woodruff: it's state of the union night. president obama will go before the nation this evening to lay out his view of the united states' progress, problems, and priorities. ray suarez begins our coverage. >> suarez: when the president takes the house rostrum tonight, he's expected to bring the congress a plea for economic fairness. he said as much in a video to supporters on saturday posted on his campaign website. >> we can go in two directions: one is towards less opportunity and less fairness or we could fight for where i think we need to go: building an economy that works for everyone. not just the wealthy few. on tuesday night i'm going to talk about how we'll get there. i'm going to lay out a blueprint for an economy that's built to last. >> suarez: white house aides

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said the address would touch on four key themes: boosting american manufacturing, offering new education and training programs for workers, increasing alternative energy sources, and strengthening bedrock american values. the president will also make a renewed push for higher taxes on the wealthy, including a minimum tax on those who make at least $1 million a year. it's the so-called buffet rule named after billionaire investor warren buffet who has famously observed that under the krnt system his secretary pays a higher tax rate than he does. in fact, buffet's secretary, debbie, will join mrs. obama tonight in the first lady's box in the gallery. in this election year, the president will in effect be making the argument for his re-election when it comes to capitol hill tonight. but already hours before the address, republicans, both here on capitol hill and on the campaign trail, were voicing their objections. >> the republican....

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>> suarez: senate minority leader mitch mcconnell spoke on the senate floor this morning. >> it's hard not to feel a sense of disappointment even before tonight's speech is delivered because while we don't yet know all the specifics, we do know the goal. the goal isn't to conquer the nation's problems. it's to conquer republicans. the goal isn't to prevent gridlock. but to guarantee it. >> suarez: democratic majority leader harry reid urged the opposition to be open to the president's ideas. >> for three years the president has reached out to republicans. now is the time to work with him on common ideas to boost legislation not stalemate. i ask my republican colleagues to give his bipartisan vision the consideration it deserves. >> suarez: the men who want mr. obama's job charge there's nothing bipartisan about the president's plan. republicans mitt romney annuity gingrich spoke at separate events in florida. >> tonight we're also going to

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get treated to more divisive rhetoric from a desperate campaigner-in-chief. it's shameful for a president to use the state of the union to divide our nation. >> tonight the president will explain that it was all george w. bush's fault. (laughing) this is the fourth year of his presidency. he needs to get over it. >> the president himself goes on the road tomorrow to make his case. he'll campaign in five swing states over the next few days. >> ifill: we get more on the president's speech and his election year agenda from white house press secretary jay carney. i spoke with him a short time ago. jay carney, thank you for joining us. already the republicans have been out today in advance of the president's speech tonight talking about debt, decline and disappointment in advance of the speech. what do you say to that? >> well i think it's unfortunate because what could be more political than criticizing a speech before you've even heard it. the president will deliver the

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state of the union address tonight. it's not a political speech. it's not a campaign speech. it's a vision for where he believes we ought to go with this country as we build an economy that is strong and firm and built to last for the future. where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules. it's going to be policy-specific filled with proposals to help enhance manufacturing in the united states, enhance the development of skills for american workers, and it is infused with american values. i would have hoped that critics like that would have waited to hear what the president said and hear his call for all of us to work together: republicans and democrats alike. to get things done for the american people and grow this economy. >> ifill: in an election-year situation, the president's final state of the union speech of this term, is it fair to say that he is using the bully pulpit tonight as a way to launch his re-election

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campaign? >> you know, it's actually not the case. because there will be plenty of time for president obama to engage in the election. right now because of the support he has within his own party, he doesn't have a primary contest. that's happening on the other side in the republican party. he's able to do his job. you know, he didn't run and wasn't elected to the presidency just so he could run again. he ran because he saw a need to change the direction of this country because the middle class was being squeezed. he saw even before the recession, gwen, as you know, middle class saw its incomes either stagnating or declining while the very wealthiest americans saw their share of the pie grow substantially larger. we need to address the challenges that our economy is facing right now. we need to do it together. he will call on congress to work with him. he will say that where he can act administratively using his executive authority to move our economy along, to help it grow, he'll do that as well. >> ifill: you talk about

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acting administratively, i assume that means without congressional endorsem*nt. is that going to create a problem in that room and beyond tonight in. >> no, i don't think so because, for example, just last week we were in orlando, florida. the president was at walt disney world talking about an initiative to bring more foreign tourists to the united states especially from growing, growing economies like china and brazil. when those foreign tourists come to the united states and visit places like walt disney world or any of the magnificent places across the country that tourists go to, they're bringing their money and spending it here and creating jobs in the united states. the initiatives he announced last week were all executive actions and executive order and some executive initiatives that did not require congressional action. that's something that i think democrats and republicans can support. he's just simply using every tool in his tool box to make progress on his number-one priority: growing the economy, creating jobs here at home.

