captioning sponsored by macneil/lehrer productions >> woodruff: first class letters will take longer to arrive, as the u.s. postal service announced $2 billion in cutbacks next year. good evening. i'm judy woodruff. >> ifill: and i'm gwen ifill. on the newshour tonight, we have a newsmaker interview with postmaster general patrick donahoe. >> woodruff: then, we update the state of play in the g.o.p. presidential race as former house speaker newt gingrich rises in the polls, less than a month ahead of the iowa caucuses. >> ifill: fred de sam lazaro reports on how multiple disasters have made it tougher for charities to raise money.

>> it's not so much about compassion fatigue. i think people are as come packsate today as they ever have been. for us it's actually more a belief fatigue. >> woodruff: jeffrey brown examines new proposals by european leaders to tackle the continent's debt crisis. >> ifill: and we look at the findings of a pro publica investigation into who gets presidential pardons, and who doesn't. >> woodruff: that's all ahead on tonight's newshour. major funding for the pbs newshour has been provided by: >> intelligent computing technology is making its way into everything from cars to retail signs to hospitals; creating new enriching experiences. through intel's philosophy of investing for the future, we're helping to bring these new capabilities to market. we're investing billions of dollars in r&d around the globe to help create the technologies that we hope will be the heart of tomorrow's innovations. i believe that by investing today in technological advances here at intel, we can make a better tomorrow.

>> and by 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. >> ifill: the u.s. postal service formally announced cuts in postal service today that will affect how millions send and receive mail, as soon as next spring. it was a bid to save money as the agency tries to reverse its increasingly desperate financial situation.

come next spring that first class letter will take a bit longer to get where it's going. almost half of the nation's mail processing centers-- 252 of them-- will be shut down. that, in turn, will virtually eliminate the chance that a stamped letter could arrive the next day. >> i think it's sad but i think it's a necessary cost- saving step from what i understand about the post office's finances. >> i'm probably a knee-and-er thal that i use it to pay my bills and things. i know in this day of the internet and e-transactions that the post office is perhaps a dinosaur. >> ifill: it's all part of a wide-ranging bid by the postal service to save $2 billion next year and $20 billion by 2015. post master general patrick don a hugh announced the cuts in washington today. >> american public pays the bills online. more than 50% do.

we can't sit back and wait for another five or six or ten years before we make these changes. >> ifill: david williams is vice president of network operations for the postal service. he says the agency has to respond to the steady drop in first class mail volume. >> the postal service, if it continues to lose 8.5, 10 billion, this year we're projecting a $14 billion loss, if we don't get legislative relief. so we have to do what's within our control to put the postal service on sound financial ground. >> ifill: the cuts outlined today do not need congressional approval, but others would. from reducing delivery to five days a week to cutting employee health care costs. the postal service also plans to close nearly 3700 local post offices. among them philadelphia's original ben franklin post office. franklin founded what has evolved into today's postal service in 1775. all told with the cuts

announced today plus those proposed, nearly 100,000 jobs are on the line. joining me now to discuss these changes is u.s. postmaster general, patrick donahoe. welcome to the program. we heard the vice president of the postal service today talk about excess capacity and that the closings of these service centers are about reducing capacity. could he define that for us. >> the way we sort mail today, gwen, is we've got 485, 487 to be exact facilities across the country. these facilities sort mail in a 24-hour time frame but re really only use them about 12 hours a today. what we're looking to do to save money-- well over $2 billion-- is to consolidate a substantial number. we're operating them on a 20- hour window. >> ifill: is that proposal... is that what is driving that excess capacity? is that what is driving this $14 billion projected loss you're talking about today? >> what's happened is this:

america's mailing habits have changed. as you can see we were talking today about the fact that in the year 2000, 5% of people paid bills online. today 60% pay bills online. when you combine that with the loss that we've seen in advertising mail as part of the recession, we've lost about 23% of our total volume. 27% of first class mail. first class mail pays the bills in our organization. so when you lose that much-- and we take no tax payer money-- we've got to do other things like consolidating facilities, reducing the number of routes we have out there in order to close that gap. >> ifill: when most people think of the post office they think of their local post office or they think of that blue box on the corner. they don't think about mail processing centers. what's the distinction for the average user of your service? >> well, we have a big network. we have a network that covers the entire country. as a matter of fact, it goes up to alaska, hawaii, puerto rico. we've got these large processing facilities, 487 of

