The MacNeil/Lehrer NewsHour

MR. MacNeil: Good evening. Leading the news this Friday, President Reagan was subpoenaed to testify in the Oliver North trial. The latest government economic indicators show slower economic growth, an Iranian terrorist group again claimed responsibility for the Pan Am 103 bombing and made a new threat. We'll have details in our News Summary in a moment. Jim.

MR. LEHRER: After the News Summary, we look at the making of the Bush cabinet with conservative leader Richard Viguerie, Democratic Activist Eleanor Holmes Norton and Analyst Mark Shields and Kevin Phillips. Then Betty Ann Bowser reports from Harlingen, Texas, about a new kind of refugee problem. Sir Roy Denman of the European Community and Sen. Patrick Leahy disagree about the food fight between the United States and Europe, and we close with a report from Seattle about a new video game. NEWS SUMMARY

MR. LEHRER: President Reagan today received a subpoena to testify at the trial of his former aide, Oliver North. A Presidential spokesman said the subpoena was delivered to the Justice Department. North faces federal criminal charges for his role in the Iran Contra arms deal. His trial is scheduled to begin January 31st.

MR. MacNeil: There was new evidence today that the U.S. economy is slowing down. The government's gauge of future economic growth, the index of leading indicators, fell .2 percent in November, after rising .4 in October. A White House statement said the data continued to suggest a trend towards somewhat slower but continued economic growth and moderate inflation in the months ahead. The Commerce Department also reported that new home sales fell 8 percent last month, the sharpest monthly drop since May 1987. In other economic news, government regulators today announced the closing of 25 more failed savings & loan associations. They will push the total this year to 222. And the Canadian Senate today approved the free trade deal with the United States under which both countries will remove all trade barriers over 10 years. The agreement will thus go into effect as scheduled on January 1st. Jim.

MR. LEHRER: There was a new terrorist threat today related to the Pan Am jetliner tragedy. The Associated Press said its London office received a call from a person claiming to represent the guardians of the Islamic Revolution. The caller repeated the group's earlier claim that the Pan Am plane was bombed in retaliation for the U.S. downing of an Iranian airliner last July in the Persian Gulf. But then he said in broken English that unless the U.S. deports the son of the late Shah of Iran, "There will be another present in the new year for America.". United Press International said it received a similar call today. In Washington, State Department Spokeswoman Phyllis Oakley had this reaction to that threat.

PHYLLIS OAKLEY, State Department: We are aware of the reports about this warning and as various speakers have pointed out, we receive hundreds of potential threats. We've been over this subject a lot. The FAA, as you know, the intelligence community, law enforcement community, they all analyze these and determine what the appropriate measures are in response to the call or the tip or the threat or whatever you would want to call it and warnings are issued when they are appropriate, and as we've said before, we're not going to get into every one of these.

MR. LEHRER: The Times of London reported today that investigators now believe that the Pan Am bomb was set off by a two stage detonator system, a barometric device triggered by altitude, which activated an electronic timer which was set to explode the bomb one hour later. In Scotland, the nose and cockpit of the jetliner were moved today. Royal Air Force troops and helicopters were used to lift the wreckage and carry it from the crash site to a facility near London. Investigators there plan to examine it for further clues about the bomb. And in Washington, Federal Aviation Administration Head Allan McArtor said his agency is working on one more step to reduce the chances of airliner sabotage. He said a new computer card system is in the works that would prevent all non-authorized personnel from being around aircraft while they are being serviced.

MR. MacNeil: Israeli troops killed three Palestinians today. In one incident, soldiers searching for suspects in the Gaza strip fired on three men who tried to flee, killing two of them. Also in Gaza, troops opened fire on demonstrators, killing an 18 year old youth. Authorities ordered all West Bank schools closed for a week because of renewed violence and to forestall more unrest.