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>> ifill: presumably as most presidents before him, the president will say tonight that the state of the union is strong, yet every measure shows most americans think that the union is actually heading on the wrong track in the wrong direction. how does he bridge that gap in perception? >> i think what he will say is that we are getting stronger, but it is absolutely the case that when he took office the economy and the united states of america was in free fall. and the devastating blow that the recession caused to this economy cost 8 million jobs. that's what he has been focused on dealing with since he took office. the fact is ever since his policies began to take effect, the economy has been growing again and it's been creating jobs again. more than three million private sector jobs. last year's private-sector job creation in the united states was greater than at any year since 2502005. the recession was very, very deep. but we're moving in the right direction. there are other positive trends especially in american manufacturing.

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you'll hear the president talk about that tonight. the manufacturing sector of our economy is growing for the first time since the 1990s. additionally we're seeing positive trends like american companies in-sourcing, bringing job back from china and building factories here in the united states and hiring american workers. these are all positive developments but we have a long way to go. >> ifill: finally, the president, is he going to renew his efforts to tax the wealthy, something... a fight that he basically lost to congress last time? >> he will certainly make the case, gwen, that we need a system where everyone does his or her fair share. what that means is that you've heard him talk about the buffet rule referring to warren buffet where millionaires and billionaires in this country should not be paying a lower effective tax rate than working and middle class americans. it's just not fair. we have big things that we need to do to ensure that this economy remains strong and that we are the dominant economy globally in the 21st century just we were in the 20th. we need to be investing in

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education, innovation, research and development, clean energy technology. we need to protect medicare and social security and medicaid for our most vulnerable citizens. in order that, everybody has to pay their fair share. that means changing our tax code, reforming it in a way that billionaires and billionaires are not paying a much lower tax rate than regular folks out there. >> ifill: we'll be watching for the president's words tonight. thank you very much for joining us. >> thanks for having me, gwen. it's always a pleasure. >> woodruff: still to come on the newshour, the g.o.p. presidential campaign heats up in florida; the candidates' wealth and taxes; the analysis of david brooks and ruth marcus; russian dissidents in st. petersburg; the plea deal in the haditha killings; and a grilling for the nation's financial watchdog. but first, the other news of the day. here's hari sreenivasan. >> sreenivasan: forces loyal to moammar gadhafi have seized control of a key city in libya, three months after the dictator's death. they retook the former gadhafi stronghold of bani walid today, after clashing for hours with revolutionary forces.

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it is the most serious challenge yet in a growing list of problems for libya's transitional government. a string of car bombings rocked baghdad today, killing at least 14 iraqis. the explosions went off in mainly shiite areas of the capital. more than 70 people were wounded. the first bombing hit a group of day laborers gathering for jobs. shortly thereafter, another bomb exploded near a pastry shop in a busy commercial district. violence has surged in iraq in recent weeks, as a sunni versus shiite political crisis grips the government. six gulf arab nations withdrew their peace monitors from syria today to protest the regime's continued violence against its people. it was a major blow to the arab league mission, but the league said the effort would continue. meanwhile, in damascus, the syrian foreign minister insisted his country will solve its own problems. >> the solution is a syrian one. it's based on the interests of the syrian people and the completion of the reform program proposed by president al assad.

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it is also based on national dialogue for which the president announced he's prepared to begin tomorrow. >> sreenivasan: despite that statement, the syrian government agreed to extending the arab league monitors' presence for another month. the government of turkey is warning france over a new law aimed at mass killings during world war i. on monday, the french parliament made it a crime to deny that ottoman turks committed genocide by slaughtering more than a million armenians in 1915. turkey has long denied there was any systematic killing campaign. and in ankara today, turkish prime minister recep tayyip erdogan urged the french to think again. >> here i call on the member of the french parliament in their right minds. i call on frerng intellectuals, french people. the bill that was pass with votes from both the parliament and the senate is open discrimination, racism. it is a clear violation of freedom of thought. >> sreenivasan: turkey had already suspended military,

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economic, and political ties with france as the genocide bill progressed. the largest solar storm in more than six years began bombarding the earth with radiation overnight. the solar bursts erupted on sunday, and the effects are expected to last through tomorrow. the radiation can disrupt communications for satellites, astronauts, and airplanes. today delta air lines said it's diverting some flights on polar routes between detroit and asia to avoid the problem. on wall street today, the dow jones industrial average lost 33 points to close at 12,675. the nasdaq rose two points to close at 2786. those are some of the day's major stories. now, back to judy. >> woodruff: the republican presidential campaign was dominated today by financial documents, released under pressure. the former frontrunner, mitt romney, put out his income tax returns, hours after rival newt gingrich released a disputed employment contract. we begin with this report from jeffrey brown. >> brown: mitt romney wasn't talking about his taxes as he campaigned in florida today. but at last night's debate in