them total. and then we've got another 2,000 post offices... 32,000 that receive mail every day from these facilities. our network works on a 24-hour basis. we ship mail around the country. what we're looking, since we've lost the volume, to try to squeeze down that network like any other responsible business would. >> ifill: but when i drop a piece of mail into a blue box, is it not going to get there now or is it not going to get there until next week now under these new cuts? >> it all depends. if you're mailing something in the northern virginia area going over to washington d.c., it would be a... in the blue mailbox, it would be two days. if you're mailing it from northern virginia to san francisco, it would be three days. right now we have an overnight service for the blue mailbox mail. that will be going away. we still will be delivering commercial first class overnight. people can bring their volume in to us, into our facilities by noon and they'd get delivery over a larger delivery territory. so there there be some

improvements in ser sis in that area. >> ifill: how much is the post office switching from a consumer, individual consumer service and into more of a corporate service for direct mail or for people who are sending magazines rather than for people who are sending cards in the mail at christmas time? >> probably about 75% of our business today is corporate. whether it's first class mail bills that you receive at your house or statements from a mutual fund, advertising mail and packages. the packages are growing. priority mail last year went up 5%. our portion of what you would call the e-commerce mail, the last mile that we deliver a lot of mail from fed-ex and u.p.s., that's grown 15%. so we have some areas that are growing. but we have areas that are shrinking due to people paying bills online. we just have to adjust. >> ifill: people who are sending holiday packages to grandma over the river and through the woods, are those packages get there? >> those packages will be fine. the more the merrier. we have a great priority mail network. we can deliver not only across

the united states, we do a great job mailing packages if you're sending them overseas to troops in iraq and afghanistan. >> ifill: there's been a lot of talk also in recent months about end six-day a week delivery basic wiping out saturday deliveries. is that part of this proposal? >> here's where we are from a postal service standpoint. we have got to reduce our operating expense by $20 billion. we're self-sufficient. our volumes are down. and when you look ahead, we see the volume continuing to drop off especially in first class mail. so we've got to plan to take $20 billion out of the expenses in the organization. employee retiree health benefits $5.5 billion. six-day to five-day delivery to keep the post offices open on saturday. that's worth $3 billion. i need congressional on those two things. i need congress to act and act quickly. that helps towards the $20 billion reduction that we need to put in place. >> ifill: the things you're announcing today things you can do without congress. >> things we're doing today.

we can do networks. we can do post offices. we can reduce the number of delivery routes out there. we also are in negotiations with some of our largest unions to work through to get better wage rates and a little bit more flexibility. these are all things that we can take care of ourselves like any other business, we'll do those. where i need the help is the with retireee health benefits and the six- to five-day. >> ifill: this is not the end of the cuts you're going to be making. there's another round from congress cooperates down the road. >> yes, we have got to do this to get ourselves back on good financial footing. when you look ahead the postal service will be a organization that delivers first class business mail, advertising mail and packages. we know that. we know what the the volumes look like pretty closely. we have to make sure we have the right infrastructure, an infrastructure we can afford to provide that service. >> ifill: what's the difference between where you are right now and bankruptcy? >> right now we have $15 billion in debt.

we theoretically owe about $5 billion more for the retireee health benefits. we do not have the money to make that payment. if we were a private firm, we would be bankrupt. the government has given us a pass on that right now pending resolving this legislation. if we can get our finances in order from a cost standpoint plus we're also owed back about $11 bill kron in overpayments into one of our retirement funds, that will put us on pretty good financial footing. >> ifill: u.s. post master general thomas donahue, thank you so much for joining us. >> thank you, gwen. >> woodruff: still to come on the newshour, the republican hopefuls; the challenges for charitable organizations; europe's new treaty; plus, an analysis of presidential pardons. but first, the other news of the day. here's kwame holman. >> holman: wall street began the week with new gains, on new hopes for progress on the europe debt problem. major bank stocks were among the day's biggest winners. overall, the dow jones industrial average added 78

points to close near 12,098. the nasdaq rose nearly 29 points to close at 2655. senate democrats have offered a new plan to extend the payroll tax cut, due to expire at the end of december. majority leader harry reid unveiled a smaller package today, financed with spending cuts and a scaled-back surtax on the wealthy. last week, democrats and republicans in the senate blocked each other's proposals. at the white house today, president obama pressed republicans again to agree to a plan. now is not the time to slam on the brakes. now is the time to step on the gas. now is the time to keep growing the economy, to keep creating jobs, to keep giving working americans the boost that they need. now is the time to make a real difference in the lives of people who sent us here. let's get to work. >> holman: democrats say letting the payroll tax cut expire would cost the average family about $1,000 a year. but a number of republicans question whether the tax cut actually has done any good.