MR. LEHRER: Yugoslavia lost its government today. Prime Minister Branco McKulich and his entire 31 member cabinet resigned. The action followed the Parliament's refusal to adopt an economic law proposed by the government. It was the first mass cabinet resignation since the communists took over after World War II. McKulich was considered a hard liner, particularly in the handling of ethnic unrest in the country. The Associated Press said his quitting could clear the way for a more reform minded leadership.

MR. MacNeil: In Moscow, Yuri Cherbanov, son-in-law of the late Soviet leader Leonid Brezhnev, was sent to jail for taking bribes. We have a report from Louise Bates of Worldwide Television News.

CORRESPONDENT: The verdicts delivered to the Supreme Court underlined the Soviet Union's break with the past. Justice Mikhail Morov read out the guilty verdict and sentence. Cherbanov stood motionless throughout the 3 1/2 hour procedure. His crimes, large scale corruption, bribe taking, and abuse of office, could have met the death penalty. Instead, he got 12 years hard labor. It's a long way from the days when he was riding high as Brezhnev's son- in-law and a deputy interior minister.

MR. MacNeil: The sentence came a day after the Kremlin ordered that Brezhnev's name be removed from his former home and from all the schools and factories that bear it. The Brezhnev era has come under growing official attack as a period of stagnation and corruption.

MR. LEHRER: The federal government today moved to put bad doctors and dentists out of business. The Department of Health & Human Services awarded a $15.9 million contract to set up a data bank of information about doctors and dentists disciplined or sued for malpractice. The data would be made available to hospitals and state licensing boards. HHS Secretary Otis Bowen explained the need for the system at a Washington News Conference.

OTIS BOWE, Secretary Health & Human Services: When this data bank becomes operational during the coming year, no longer will adverse information be confined within a state or a proprietary setting unavailable to hospitals and others who need to know a health professional's record, and, therefore, no longer will incompetent health professionals be unable to move from hospital to hospital or from state to state while withholding adverse information on their professional competence.

MR. MacNeil: In Honolulu, former Philippines President Ferdinand Marcos was rushed to hospital overnight for the second time this month. The St. Francis Medical Center said the 71 year old Marcos was suffering from either heart failure or pneumonia. A Marcos supporter, Joe Lazo, said a priest had given the last rights. Doctors must soon decide whether Marcos is well enough to travel to New York to be arraigned on charges of stealing 103 million dollars from the Philippines Government.

MR. LEHRER: And that's it for the News Summary. Now it's on to the making of the Bush cabinet, a Central American refugee problem, an international food fight, and a new video game. FOCUS - CABINET MAKING

MR. LEHRER: We look first tonight at the men and women George Bush has chosen to help him rule. The President-elect has only one cabinet choice left to make, that of Energy Secretary. The 13 other top positions in his new government have been chosen and announced. Bush laid out his own text and test for the selections at a news conference the day after the election.

PRESIDENT-ELECT BUSH: [November 9, 1988] I'll be using a transition to assemble the very best possible team to meet the challenges that lie before us, while also doing what I can to help bring us together after this long and difficult campaign. As I said in the campaign, I will for the most part bring in a brand new team of people from across the country and in my view, that will reinvigorate the process. It will in no way reflect lack of, lack of confidence in those who have served President Reagan so well.