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tampa, he had offered this assessment. >> will it be a discussion? sure. will it be an article? sure. is it entirely legal and fair? absolutely. i'm proud of the fact that i pay a lot of taxes. >> brown: the romneys earned $21.7 million in 2010, nearly all of it investment income. they paid about $3 million in taxes for an effective tax rate of 14%. and gave about $' million to charity, roughly half going to the mormon church. for 2011 romney estimates he earned nearly $21 million and will pay about 15.4% in taxes. the canned date's father former michigan governor george romney released 12 years of returns during his unsuccessful run for the presidency in 1967. but at last night's debate in tampa, the son ruled out going that far. >> going out with 12 years of returns is not something i'm going to do. i'm putting out two years

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which is more than anyone else on this stage. i think it will satisfy the interest of the american people to see that i pay my taxes, where i give my charitable contributions. i think that's the right number. >> brown: meanwhile former house speaker newt gingrich made a document dump of his own a short time before the debate. he released his 2006 contract with mortgage giant freddie mac to back up his assertion that he was hired to do consulting not lobbying. during the debate, romney said it didn't matter what gingrich called it. >> i don't think we can possibly retake the white house if the person who is leading our party is the person who is working for the chief lobbyist of freddie mac. freddie mac was paying speaker gingrich a million 600,000 dollars at the same time freddie mac was costing the people of florida millions upon millions of dollars. >> if you read the contract which we've posted, it has very clearly said supposed to do consulting work.

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the governor did consulting work for years. i never suggested his consulting work was lobbying. there's no place in the contract that provides for lobbying. i've never done any lobbying. >> mr. speaker, you were on this stage at a prior debate, you said you were paid $300,000 by freddie mac for an historian. they don't pay people $25,000 a month for six years as historians. >> brown: gingrich said romney's charges were ironic given that the former massachusetts governor was himself an investor in freddie mac and its sister company fannie mae. for his part former pennsylvania senator rick santorum charged last night that both romney and gingrich had abandoned conservative principles in the fights over health care and financial bailouts. >> there is no difference between president obama and these two gentlemen. that's why this election here in florida is so critical. that we have someone that actually can create a contrast between the president and the conservative point of view.

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>> brown: texas congressman ron paul said again he had no intention of launching a third- party bid. he was asked directly about gingrich. >> would you support a newt gingrich as nominee of the g.o.p.? >> you know, he keeps hinting about attacking the fed. he talks about gold. now if i could just change him on foreign policy, we might be able to talk business. >> brown: but for now at least the main business of the republican nomination fight: tax returns and contracts. the florida vote is one week away. >> woodruff: reporters and experts spent much of this day sorting through what was and wasn't released by mitt romney and newt gingrich. we take a closer look at what the documents tell us with a pair of reporters who have been poring through the papers. brody mullins is an investigative reporter with the "wall street journal." and jeanne cummings is an editor at bloomberg news. we appreciate you both being withs. brody mullins, i'm going start with you on governor romney. the total income he released

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2010-2011, $43 million almost. what was that income from? >> mainly from investments. the tax code in the u.s. is set up in a way that when wealthy people invest in various funds and take a capital gain or dividend from that, they pay a very low tax rate, a 15% tax rate. for not lifting a finger or doing any actual sweat equity he was able to get his lower 15% tax rate as opposed to a tax rate as high as 35%. >> woodruff: roughly what kind of investments? >> mainly through his former employer bain capital. which then set up... there is there are dozens of separate firms that bain invested in that he was taking dividends and capital gains from. >> woodruff: the tax rate around 14%. >> 14%. >> woodruff: which is pretty close to normal for this kind of income. is that right? >> right. the normal rate would be 15%. he was at 14% or a little bit lower than that. >> woodruff: and how was he

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able to do that? i mean, remind us of the law that allows one to do that. >> when president bush was in office he lowered the capital gains rate to 15%. that's a lower tax rate than a normal tax rate on investment or on a normal salary income. he lowered that to 15%. so any investment income gets taxed at that rate. that's why he was able to do that. >> woodruff: and what would you say is the average or median rate that most americans pay? >> most wealthy americans pay about 30%. newt gingrich paid about 30%. a lot of americans don't pay any taxes. the average tax rate is is sort of the in the mid 20s. he's half as much as even, as most wealthy americans. >> woodruff: his campaign says he paid everything he owed. he didn't take any aggressive steps to either avoid or defer taxes. is is that what it looks like from all these documents? >> he certainly complied with the law. he hired several smart tax