arizona senator jon kyl spoke for them today. >> there's no evidence that this temporary tax cut has actually produced any new jobs which is the whole idea. in fact, our economy has decelerated. in 2010 we had a 2.8% g.d.p. growth. we're now down to just over 1%. >> holman: on another point, a spokesman for house speaker john boehner argued again today that a surtax on higher incomes would hurt small businesses and kill jobs. the senate is expected to vote on the new version of the payroll tax extension later this week. a series of bombings in iraq today killed at least 32 people and wounded nearly 100 others. the attacks struck shiite pilgrims as they traveled across the country for the observance of ashura. it commemorates the split between shia and sunni islam. the latest violence comes as u.s. forces pack up to leave the country by year's end. the u.s. and scores of other

nations pledged today to continue supporting afghanistan after most foreign forces leave in 2014. the commitments came at a conference in bonn, germany. afghan president hamid karzai said his country will need financial support for at least another decade after the troops leave. pakistan boycotted the conference, protesting a nato air strike last month that killed 24 pakistani soldiers. about 10,000 russians protested in moscow this evening, over sunday's parliamentary elections. they charged the voting was rigged to favor prime minister vladimir putin and his united russia party. official results showed united russia took about half the vote. observers had predicted a much percentage. the ruling party got 64% of the vote in the last elections. russian president dimitri medvedev defended sunday's results.

>> no doubt, the election was fundamentally different from anything we have ever had for a variety of reasons. i can share my impressions. united russia got exactly as many votes as it has supporters, not more, not less. thus the election was absolutely fair and democratic. >> holman: the most vocal russian opposition groups were barred from the elections. european observers criticized the conduct of the voting. u.s. secretary of state hillary clinton said she had "serious concerns" as well. in egypt, runoff elections for parliament were held today, but turnout appeared to be down sharply from last week's initial round of voting. the muslim brotherhood garnered nearly 37% of the votes last week, followed by a harder-line islamist party, with 24%. those are some of the day's major stories. now, back to judy. >> woodruff: with the iowa republican presidential caucuses less than a month away, two new polls show there's a new favorite for the first-in-the- nation nominating contest. former house speaker newt gingrich has now surged to the

lead among likely republican caucus goers in iowa. the fifth candidate to take the top spot there in the course of five months. two polls released over the weekend confirm his new front- runner status. on saturday, the des moines register poll found gingrich was 25%. texas congressman ron paul was second at 18% followed by former massachusetts governor mitt romney at 16%. the nbc news survey released on sunday also had gingrich in the lead but with romney in second and paul just a point behind. seizing on the mow men actual, the gingrich campaign today released its first television ad in iowa. >> some people say the america we know and love is a thing of the past. i don't believe that. because working together, i know we can rebuild america. >> woodruff: the candidate himself sounded upbeat as reporters shouted questions to him during a trip today to new

york city. >> what do you think of the new poll? >> good. >> can you beat obama? >> yes. >> woodruff: gingrich was in new york to meet with real estate mogul donald trump who plans to host a republican debate in iowa later this month. some of the new support for gingrich in iowa came from herman cain who quit the race on saturday amid allegations of sexual harassment and an extra marital affair. >> i am suspending my presidential campaign because of the continued distraction, the continued hurt caused on me and my family. >> woodruff: the gingrich rise has also come at the expense of romney whose lead in the first primary state, new hampshire, has been cut in half. until now romney had mainly avoided criticizing his republican rivals, but he went