MR. LEHRER: We look now at how the final line-up matches those aspirations as well as others, political, philosophical and competency tests. A reminder of who the cabinet players are, four close friends of Bush, Jim Baker, Secretary of State; Nicholas Brady, Secretary of the Treasury; John Tower, Secretary of Defense; and Robert Mosbacher, Secretary of Commerce. Brady is a Reagan cabinet holdover. So are Richard Thornburgh as Attorney General and Lauro Cavazos as Education Secretary. Two other Reagan administration officials were given different Bush jobs. Trade Rep. Clayton Yeutter switched to Agriculture Secretary, former Transportation Secretary Elizabeth Dole to Labor Secretary. There are three from Congress, Jack Kemp, Secretary of Housing & Urban Development; Manuel Lujan, Secretary of Interior; Edwin Derwinski, Secretary of Veterans Affairs. A Chicago transit official, Samuel Skinner, was chosen Transportation Secretary. Dr. Lewis Sullivan of Atlanta, Secretary of Health & Human Services. He is the only black. Lujan and Cavazos add up to two Hispanics. Mrs. Dole is the only woman. Mosbacher Sullivan and Skinner are the only three with no previous Washington experience. Now to some overview reaction to and analysis of this Bush cabinet. It comes from Mark Shields, a syndicated columnist for the Washington Post and one half of our Gergen & Shields political analysis team, conservative commentator Kevin Phillips, editor of the American Political Report, Georgetown University Law Professor Eleanor Holmes Norton, 1988 campaign adviser to Jesse Jackson, former Head of the Equal Employment Opportunity Commission in the Carter administration, and conservative activist Richard Viguerie, chairman of a group known as the United Conservatives of America.

MR. LEHRER: Mr. Viguerie, what do you think of the Bush team?

RICHARD VIGUERIE, United Conservatives Of America: Discouraged, disappointed, and disillusioned. I can't say we were surprised, but Bush really did promise us a new administration with new faces. He ran on a conservative platform. He ran on conservative issues. He engaged the opposition, the Democrats, in a confrontational, liberal versus conservative battle in the campaign. When he had more of a moderate centrist campaign early in the year, he was 17 points down, began to take the conservative issues to the American people and campaign on them, and ran a strong campaign and won a strong victory. And now he has gone back to basically an administration similar to Ford, to Nixon. Conservatives kind of feel like Charlie Brown, always hopeful that Lucy won't pull that ball away from us at the last minute. But invariably, Bush follows the pattern of all the establishment precedents and turns his back on those people who gave him the nomination and the election.

MR. LEHRER: Eleanor Holmes Norton, what do you think of the cabinet?

ELEANOR HOLMES NORTON, Georgetown University: Well, I'm not real high on this cabinet, although I think it's getting decent grades largely by comparison to the campaign that Bush ran which led everybody to believe that he was a clone of Reagan and you have a bunch of ideologues that didn't know what they were doing in the government, so everybody's so grateful for that, they think this is fine, and measured against the Reagan administration frankly, where indeed ideological litmus tests were more important than the problem solving abilities that somebody ought to bring to the cabinet. I hold him of course to a higher standard than this. We're going into the 1990s and I think his cabinet is not diverse enough. We have the kind of cabinet we would have expected in the early 70's, perhaps mid 70's. It's got a token woman, it's got two Hispanics, the only breakthrough there. It's got a token black. I'm encouraged that they sound like they're people who believe that government is for doing what the mandates of their agencies say you do and not for taking those agencies apart, but I think that Bush's good reviews are unearned if you judge him against what we ought to expect of a President in this period in American life.

MR. LEHRER: Kevin Phillips, your report card, sir.

KEVIN PHILLIPS, American Political Report: Well, I think that I share some of the skepticism. I'm not certain that I share Richard's feeling that he's dealt the conservatives out. I think it is a bit of a second Ford administration, but my concern is a bit more specific to the lack of new people and new ideas. I think what we've got is a two-tier cabinet. At the top, we've got six jobs where the people involved are close to Bush, old friends from the establishment part of the power structure. Below that, we've got another six, seven or eight jobs, where the people are much more collateral to the President. He's putting an enormous I think pile of chips on an in group, this five, six, seven member group.

MR. LEHRER: Let's go through those. You're talking about Baker, Brady, Mosbacher, Tower --

MR. PHILLIPS: Exactly. Darman, I think to some extent you can put Thornburgh in that group. Basically what you're looking at are the people who deal with the top jobs, the senior cabinet positions, world affairs, key economic issues. All the rest of it is collateral. This is where the action is going to be and he's putting people in who have talent, who have a record, but who basically stand I think for more of the same. I think that's quite a gamble.

MR. LEHRER: Mark, your analysis, sir.