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attorneys to make sure that he complied with the law and got his tax rate as low as possible. he said last night-- i thought it was a pretty good line-- when he said he paid every dollar he owed but not a dollar more than that. at the end of the day he paid $3 million in taxes. >> woodruff: did he have a choice in how he structured his income that affected the taxes and, among other things, for example, medicare taxes? >> right. again that's a situation that complys with the law but when a wealthy person takes their income in the form of capital gains or dividends, they don't pay the normal social security tax that we all pay on our normal incomes so some could say it's a tax loophole. that's also the way the law is set up. >> woodruff: he had a choice of how to do this? >> sure. i mean, he could have... the big debate on capitol hill now over interest and how hedge fund and private equity funds are taxed is that they use that lower tax rate to get around taxes. they could take taxes as, you

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know, at their regular salaries where they would be taxed much higher. >> woodruff: some of his investments were in overseas accounts, the cayman islands, some in europe. what's the significance of that? >> it's hard to tell exactly what he was doing. we can't say for sure sha he was... that he had accounts in the cayman islands and in switzerland in order to avoid taxes but by and large most people who have accounts in those countries are there to avoid taxes. >> woodruff: jeanne cummings let's talk about what we know from newt gingrich. he released his tax returns several years worth. what did we learn? >> we learned that gingrich is paying roughly about where a relatively wealthy person in the country ought to be paying. he earned about $3 million, a little over that. he paid around the 30% bracket. which is is pretty much the norm. however, some questions were raised about the way that he structured his income and whether he had avoided paying some tax... some of the

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medicare tax because of the way he set up his corporation. >> woodruff: explain how that works. >> he is incorporated with what they call an s-corporation. it's done by people who are individual businesses, you know, private businesses. and the money that comes through... the bulk of his money was earned through his speeches, through his books, through his events. that $3 million went through this s-corporation. according to i.r.s. regulations, that corporation should compensate, say, the owner of the it in terms of salary at what is commensurate to the amount of work they did to create the income. they paid him a salary of $252,000. so much lower. >> woodruff: much lower meaning he was able to not pay or avoid paying the medicare taxes that would have otherwise.... >> yes because he also received $2.5 million in

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earnings through the corporation. that was not taxed. exposed to the medicare system. >> woodruff: what about this controversial contract with freddie mac, $1.6 million. he released for the year 2006. what did he do for freddie mac? >> well, according to people who work there now and people who worked there at the time that the speaker was under contract, his job there was to help develop a message that they could, freddie mac, could then take to capitol hill that would be persuasive to conservative republicans who really wanted to crack down on freddie mac and fannie mae and impose... i'm sorry i said that wrong. and impose greater regulations upon them. they also look to him to help identify republicans on capitol hill who might be open to that kind of argument. >> woodruff: how is that different from being a lobbyist? we've heard mitt romney accuse gingrich of being a lobbyist. he said whether you call yourself that or not. what's difference? >> the definition of a lobbyist is actually quite narrow.

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keep in mind it was written by members of congress who hope some day to leave the hill and get a great job on k-street making a lot of money. they wrote this definition. it requires that a person have a paid client, make two contacts on capitol hill and spend 20% of their time on that client in a three-month period. you know, that's basically someone who is just going constantly as a lobbyist. so it's a great big loophole that people can go through and not register as a lobbyist. >> woodruff: how common is what newt gingrich did or has done among former members of congress? >> it's certainly fairly common. we have democrats like the former senate leader tom daschle who is not registered and yet has advised health care companies in similar ways. former senate leader trent lot, republican of mississippi. >> woodruff: to you both. are there calls today for more information from these two,

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more tax returns from mitt romney? >> so far there haven't been a ton of calls. i would expect there would be. and certainly if not in the republican primary, then once he faces off against barack obama if he is indeed mitt romney becomes the nominee they're going to ask for more tax returns. >> this with the speaker is not over yet. he worked for them for five years. he released a one-year contract. there's a lot of material we don't know. we talked to his people today. they say they're looking for additional records, but there are many... many questions are left unanswered. >> woodruff: thank you both very much. >> ifill: to preview the big speech we >> ifill: for more on the tax issue and to preview the big speech, we turn to "new york times" columnist david brooks and "washington post" columnist ruth marcus. david brooks, how did this become, this republican debate be about relative wealth? how did that happen? >> the party is actually going the other way. one of the odd things about the south carolina republican electorate is going down

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market. the number of college grads was lower than this time four years ago. it's a working class party. they have two normal working class candidates. and so it's thrust up. i personally don't think it's going to have a big political effect. i think a lot of americans assume that the people who run for president are super rich and if it's a choice between the lobby i haves and the bain capital guy, neither is joe six pack exactly. right now they're looking for the most assertive manly man. right now that's newt gingrich. >> ifill: that goes right to you, ruth. >> yes. manly man or whatever. i think i disagree that it's not going to have an impact. first of all, in this race, yes, people are looking for anger but they're also looking for authenticity. what you have here is the battle of the inauthentic. i wasn't a lobbyist but i had to hire a lawyer to tell me exactly the difference between being a lobbyist and saying on the right side of that.