after gingrich last week on fox news. >> he spent his last 0 or 40 years in washington. i spent my career in the private sector. i think that's what the country needs right now. >> woodruff: for all of the candidates the calendar is increasingly critical. iowa votes on january 3 followed one week later by the new hampshire primary. >> woodruff: for more on these early state poll results, we are joined by j. ann selzer, president of selzer & company, an iowa-based firm that conducted the latest "des moines register" poll. and dan balz, national political correspondent for the "washington post," who is also in iowa this evening. great to have you both with us. >> thank you, judy. >> nice to be here, judy. >> woodruff: ann selzer, let me start with you. first of all, whom did you poll and how much of an improvement does this represent for newt gingrich? >> well, we polled likely republican caucus goers, that is, starting with people who are registered republican or independent and then if you say you will definitely or

probably go to the caucus, you qualify for our poll. what it did for newt gingrich was basically we saw triple the support that he had in just october in the last des moines register iowa poll. >> you asked voters a number of questions about how they see these candidates. what did you find about gingrich? >> you know, he soars above the others on three things. one is that he's perceived as being the most experienced. he's perceived as having the most knowledge of the world and he's perceived as being the best debater. that's by at least half of these caucus goers. he's also seen as being able to bring republicans and democrats together to create real change and to bring the economy under control. those were all things that are nice to have in your arrow quiver. >> woodruff: dan balz, you've been watching newt gingrich not just this year but for many years before now. how do you explain what's happened with his campaign?

>> judy, i think it's two things. one certainly it's the debates that the republicans have gone through. if you talk to people here in iowa and as well as nationally, people who have watched these debates really think he has done very, very well. he's clearly helped himself through those debates. it's been the one way for a low-funded campaign, which his has been up to now, to get a message out and show people what he's all about. but the second factor obviously is the decline and sort of the ups and downs that other candidates have gone through. he has benefited most recently from the decline of herman cain but earlier rick perry. i mean other people have gone up and down. he's been kind of the last person standing as the non-romney candidate in the race. >> woodruff: dan balz, if he is to avoid the fate of those others-- what is it four frontrunners in iowa before him-- what does he need to do, what does he need to focus on? >> well, the first thing he has to do obviously is not make mistakes. in one way or another all of the other candidates were done in by their mistakes.

he has a history of...-- we've watched him for many many years-- he has a history of doing things that do himself damage. i think he's well aware of that. he's tried to run a displained campaign in this case. but that is always a problem for newt gingrich in any campaign he's running. the second thing he has to do particularly in a state like this is capitalize on his popularity and turn that into kind of the organizational muscle that's important to be able to bring voters out for these caucuses. >> woodruff: ann selzer, in looking at your polls, do you see room for him to do that? based on what voters said about the other candidates? >> well, i think he faces definite challenges from both ron paul and from mitt romney. on the ron paul side, he's known to have the strongest statewide organization in terms of supporters lined up, committed to him to come out to caucus for him. you just can't underestimate the ground work of an

organization of being able to turn out a high percentage of their supporters. romney, even though he fell in our poll, is still perceived as the most elect a.m. he's still perceived as the most presidential. and he's taken the mantle from herman cain as being the most likable. so he still has some things going for him in his favor. if newt gingrich wants to be president, he needs to be perceived as presidential. >> woodruff: and anything significant in the findings about the candidates we haven't mentioned yet, michele bachmann, rick santorum, jon huntsman? >> those three candidates show basically no movement in our poll. they poll in the low single digits, maybe high single digits. they've not broken through since michele bachmann's big start out of the starting gate in june. santorum has spent a lot of time in this state, visited 99 county. it doesn't appear that the people who come to see him like him all that much. huntsman has decided to opt

out of iowa. we know very little about him. and herman cain, we finished in the field just before he announced he was getting out but we saw his numbers make a precipitous decline during the days he in the field. it seems as though the people who thought he would be a good president maybe that was a good class president rather than a national president. >> woodruff: dan balz, what else is known? i left out rick perry but what else is known about the effort that these other candidates are making and to what extent there's fertile ground there either for gingrich to continue to rise or for somebody else to come up and overtake him? >> well, judy, given everything that we've seen so far, i think anybody would be foolish to say they have a clear idea of exactly how this is going to play out. i mean, we've been could consistently surprised to say that somebody is truly out of the race is probably always going to be premature until we begin to hear from voters. i talked to governor haley barbour from mississippi last