MARK SHIELDS, Washington Post: Jim, I think George Bush has had a terrific transition. He becomes the umpteenth President in a row to win his transition. This is the time when from after the election until the inaugural, when the American people see this man converted from just a candidate, some slime ball candidate out there hurling mud and charges and all sorts of accusations into a President. And we immediately discover in that new President-elect previously unnoted characteristics of intellect, judgment, decency, his family, a wonderful relationship, this deaf touch reaching out to all sorts of groups. And that's what we're seeing right now and if you don't like it, I don't know how you conclude that someone has a good cabinet until we see him in action. This is a great period. It's a little bit like a honeymoon and a marriage.

MR. LEHRER: This is the honeymoon or the marriage?

MR. SHIELDS: This is the honeymoon.

MR. LEHRER: This is the honeymoon.

MR. SHIELDS: Between election day and inaugural day until the problems begin. I think somebody said in 1968 of Richard Nixon's cabinet in Newsweek Magazine may be a disappointment to his supporters and at the same time it may be a pleasant surprise to his detractors, and I think that's what Bush's cabinet is.

MR. LEHRER: Let's take some of the points that have been made. Let's take Richard Viguerie's point that these folks, and you said it yourself too, Kevin Phillips, that these folks are basically out of the establishment. There are no new ideas people here. Do you agree with that, Eleanor?

MS. NORTON: Well, when you all accept that Kemp is a new ideas person. This cabinet is also --

MR. VIGUERIE: That's the exception. There are a couple of exceptions, but for the most part, they're going to be safe bureaucrats really, Jim. They are people who are at the very top level of their profession and they're going to be very very competent bureaucrats, no revolutionaries, not going to make any changes --

MR. LEHRER: What's wrong with being at the top --

RICHARD VIGUERIE, United Conservatives Of America: Well, except that as Reagan said when he ran for President, Jim, in 1976, it's this city, it's this old boy network here that Bush has drawn his people from that have brought us our problems of, you know, whether it's inflation, a deficit out of sight and high taxes, and all of the problems, by the people inside this Washington, D.C. community. Why not reach out to -- what's wrong with bringing people from St. Louis and Dallas and Osh Kosh? I mean, don't people have every bit as much talent and I think a lot more than the old boy network in Washington, D.C.?

MS. NORTON: Look, Richard, this is, not only -- this cabinet is really very politically balanced. I mean, we look at the origins of some of them. You know, he's got something for you in there. He's got something -- he's got perhaps more of who he was. In a real sense he's suffered perhaps, it seems, from the Hubert Humphrey syndrome where Hubert Humphrey suppressed himself all during the Johnson Presidency and everyone believes that had he won he would have become Hubert Humphrey again. Well, what has happened to George Bush as he has become George Bush again? While he was President Reagan's second man, he was slavish. What more can you ask of the man? Can you ask him to suppress himself as well when he becomes President of the United States? He's given you all something. He's not going to -- he isn't Ronald Reagan. He is out to prove that he was not after all a Reagan clone.

KEVIN PHILLIPS, American Political Report: Well, I think he's doing that, but what he's proving is that he's a Washington insider and that he's somebody who's going to take his basic clues from the establishment, and that's not necessarily bad for ideological reasons. But after you've had a party in power for eight years, I think you have to be very alert to the problems of stale thought processes, of not seeing things from the viewpoints the people out in the country do, and I think what he's pretty much said is continuity will do it, we're entirely on the right track. That bothers me a little bit because I don't think that's an attitude you want to put that much emphasis on at this stage.

MR. SHIELDS: I think Kevin's touched on something very important here. Politically it's a cabinet that third terms historically in American politics have been a disaster, third term in the same party, whether you've gone back to President Roosevelt in 1940, and -- World War II and that tragedy, his Presidency may have floundered at that point, to William Howard Taft in 1912. And I think that as one looks at this, it is running low on ideas but third terms always do. That's a different problem politically from the people he has chosen and whether, in fact, their zip code lies outside the beltway. I don't think that's really an indictment. I mean, there's nobody here you're going to impeach on the basis of lack of intellect or lack of integrity I don't think, is there, Richard?