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nobody buys that. >> ifill: that's what newt gingrich said. >> nobody buys that. he may not have technically triggered the requirement to lobby, but he was a strategic advisor/lobbyist. that's why he was getting the big bucks, not as a historian. i think that turns people off. it undercuts his "i'm the outsider. i'm the insurgent. i'm not of washington" message. i think the same thing for governor romney. it is very difficult for the down market guy in south carolina or any place else going forward. imagine he's going to have great wealth. but 40 something million dollars in two years? and then just not paying the same amount of taxes on it that other people do? it might be legal but it doesn't feel fair. >> ifill: to the other side of the aisle. the president has his big stage. among other things they've released early excerpts the president plans to say that i intend to fight obstruction

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with action. that doesn't sound like the kind of thing that will get him a whole lot of applause on the republican side of the aisle. >> we understand he will propose a moderate agenda. the two questions to ask: first the thing that strikes me just on what we know they've been working on, it's less cyclical this time, more about the structural elements of the economy and the president believes that the middle class is under big threat. he wants to do big structural things or least structural things. let me withdraw the word big. the second thing and this is what i think people should register as they're watching the speech is going to describe pretty big problems with the economy. wage stagnation, outsourcing, high unemployment. are the programs he's producing big enough to counteract the problems he's describing. that's going to be a question. >> ifill: as he walked out tonight in the middle of an atmosphere of pretty divide in washington but also on the campaign trail, what does he have to do tonight or does it matter? the state of the union people

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that people forget. >> what i loved was the prebuttal from governor romney that was a terrible divisive attack on fairness and everything. more class warfare. i think he spoke before the excerpts. look, every state of the union is really kind of... as far as i'm concerned they're all mish-mashs. budgets being dead on arrival. when you have a divided congress and a president running for re-election, he can be guaranteed that everything he proposes is going to be dead on arrival. so what i look at this to see is really the sense in which it's going to be his argument not to people who are sitting there because one set of them agrees with him. one set disagrees with him. his argument to the american people not cast as a campaign speech but trying to convey to them the vision that he has for what he would do in a second term if they give him the job again. >> ifill: but how do you walk into a joint session of

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congress when most of the country thinks we're headed in the wrong direction and say the state of the union is strong? >> well, we've heard it before. it could have been worse. i guess he'll say that. i do think the scope of people's anxiety, when you go around to these campaigns and i think it's true of democrats too. are you worried about your kids? every hand raises up. every hand. you have to have a big agenda. you may not like the republican agenda but the stuff romney and gingrich and santorum are talking about is pretty big. turning medicare into a voucher program. we're scrapping the whole tax code. that's pretty big. i think the president really needs to be upscale, different but upscale with what they're offering. i'm not sure within the administration as they think about the next four years, i'm sure they've come up with those policies yet. i think that is sort of an intellectual concern. >> ifill: i wonder how you can be upscale, whatever upscale is, when you have been consistency turned away on the things that you fought for including taxing the wealthy, other fights that the

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president has fought and lost this year. >> this goes to david's point about the lack of cyclical proposals that he expects. that means there's not a lot of money to spend now to try to right the economy. people have sort of been there, done that, it ain't going to happen so why propose it? but i would go back and say, yes, governor room knee, speaker gingrich and others are proposing big things. i'm not sure they're big things that exactly speak to the anxieties that people have. they're big new tax cuts that would fall primarily to the wealthy. you have me sort of ginned up there. there is no magic silver bullet solution to the woes for the country that the president sees. so you're going to see some kinds of smaller things, more talk about infrastructure more talk about help for people to obtain education and get college degrees, things like that. making the tax code fairer. it's not going to be the sort of, hey, honey, did you hear him say that kind of

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speechness arl. >> ifill: we'll be watching it together tonight. david brooks, ruth marcus, see you later tonight as you join us for our special coverage. >> woodruff: the presidential election in russia is just six weeks away, with prime minister vladimir putin attempting to return in another presidential stint. but opposition to his bid is growing. jonathan rugman of independent television news has this report. >> reporter: in the past few weeks russia's been royaled by the biggest street protests in 20 years. for most of that time, this vast country has been run by vladimir putin, a former kgb spy who now stands accused of rigging last month's elections. to stay in power even longer. videos emerged of votes stuffed into boxes long before the polls even opened. this woman was filmed voting dozens of times, and officials

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record on camera busily trying to change the election results. "mr. putin's hometown is st. petersburg where the mood is turning against him. "give power to the people," they chanted last month. others never had the chance to be heard. the 1917 revolution began here. so could this be the launch pad for russia's version of the arab spring? channel 4 news has been given access to three groups in the vanguard of anti-putin protest. these are the most notorious and secretive of st. peter burg's revolutionaries. they're currently in hiding and there's an international warrant out for their arrest. their name means war. on new year's eve they set fire to a police transportor. claiming this was their gift for all political prisoners.