week and asked him, do you think this is now a two-person race for the republican nomination between gingrich and romney? he said, no, i would not say that. he said, i would not rule out the possibility that rick perry comes back. now governor perry has spent a considerable amount of money advertising in this state, more than anybody else. it has not helped him. he is still well down in these recent polls. so i think for governor perry, he's got to get out of this state and do what his campaign people think he's good at which is retail campaigning. but, you know, four weeks is a long time in iowa. iowa voters, i suspect, are not at all firmly decided. the history of these caucuses is if somebody is really hot late, they can get real mow men... momentum in the last ten days and show movement. we may have a surprise or two ahead. the fact that gingrich has risen at this late stage is very beneficial to him. >> woodruff: along those lines, ann selzer, i was reading that

you found 60% of the people that you interviewed said they could still change their minds. >> you know, judy, we followed up that question in this poll because people keep saying it must be chaos in iowa. these people aren't deciding. is there really a reason why. they could answer yes to all three reasons we offered. one was that, gee, i'm fearful there will be a revelation about a candidate i support. so i don't want to lock in. that gets about 25%. another was, you know, i'm concerned, i know something already about this candidate. i'm fearful that will become a problem. that's kind of in the high teens. the third option we offered was, you always sort of wait until the last moment to lock in. 92% said that's the reason why they're saying they could still be persuaded. gosh, during our final polls right before caucus day we still see significant changes in who becomes the leader and a presumed leader who falls to fourth place. things do happen very late in iowa.

>> woodruff: we will be watching right up until january 3 when they vote. ann selzer,an d balz, we thank you both. >> thank you. >> thanks, judy. >> ifill: next, too many crises, too little money. special correspondent fred de sam lazaro reports on efforts by private aid organizations to keep the charity flowing. a version of this story aired on the pbs program "religion and ethics newsweekly." >> it's been a relentless run of disasters around the world lately. earthquakes in japan. haiti and chile. tornadoes in the u.s. floods in pakistan, australia, and china. for relief organizations it's been a challenge to keep up. mike lloyd who heads a minnesota group called kids against hunger says some disasters bring immediate

responses. >> when the earthquake struck in haiti there was a tremendous outpouring for that event. it went on for several months where groups all over the country wanted to pack meals. it was a real scramble for us to meet that demand. donor dollars followed the demand for packaging the meals. when the tornado happened in joplin, we had a similar experience. >> reporter: each year kids against hunger volunteers have packed some 50 million ready-to- mix meals to be sent to needy regions around the world but lloyd says not all disasters are created equal in donors' minds. the famine and fighting in somalia and other countries in the horn of africa that have displaced hundreds of thousands into refugee camps has been more of a challenge. >> situations like we see in the horn of africa are long- term. they're political. they're at least partly political. they're, you know, they're somewhat related to the drought situation but it's been a long-term political

struggle in those areas. that's just not... has not excited the packers and the donors in the same way. >> it's not so much about compassion fatigue. i think people are as compassionate today as they ever have been. for us, it's actually more a belief fatigue. >> reporter: daniel wordsworth says many people are reflexively wary of some countries. wordsworth heads another minneapolis-based aid agency: a.r.c. it also saw a huge response to the haiti earthquake but support for pakistan, hit by massive floods a few months later, was far weaker. wordsworth says at first there was also indifference to the horn of africa. >> i think what we see in both pakistan and we're seeing it very strongly in somalia is that-- and it really is almost confronting to us-- is the lack of belief that people have for that country. it's not that they don't feel compassionate.

it's that they just can't make the connection. they don't believe that either change is possible there or that their money or their resources, what they give will actually translate into something on the ground. that's the crisis we see. >> reporter: he says it's the deeds of one percent of the population that have given pakistan and somalia reputations as hostile terrorist havens. so in its fund-raising campaigns for somalia, american refugee committee has tried to defang somalia's image, drawing heavily on the fact that the largest somali- american community is right in its home base in minneapolis. >> our doctors may be somali, our local business professionals somali. our taxi drivers somali. we actually get to meet the 99% on a regular basis. >> i'm a star. >> i'm a star. >> reporter: somali minnesotans, prominent and otherwise, have led a varied media campaign drawing in the larger local community. >> we hosted a charity dinner.