MR. VIGUERIE: Well, what he's done, Mark, is after what, six, seven weeks of hard work, he's successfully united 10 percent of the Republican Party, the Harvard Yale Washington establishment - -

MR. LEHRER: Kemp doesn't fall out --

MR. SHIELDS: Kemp sure doesn't.

MR. VIGUERIE: Kemp is a notable exception and conservatives quite frankly feel almost like Eleanor was saying about tokenism. We love Jack Kemp but it almost looks like tokenism, because there's only Jack Kemp and John Sununu there, and --

MS. NORTON: He's a gate keeper.

MR. VIGUERIE: But conservatives --

MR. LEHRER: All right. You say you only have a token. You're saying that the blacks and the Hispanics and the women only have a token, so what is left?

MR. VIGUERIE: Harvard, Princeton, and Yale and the big business community.

MR. PHILLIPS: It's not entirely an exaggeration. I mean, I think we're getting a little bit of an excessive statement of it, but it's true that it was starting to look like a minority and the Bush era was somebody who went to a public school. I mean, it started out with a little bit of a Brooks Brothers overtone to it and I think --

MR. SHIELDS: Just a second -- a good case of Chardonner never heard anybody.

MR. LEHRER: Let me ask Mark a question though. Isn't it also true in American politics that when a person rises to a position finally to be him or herself that they always go to people they know and people they trust, so why would not he, why isn't George Bush allowed that luxury as well?

MR. SHIELDS: No, they usually do but George Bush certainly is allowed. We give any new President total latitude in the choice of his campaign. I mean, if he wants to bring in four out of work brothers-in-law, there really isn't much public resistance or clamor about it. Jack Kennedy -- and it's interesting -- it's impossible to predict who's going to be important or influential in this administration looking at it. Say Jim Baker --

MR. LEHRER: I was going to ask you about that.

MR. SHIELDS: Well, you say you look at Jim Baker, but who would have predicted at the outset of the Kennedy years that the dominant force in the cabinet other than Robert Kennedy certainly would be Bob McNamara, somebody who we didn't know. At the outlook of the Reagan years you'd look at it and you'd say gee, it's probably going to be William French Smith from California or Ed Meese, and it wasn't by any definition or any stretch of the imagination. So you know, it's surprising somewhat that he didn't reach out to bring in some ideas people. I think Jack Kemp is the most interesting person in American politics on the right side of the aisle. I mean, the Reagan revolution began in Jack Kemp's mind and imagination.

MR. LEHRER: Eleanor, what about Kevin's point that it is only these six or seven at the top who are really going to run things and that you have had a kind of a second tier, that's your theory, right, the second tier folks that really don't matter very much?

MS. NORTON: I guess by that Kevin means those are the ones that know Bush best and, therefore, he assumes that they will have the most influence. And I agree with Mark. I am not sure that the fact that they went to Harvard, Yale and Princeton determines that. And I think what's going to determine that as much as anything is how able these people are and where the --

MR. LEHRER: You really think it could be -- I mean that Bush is, it's going to be more up to the individuals than it's going to be up to Bush as to how these people --

MS. NORTON: In this way -- and the issues -- in this way; I agree with my two conservative colleagues here that new ideas are needed but perhaps for a different reason. Reagan has left the domestic agenda in complete disarray and I think domestic, the international isn't, I mean, we have Gorbachev, we have some things happening there. At EPA you're going to have to rebuild whole agencies. You're going to have to rebuild the Environmental Protection Agency, you're going to have to rebuild the civil rights functions of the government. You're going to have to start a new in Veterans and try to make something of that. he is going to have to therefore move with people who know how to move the issues that are indeed arising and I'm not sure that Baker, for example, has the greatest burden here because I'm not sure foreign policy is in the kind of disarray some of the domestic agencies are.