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they've turned over police cars in protest. the aim here, they say, is to create works of art which humiliate the authorities and inspire dissent. here they soldered and screwed shut the doors of a restaurant owned by a putin supporter. the three ring leaders live by stealing food and clothing. and they're constantly on the lookout for the police. they keep their home address secret. it's so run down that they have no piped hot water. two of them were in prison for three months last year until the graffiti artist posted 80 thousand pounds bail. they're bringing up a two-year-old child here. even he has to sleep in a

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cardboard box to keep warm. putin they believe will stay cozy in his position of absolute power unless they escalate know protest. >> i don't believe in peaceful protest because i don't believe peaceful protest is possible in russia. if you just use legal methods, like the organizers of the big demonstrations proposed, then you won't be able to stand up to the state. >> reporter: andre is trying to protest legally in russia's second city. he's a bol she have i can revolutionary, an admirer of joseph stalin. he wants to return rush a to a soviet-style economy. he and his fellow comrades meet in this cafe every month. they're now riding the wave of

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putin's growing unpopularity for all its worth. >> we have reached a critical mass, and the most dangerous thing for those in power and what will bury them is that this is a mass of educated and urban people. this regime will be destroyed, and we will get a completely different political situation in the country. >> reporter: andre's flat in the suburbs has been raided by police who have ordered him not to leave the city. his party has been ban, and he faces three years in jail if found guilty of promoting extremism. he says that putin, once seen as russia's strong man, is now its tyrannyal czar and if he rigs presidential elections in march he will face a russian version of the arab spring. >> i think his desire to reign will not lead to any good. there will be a very powerful civil protest in march, more than in december. this is a chance to change the

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fate of the country. >> reporter: this man describes himself as an anarchist. he's been on hunger strike for the past 15 days in a police cell. last month he was arrested at this demonstration against election fraud. it was nonviolent. even hapless photographers were whisked away by police. and felipe was detained for 15 days. today that sentence supposedly ends, but instead of freeing him police have taken him back to court. a fortnight on hunger strike has disoriented him and he hasn't been told what the latest charge against him is. >> i was arrested at a

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demonstration against vote rigging. and i was sentenced to 15 days at the police cell. after i was released they brought me here obviously to fabricate another case against me. >> reporter: the judge sentences felipe to another 15 days. it turns out his crime is swearing in public which is illegal. but felipe's friends say it is often used as a pretext for jailing critics of putin's rule. 15 days for swearing may be revenge for this. last year activists occupied the aurora, the cruiser which fired the first shots of the russian revolution and one of the soviet union's holiest relics. they unfurled the jolly roger from the mast and claimed that crooks had taken over russia. and while felipe wasn't on board, he was certainly there. today is the beginning of a

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revolution, and we will be victorious, he said on local tv. before fights broke out as police dragged demonstrators away. so what unites these russian revolutionaries? well, it's not really a belief in western style democracy, more a burning desire for change. >> ifill: a surprising outcome. the gunning down of 24 civilians in haditha iraq in 2005. late today a military judge recommended 90 days confinement and reduction in rank to the remaining marine charged. but because of a pretrial agreement, he'll serve no time. margaret warner has the story. >> warner: it was one of the worst attacks on civilians by u.s. troops of the entire iraq war.

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blood-soaked rooms, scattered bullet casings, and piles of bodies littered the scene in haditha 140 miles northwest of baghdad in november, 2005. survivors accused u.s. marines of carrying out a massacre. >> the americans knocked at the door. my father went to open it. they shot him dead from behind the door and then they shot him again after they opened the door. then comes one american soldier and shot at us all. i pretended to be dead. >> warner: it had begun with a roadside bomb that killed marine lance corporal miguel. his death was noted on the newshour's honor roll. military investigators concluded his squad went on a rampage of revenge, killing 24 iraqi civilians including three women and seven children. four enlisted marines were charged with manslaughter and other crimes. four officers were charged with a cover-up. defense lawyers argued the marines believed they were in hostile territory and acted properly.