>> i'm a star because i donated money that i earned o cfrom >> i organized an art show. >> i collected for somalia. >> a whole different side of somali culture that people don't normally see. through that lens, you can see a die... dynamic and amazing group of people and your ability to believe that this country is full of people like this, there's huge hope for that country. >> reporter: is it work something. >> it's working really well for us. >> reporter: how do you know? >> actually, we are seeing the same outpouring of compassion that we saw for haiti. i think we will be one of the very few organizations in the world that can say that. we're tracking about the same. >> reporter: donors fall into two distinct categories according to mike lloyd. individuals who give small amounts and often volunteer their time, and large donors, individuals as well as corporations and foundations. he says grass roots campaigns and images of suffering are less effective with large donors than they are with the

individuals. >> those gifts are given from the heart. they really react to the emotional sense that they're making a difference in an individual's life. when we talk to corporate givers or large donors, their dollars are usually more intended or in their mind at least the things that are going to have lasting impact. so they're less likely to be driven by the emotional aspect of having an impact on an individual and what's going to happen with my dollars? are these going to really change anything or is it just going to be the same after the dollars are gone? >> a.r.c.'s wordsworth says smaller donations are also more likely to keep coming despite the economic downturn since people tend to be more sympathetic in tough times. corporate donors as well as well-heeled individuals need more convincing, he says. >> maybe it's a case that when you're investing a lot, it's like any investor. you know, you want to actually have a pretty strong argument made to you before you're willing to step forward. and so that group has been...

has taken more time. i'm not actually claiming at this point that we've had huge success with folks with deep pockets but again i know in the case of one individual, that actually what made the difference for him was sitting down with somali people here in the twin cities. actually again it was just that face-to-face interaction. >> reporter: despite the challenges american refugee committee says it has gotten some major corporate donations most likely because their corporate headquarters are nearby. >> groups like best buy, general mills, the mosaic company, health care insurance providers, because they've got somali stuff. they can see it more quickly. and then the rest of the stuff and the rest of the company comes around behind them and shows solidarity. >> reporter: it has used its donations to run a hospital in the somali capital mogadishu but there's always more to be done says this person who works in refugee camps along

ethiopia's border with somali for the group doctors without borders. >> it's important to point out that the emergency is not over. it's ongoing. we continue to see people coming, and these people are living here in the camps. and they are in great need of assistance. >> reporter: one of the biggest challenges is to keep attention focused on ongoing crises like that in the horn of africa. even as they recede from headlines or get buried by bigger headlines about a new disaster. >> ifill: fred's reporting is a partnership with the undertold stories project at st. mary's university in minnesota. >> woodruff: next, a critical meeting between europe's key leaders as pressure builds to resolve the continent's economic woes. we start with a report from gary gibbon of independent television news. >> reporter: after months of rising government debt crisis,

and the threat of others, there was a meeting in paris for the outline of a deal they now want the rest of europe to adopt. chancellor merckel and president sar cozy agreed that the debt limit should be enforced by pretty much automatic fines if the rules are broken. the fines could come to billions of euros. euro-zone countries would also have to write balanced budget rules into their own national laws. all that to be locked down in a treaty change. all 27 members of the e.u. may sign up for it, but the leaders of france and germany said the 17 euro-zone countries would do it all on their own if the others get difficult. >> did somebody doesn't want to go with us and can't keep up with us, we say the euro is so important to us that we'll go as 17 member states. >> we will see at a round table whether it is going to be agreed by 27 or 17.

our wish is to reestablish confidence in the euro and the euro-zone. >> reporter: both ruled out pooling debt with euro-zone partners. >> we are completely in agreement that euro-bonds are absolutely not a solution to the current crisis. what a strange idea it would be to pool all our debt. which basically means having france and germany paying for the debts of others without having any say in how much debt other countries take on. >> reporter: a flavor of the pain ahead came as italy's new welfare minister tried to describe pension cuts to come. italy's borrowing costs actually came down today helped but the franco-german proclamation that there would be no repetition of the managed greek default when private lenders lost billions they were owed by the greek government.