MR. PHILLIPS: Well, I think the difficulty is that from the standpoint of many people, let's put it that way, the combination of international affairs and the economy, especially where they come together, is probably the key set of issues in the next few years and he's put together a team that they have a good skills background, they know each other very well, they come from very similar backgrounds, they know him, they have his confidence. It just leads me to think, and forget the Harvard or St. Marx business, that that's the in group, and that those are the people who will make the key decisions.

MS. NORTON: But the question, Kevin, is do they know how to solve the problems?

MR. PHILLIPS: We have to hope so, but we have to rely on a pretty small group of people as they are going to call the shots.

MR. VIGUERIE: If their track record is any indication, I don't think it bodes very well for America, or, Eleanor, for the Republican Party. And my colleagues here on the left, Mark and Eleanor, are not all that unhappy with George Bush has done the last six, seven weeks.

MR. LEHRER: The fact that they like it proves your point?

MR. VIGUERIE: Exactly. It proves my case. We could have said this the few minutes and be done with it.

MS. NORTON: The fact -- all we are saying, all we are saying, Dick, is that George Bush understands that he cannot govern the way he ran, that he's got to somehow find the --

MR. VIGUERIE: That's what you want to convince him.

MS. NORTON: That's right.

MR. VIGUERIE: The people in this city like yourself, Eleanor, want to convince him, forget all those things you said, forget the Republican Party's platform. And let me tell you who ought to be most worried right now. It's the Republicans at the grassroots level because this cabinet reinforces a negative stereotype that America has of the Republican Party, a party of rich men serving a few special interests here in this town.

MR. LEHRER: Mark --

MR. VIGUERIE: And how are you going to realign America with this type of a cabinet?

MR. SHIELDS: Richard, Richard. George Bush won a smashing victory, the largest personal popularity percentage of the vote of any President, first term President since when, Franklin Roosevelt, all the way back.

MR. VIGUERIE: Oh, absolutely not. Ronald Reagan had 10 points - -

MR. SHIELDS: No. Ronald Reagan had 50 percent of the vote in 1980 --

MR. PHILLIPS: He had 10 points over the Democrats and Eisenhower --

MR. SHIELDS: My point is --

MR. PHILLIPS: You're wrong, you're wrong.

MR. SHIELDS: It's all the way back to Eisenhower, all the way back to Eisenhower. My point is --

MR. PHILLIPS: No, the election margin was higher. Sorry.

MR. SHIELDS: He had a big big victory -- I don't know about these guys. Richard's idea is if, you know, if you're for fluoridation of the water -- the point of this whole thing is that George Bush did not run an anti-establishment campaign. He ran a culturally conservative campaign and he did, and he raised culturally conservative issues on crime and they were legitimate issues and all the rest of it. That does not convert -- Willie Horton's furlough program does not convert into a legislative program. He ran a campaign that did not attack Washington, that would have been unbelievable. It would have not been credible to the American voters or the American political community and the third point is, and I think it's a crucial one, implicit in his choices is a recognition that the electoral process is important. You go through it. Nick Brady was in the United States. Jim Baker ran for Attorney General of Texas in 1978. Ed Derwinski was in the Congress, Jack Kemp was in the Congress. You go right through. Dick Thornburgh was Attorney General of Pennsylvania, Governor of Pennsylvania.

MR. LEHRER: Governor of Pennsylvania.

MR. SHIELDS: And John Tower, of course, was Senator. This is a recognition that I'm going to have to get along with the Democratic Congress, I'm not running against the Congress. That tune has been played.

MR. LEHRER: This tune has also been played. Eleanor Holmes Norton, gentlemen, thank you all very much.

MR. MacNeil: Still ahead on the Newshour, a new refugee problem, the food war with Europe, and the latest video game fad. FOCUS - FLEEING TO FREEDOM

MR. MacNeil: Next, immigrants from Central America stuck in the Rio Grande Valley of Texas. They stay there because of new immigration regulations. Correspondent Betty Ann Bowser reports from Harlingen, Texas.