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ultimately charges were dropped against six of them and a 7th was acquitted. yesterday squad leader staff sergeant frank wuterich's court martial was cut short. he pled guilty to dereliction of duty admitting he had given orders to shoot first and ask questions later. prosecutors dropped the more serious charges of involuntary manslaughter and aggravated assault. conviction on those could have sent him to prison for life. the plea deal opened old wounds in haditha today. this man survived the attack but his bullet scar is still visible. >> i was expecting that the american judiciary would sentence this person to life in prison and that he would appear and confess in front of the whole world that he committed this crime so that america could show itself as democratic and fair. >> warner: wuterich could also face a separate discharge hearing. at his sentencing hearing today wuterich expressed sorrow to the victims and said he hadn't meant for his men to

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kill innocent civilians. for more, we turn to two former marines. retired lieutenant colonel gary solis was a lawyer in the marine corps and now teaches at both georgetown and george washington university law schools. and retired captain bing west, on active duty during the vietnam war, later served as assistant secretary of defense during the reagan administration. welcome to you both. the reason i made that comment about likely sentences, this still has to go up one administrative level if i understand it. colonel solis, here you had 24 iraqi civilians killed. all these cases went on and on and basically no one served any time. what is your assessment of this judgment today? >> this is a pathetic conclusion to an outrageously inept prosecution for a horrific act. no one can be pleased by the outcome. certainly the united states ends up looking terrible. not to mention 24 dead bodies

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and no time anywhere in the process. >> warner: professor west, what is your assessment of this? >> after seven years, it was time for the legal trials to come to an end. this was an absolute tragedy. but the problem when you're on the battlefield is that there's so much chaos that trying later to determine and assess blame year after year is extraordinarily complicated. i think the marines did the right thing in starting at the top. they didn't start with the sergeant. they started all the way up with the general and the regimental commander and issued letters of censure, changed the rules of engagement. when you finally get down to the marines who were on scene and when they lost one of their own and they believed that they were in hostile territory for good reason, then you're going to be in the

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chaos of battle. i think it's very, very difficult for those of us who aren't in that chaos to render a judgment seven years later. >> warner: mr. solis. >> i agree with bing who is an old acquaintance and friend. but like him i was in vietnam. i wasn't a lawyer then. we tried many, many cases involving the murder of vietnamese non-combatants and got convictions. we tried them both in vietnam and in the united states. it can be done and should have been done. after all there were four investigations here. the ncsi investigation alone ran 3500 pages. >> warner: let me just ask you because you followed the case very closely. how do you explain that they finally get this man to trial and then halfway through the trial they suddenly call a halt and negotiate a plea. what happened? >> the government had a weak case going in. they knew it. when they called their prosecution witnesses, the witnesses turned out to be more favorable to the defense than to the government. >> warner: how so?

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>> well, after.... >> warner: just one example. >> one example would be lieutenant calup who was on the scene and granted immunity initially. he testified for the government, but he said that he thought that the marines had taken down the houses in a correct way in conformance with their rules of engagement. that's not the kind of testimony that the prosecution was going to want. >> warner: why didn't the prosecution know this going in? why take it to trial? i mean they've had six years to prepare this? >> good question. i can't account for that. obviously before you take somebody in, put somebody on the stand, you preview their testimony. they should have known what was going to happen. >> warner: bing west, go back to the point that gary solis made just before. in vietnam, you certainly had the fog and smoke of war there. yet men were prosecuted and successfully so for slaying civilians. >> absolutely.

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i think that makes the point that i want to make with gary. gary used the word "murder." as i looked at this and i was with this unit in fluj i can't where they were fighting house to house, then they were sent to haditha. i went to haditha. i went to the houses where these killings occurred. it's extraordinarily difficult for me to believe that in any way these marines had the intention before the fight of killing civilians. whereas many times we did on occasions in vee vietnam when that was the case. i think this was absolutely poor leadership. bad orders. leading to a terrible tragedy. but it wasn't like they were calculating this ahead of time. >> warner: to be fair, they weren't actually charged with murder. they were charged with manslaughter. they weren't charged with having an intent in advance. in our remaining time, gary solis, let me ask you to pick up on a point that bing west made about rules of engagement.