>> woofruff: late today, the standard and poor's ratings agency issued a warning that it might drop the credit rating for even the richest euro nations. jeffrey brown takes the story from there. >> brown: i'm joined by thomas kleine-brockhoff, senior director for strategy at the german marshall fund of the united states. he leads its eurofuture project, exploring the economic and political dimensions of the euro crisis. i want to start with a larger context here. as we look at a very important week. why do people say we may be at a turning point for the entire european union project? >> i think we are at a fork in the road. either we'll see that a virtuous or vicious cycle is being set off. the vicious cycle would result in defaults in depression into disintre gags and finally into decline or you set up a virtuous cycle in which market confidence can be restored in which reforms can be given time to work and in which a stronger europe can result. >> brown: the german and

french leaders think that they can try to start that virtuous cycle through new rules. but these new rules require nations to cede more of their sovereignty, no? >> yes. the idea is to complete the currency union with a fiscal union which they didn't do at the outset because in 1992, it was seen as politically impossible. but now we see the risk of that. they want to complete the project of a currency union with controls. that project is fraught with risk.... >> brown: still politically questionable. >> absolutely. i mean, everybody has to agree to it. that's why they said we wish for it to be at the level of the eu-27 but if 17 we'll need to go forward. >> brown: as a practical matter this deficit limit of 3% of g.d.p.. don't many countries violate that now including france? >> virtually all of them do. as a consequence of the

financial crisis of 2009 when the stimulus brought up the budgets. but the goal is to have it enforceable and to have a mechanism in place that prevents repetition of what we're seeing now. >> brown: now you have, as judy just said, the s&p stepping in with a kind of warning on the credit rating. that shows even more of the pressures, right? >> it is the increasing pressure in front... before the summit and the warning clearly says it's the governance structure. it's the role of the european central bank that are inhibited our outlook. >> brown: wouldn't changes of the kind that they're talking about today to the treaty take a long time to ratify and implement? and does anybody feel like there is that much time? >> well, today's deal only has different parts. one of it is the long-term fix that is the treaty change. don't repeat the mess that we're in now.

that's the message coming out of that. but there's also elements that should... that should satisfy the markets because they're short term emergency measures. and the most important one of it is pretty much a complete turn-around by the germans on private sector involvement. which they had insisted on in the greek bailout but it had resulted in investors fleeing southern european bonds. >> brown: private sectors means the lenders, the banks, et cetera. >> yeah. so the idea being that you would have to have those who contribute to it partake in it. but it also destabilizes the european bonds so today's announcement should help markets to have more trust but they actually do get their money back when they do invest in southern european bonds. >> brown: merckel and sar cozy, germany and france, can they essentially dictate such terms? is everyone expected to follow when they meet later in the

week? >> that leads to a problem here. >> brown: another set of problems. >> does more europe mean more of france and germany. the smaller countries say the european union is a body of 27 nations. now had merckel and sarkozy not stepped up, you would hear the other complaint which is where the leadership in this? there's a friction between leadership and practical crisis resolution mechanism that the two have now stepped up traditionally and the democracy principle within the european union. >> brown: very briefly, the u.s. interest here. are they playing a back seat role or pushing this forward? >> part of the... part of a deal would have to be an imf involvement. clearly the europeans don't have enough and haven't put up enough money so far to build a fire all with a around spain and italy. it would need the u.s., it would be need a u.s. involvement increasing the capital of the imf to allow that. so far unfortunately the

americans have said them don't want to be part of that. >> brown: thomas kleine-brockhoff, thank you very much. we'll watch to see what happens later in the week. >> thank you. >> ifill: we'll be back shortly >> ifill: we'll be back shortly with a look at what it takes to get a presidential pardon. but first, this is pledge week on pbs. this break allows your public television station to ask for you >> thank you for joining us. i'm paul anthony, here with patty kim. >> good to be here, paul. >> thank you for joining us this evening. when your day is filled with demands and distractions, isn't it comforting to sit down to the newshour? you know it will be calm, rational and informative. it's one hour of your day that's truly well spent. so during this brief intermission, we hope you will make an investment in the newshour -- and all the fine public affairs programs on weta. make a contribution that reflects what this news service is worth to you. it could be $50, $150 or $300 -- you choose the amount.

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that world-class journalism and the team that has the news judgment, energy and talent to bring you high-quality coverage every weeknight. if you have already called, thank you. each time you tune in, you'll see your donation hard at work. now back to "pbs newshour"." thanks again for your support. >> ifill: a new investigation into what it takes to get a presidential pardon reveals that politics still plays a role, and that whites are four times more likely than blacks and other minorities to have their records wiped clean. here to talk about her story is dafna linzer, senior reporter for pro publica, a nonprofit online news organization. tell us in a nutshell who benefits and who doesn't. >> we were very surprised at e results. white applicants as you said