BETTY ANN BOWSER: It happens this way every day, people crossing the Rio Grande into the United States, carrying their possessions in a plastic bag. They are illegal aliens. They have been coming from Mexico for years. But in the past year, more and more of them are coming from Central America, and most of them from Nicaragua. The vast majority of the Central Americans are asking for political asylum. Helena Swarez is a 54 year old grandmother whose husband died after he was forced into the Sandinista Army with a heart condition. She is afraid of the government soldiers. Her daughter, Flora Rodriguez, has a 2 year old daughter. She says the soldiers abuse and molest young children back in her country and she fears for her daughter's safety. And both mother and daughter say they paid a smuggler $3,000 to get them here to the Immigration & Naturalization Service in Harlingen. They spent the night outside on the concrete before applying for asylum. Like the others, they waited in this long line which began forming before daylight. Since May, 2000 Central Americans a week have passed through this office at the southernmost entry point in Texas. Twenty-nine thousand people have applied for political asylum, then given work permits and authorization to travel to friends and relatives in cities like Los Angeles and Miami. Add them to an already crowded docket of asylum cases and the INS says it has a log jam on its hands; 40,000 cases are backed up in Miami alone. So the service is changing procedure. Under a new INS policy, all Central Americans seeking political asylum in the United States who enter through the Rio Grande Valley must file their applications for asylum here and wait to have them processed here. Virginia Kice is Spokesperson for the Immigration Service in Harlingen.

VIRGINIA KICE, INS: We hope the word will quickly get back to Central America that Harlingen is no longer providing a free ride. If they come here, they'll get swift, efficient service, but they won't immediately be given authorization to move on to other parts of the country. If you walked out in our parking lot and asked these people, well, why are you here, they'd say I'm here because I want to find a job, I want to better myself economically. I'm sure there are bona fide cases among these individuals that we're seeing here, but it is really the exception, not the rule.

MS. BOWSER: The INS maintains that most of the Central Americans crossing illegally come here for economic reasons and do not have a well grounded fear of persecution if returned to their countries. Jerry Sewell is INS District Manager.

JERRY SEWELL, District Director, INS: They talk to us at great length about the time they've been unemployed in their home countries. Unemployment is a very serious situation, but I don't believe we in the United States are going to be able to provide jobs for all the unemployed people in Central America.

MS. BOWSER: Linda Yanez is an attorney who represents some of the Central Americans.

LINDA YANEZ, Attorney: I think it's a more complex reason. I think it's a combination of a deteriorating economy, of political strife, armed conflict. You know, it's a combination of all of those things as to why people are coming. It's not just because they want a better job.

MS. BOWSER: As the number of Central Americans seeking asylum grows in the Rio Grande Valley, so does concern among community leaders. Ignacio Garza is May or Brownsville.

MAYOR IGNACIO GARZA, Brownsville, Texas: Under this change of policy, they must all stay, they'll be restricted here. We're concerned about what that does to our social services, who will house them, who will feed them, medical care, education, all those things that go into that component. What will these people do, you know, how will they provide for themselves, who will take care of them? This is where I think the federal government has to bear the responsibility.

VIRGINIA KICE, INS: We intend to turn these cases around in 30 days' time which is about six months to a year faster than we're seeing in these cities where they have major asylum case back logs. So I think that's our responsibility and we don't have the resources or the funding to furnish them with food and shelter while they're here.

MS. BOWSER: Do you think it's the INS's responsibility to do so?

VIRGINIA KICE: I think it's our responsibility to help them adjudicate their claim to make sure that they're afforded due process, but I don't think it's the Immigration Service's role to provide these people with food and shelter.

MS. BOWSER: Right now the Casa Romero is the only place to which Central Americans can turn. Run by the Catholic Church, Casa Romero is under court order to admit no more than 200 people at a time. Currently the shelter is full, so the new immigrants must get what they can from charity.