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when this sergeant wuterich said he had admitted he said shoot first and ask questions later but then said today he never meant to have them kill civilians. that sounds pretty confusing. were the rules of engagement different than they were now and were they changed as a result of this? >> the rules of engagement is a term that is very loosely used and often they're not rules of engagement so much as they are instructions in how you'll proceed in combat. yes, the rules of engagement were changed to close possible loopholes and prevent possible recurrences of similar events. but i don't believe that the rules ofen... of engagement would have allowed the kind of conduct that obviously went on in haditha. as bing says they didn't go in, in advance, planning to kill people. but the fact is they did. they did kill people. >> warner: as i understand it, bing west, briefly, the rules of engagement were changed so now they have a more affirmative duty to decide

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whether civilians are combatants or non-combatants. >> absolutely. they've gotten so tough in afghanistan we have to be very careful that we haven't gotten too far with this and you have events where some of our own are killed. >> warner: what do you think of these new rules of engagement? >> i agree with bing. i think we may have gone too far. it's always a very close call. one does force protection turn into risks for civilian non-combatants? you can never purposely target civilians. >> warner: this is an ugly case that illustrates all those conflicts. gary solis and bing west, thank you both. >> warner: finally tonight, a new consumer watchdog overseeing many players in the financial industry went to capitol hill today and defended the obama administration's agenda to skeptical republicans.

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newshour economics correspondent paul solman has our update, part of his reporting on making sense of financial news. >> raise your right hand. >> weeks after his embattled recess appointment to head to consumer financial protection bureau, richard cordray appeared before a congressional oversight sub committee. president obama tapped cordray, the former ohio attorney general, last summer. but the nomination was stalled by the senate. republicans insisted the cfpd is too powerful and lacks oversight. republican patrick mchenry of north carolina who chaired today's hearing repeated that charge. >> the fact of the matter is the operations and authority of the cfpv still remain a mystery to congress and the american public. >> reporter: during questioning, mchenry pressed cordray to lay out the cfpb's agenda for the coming year. >> with these roughly 800 employees you have and a budget that's hundreds of millions of dollars, will you lay that out. >> i think our agenda has been

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pretty clear to everybody who has interacted with us from the chamber to consumer groups. i'm happy to have my staff work with you. if that seems to be a best practice that that's something that we could do. we're not intend to go hide the ball. i think our priorities are quite clear. we've stated them very clearly. >> reporter: critics have also challenged the legality of president obama's recess appointment of cordray. today though he faced tough but not uncordial questioning. new hampshire republican frank ginta. >> does it concern you that the process by which you were appointed has an impact on those very individuals or businesses or banks that you're going to be regulating. >> i understand that there's controversy that people have raised about the appointment. my intention here is i'm in a job, it's an important job, it's a big job that commands all mile time and attention. all i can do is try to carry out the responsibilities that the law of the land now has

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put on my back. and to try to do it in a way that is consistent with the values you articulated which i think are good ones for us: transparency and accountability snem democrat caroline maloney meanwhile tried to draw cordray out on republican resistance. >> i'm having difficulty understanding why people want to delay, stall, defang? do you have any idea why some people feel that way? >> i don't have a very informed perspective on that issue. i just know that i believe that the right thing for us to do is to go ahead and do our work. that's what we're going to do. >> reporter: california republican darrell issa asked cordray how his agency would carry on if his appointment is challenged in court. >> have you looked for ways that even if your appointment ceased to be valid that the work that you're overseeing would somehow have the ability to continue on because of some level of redeniedancy of

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authority? >> i do think the one thing that we could not do-- and i think it would be dereliction of duty-- is for me to say we're not going to go forward and do the things that the law of the land now tells us to do because i'm going to somehow act as though i was not appointed. that's not tenable. >> reporter: in the end, no fireworks today. next month, the house judiciary committee will hold its own hearing on the constitutionality of cordray as appointment. >> ifill: again, the major developments of the day. president obama made ready to address congress and the nation this evening on the state of the union. and in the republican presidential campaign, mitt romney released tax returns, hours after newt gingrich made public a contract with freddie mac. and to hari sreenivasan, for what's on the newshour online. hari? >> sreenivasan: we have much more special coverage of the state of the union on our web site. starting at 8:45 and continuing

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after the republican response, you can join a google plus hangout hosted by newshour political editor christina bellantoni. also, if you speak another language, we're looking for volunteers to help us translate the president's speech and the republican response into as many languages as possible. find details on our homepage. all that and more is on our web site, newshour.pbs.org. judy? >> woodruff: and that's the newshour for tonight. on wednesday, we'll look at the president's trip to key battleground states as he sells his economic plan. i'm judy woodruff. >> ifill: and i'm gwen ifill. we'll be back tonight at 9:00 p.m. eastern with full coverage of president obama's state of the union address. afterward we'll carry the republican response by indiana governor mitch daniels, plus the analysis of david brooks and ruth marcus. until then, 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:

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>> bnsf railway. >> and by the bill and melinda gates foundation. dedicated to the idea that all people deserve the chance to live a healthy, productive life. and with the ongoing support of these institutions and foundations. and... this program was made possible by the corporation for public broadcasting. and by contributions to your pbs station from viewers like you. thank you. captioning sponsored by macneil/lehrer productions captioned by media access group at wgbh access.wgbh.org

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