are nearly four times as likely to get a pardon. hispanic applicants fared quite well when we looked at them as a group. but african-americans fared the worst among the group. applicants who were married had a better shot. in fact, there were two times as likely to get a pardon. this is a pardons office that is looking at all kinds of stability tests and seems to favor married applicants. what else did we look at? congressional support. if you had a member of congress in your corner, you were three times as likely to get a presidential pardon. >> ifill: presidential pardons typically often come at the end of a term. people at the end of the year come and say or make the case to the president. but often to other people. what's the process really like? >> we examined actually the recommendations that the pardons office inside the justice department offers to the white house. they offer periodically, as you said, presidential pardons

more at the end of the term. they pardon more around christmas. there's usually some thanksgiving pardons. president obama just pardoned five people. but most people now apply directly through this pardons office. that seems to be a result of the mark rich scandal that happened at the end of the clinton administration, that clinton had pardoned somebody who did not go through the regular justice department process. >> ifill: and was a big campaign donor, right. >> right. it ended up proving embarrassing for the president and for the white house and led to hearing on the hill about it. president bush and his legal add advisors. president bush was inaugurated just hours after that pardon was put through. they hoped to avoid that. they put all their kind of effort into the judgment of the pardons office and the justice department. and having examined those judgments, this is where we learn that whites are favored by a factor of four. >> ifill: and the last high- profile pardon or non-pardon in this case was scooter libby

under george w. bush's administration. he refused to pardon him. is is there a list? is there a check box that the judicial office, this justice department office uses in making its recommendations to the president? >> scooter was another example, scooter libby was a good example of somebody who didn't go through the pardons office. he never applied for a presidential pardon. this was a personal request from the vice president to president bush that was unsuccessful. though bush did commute libby's sentence so he never had to serve prison time. for that case you wouldn't have... you wouldn't have the pardons office making a judgment. we looked at all the objective factors that the pardons office tells applicants they consider. there's also, you know, numerous subjective factors that are not only hard to measure but really hard to know how they're applied because they seem to be applied differently for very different people. we found case after case of similar people with very similar criteria, nearly

identical crimes. you know, they looked good on paper. they were active in their churches. >> ifill: tell us the story about the woman in little rock, the two women in little rock arkansas. >> right. another perfect example. this is really remarkable because they were from the same city, lived near each other. both had committed tax violations. one woman who was african- american, a small business owner, owned her own salon, was accused of under reporting her income on i.r.s. filings over a course of four years. she fought it. before trial the government dropped three counts. she pled guilty to a single count of underreporting her income and paid a $3,000 fine, pretty minimal. the other woman and her husband were involved in a pretty large-scale tax fraud scheme to defraud the i.r.s. they filled out all kinds of false tax returns. they were looking to get close to $40,000. it back from the i.r.s. that they certainly didn't deserve.

she was convicted and got prison time. the african-american woman had a probationary sentence. they both pled guilty in court. active in their churches. the woman who was white was pardoned. the woman who was african- american was denied. >> ifill: i was just going to say assuming that this sort of things happens in part because of who you know, it happens because of how are the pardon officer was feeling that day, after the story came out, wrote two long pieces about this, was there an outcry of any kind or people who are saying this is not the way it should work that congress shouldn't be able to pressure people to pardon others when others never get the same attention? >> right. the congressional angle is really interesting. i'm waiting to hear a little bit more reaction from that today because it does create quite a disparity. congress sort of interfering in this one continues stougsally unfettered power of the president. the outcry i have to tell you i'm very, very interested.

i had wonderful cooperation and interviewed deputy attorneys general who served in five administrations. they were just stunned by the results and by the story. i think they were surprised at how they... how little they really kind of new about the process. >> ifill: thanks for all your good work. >> thank you, gwen. >> woodruff: again, the major developments of the day. the u.s. postal service announced $2 billion in cutbacks next year. the upshot is that first class letters will take longer to arrive. standard and poor's warned it might downgrade the credit rating for 15 of the 17 eurozone nations. hours earlier, the leaders of france and germany laid out plans to control the debt crisis. up to 10,000 russians protested in moscow against parliamentary election results. they charged the voting was rigged to favor prime minister vladimir putin and his united russia party.

and that's the newshour for tonight. on tuesday, we'll look at the congressional divide over the consumer protection agency. i'm judy woodruff. >> ifill: and i'm gwen ifill. 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: moving our economy for 160 ectss. us. intel.

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