PATRICIA JORGE: They're hungry. They don't have no food, no money --

MS. BOWSER: How many people do you suppose you fed tonight?

PATRICIA JORGE: I don't know -- more than 50, I think there were more than 50.

MS. BOWSER: Angelina Encarasata and her five children had hoped to be in Miami to join her husband for the holiday season. Instead, like a growing number of others, she camped outside of the Casa Romero under a mesquite tree which also served as a family Christmas tree. Angelina says this is a sad holiday. She worries when she will ever see her husband again. She has applied for political asylum and says her case will not be heard for at least a month. Sister Norma Pimentel helps run Casa Romero.

SISTER NORMA PIMENTEL: They are in the streets everywhere. They are coming in great numbers and we can only help so many and so these people need the essential to survive. The main thing is food and a roof to be away from the rain and the cold.

MS. BOWSER: Mark Schneider walks among the Central Americans as they wait at the Immigration Office encouraging them to push ahead with their claims for asylum and he knows how tense their presence is making the Brownsville Harlingen community.

RESIDENT: Well, we've got enough people over here. Let them go back. They're not fleeing from hunger. They're fleeing because they want to get into our country.

MARK SCHNEIDER: You don't think there's war down there. You don't these people are suffering and being tortured. You don't think there's a good reason why people are leaving --

RESIDENT: Okay. Let them comply with our laws.

MS. BOWSER: It is this kind of resentment that worries community leaders as the numbers of Central Americans staying in the valley mounts.

MAYOR IGNACIO GARZA, Brownsville, Texas: This particular action is a conscious decision by our own government which could very adversely affect the citizens and the quality of life within our communities and that is what is frustrating them.

MS. BOWSER: Lisa Brodyaga is a veteran observer of the alien situation in the valley. She has watched INS policies come and go.

LISA BRODYAGA, Attorney: Changing INS policies is not going to stop people from crossing because they're crossing out of dire necessity and they will just find another way to get around the matter if that's what INS forces them to do; they won't stop coming.

MS. BOWSER: District Director Sewell disagrees.

JERRY SEWELL, District Director, INS: It will get the message across that you know, this, the Rio Grande Valley is not just an open door where you can come in for any reason whatsoever and just apply for asylum and thus gain entry to the United States.

MS. BOWSER: Meanwhile, the Central Americans keep coming to one of the poorest regions of the United States, an area that already has trouble taking care of its own. FOCUS - BIG BEEF

MR. MacNeil: Next, the sudden trade strife between the United States and some of its closest allies in the 10 nation European community. On Sunday, the community will ban the import of all hormone treated meats. The U.S. Trade Representative Clayton Yeutter says the ban is unfair. It will cost American exporters $100 million a year. The U.S. is threatening immediate retaliation by slapping 100 percent tariffs on about $100 million worth of European products popular in this country. They include some hams and beef, canned tomatoes and tomato sauce, fruit juices wine coolers, instant coffee, and pet foods. In response, the Europeans have prepared their own list of products for a counter retaliation and now many are worried that the meat skirmish could turn into a full scale trade war. Joining us to debate the issue are Sir Roy Denman, head of the EC delegation in Washington, and Sen. Patrick Leahy, who chairs the Senate Agriculture Committee. Senator, why do you consider the European ban on hormone treated meat unfair?

SEN. PATRICK LEAHY, Chairman, Senate Agriculture Committee: Well, it's done not to protect their people from anything. I mean, after all, these are the same meats that you and I and our families eat. There is no scientific evidence of any sort that there's anything wrong with them. They're doing it simply as pure protectionism. They've done this over and over in the past. They're doing it again. I think they probably felt that the United States let them get away with it. Well, this time we didn't. It's an action with no basis in fact. In fact, we've been willing to turn it over to a committee of experts in the GATT, let them decide whether there's any safety issue here or not. They don't want that. They're doing it to protect some inefficient agriculture in their own country and we've responded. Now in the past, I've disagreed with some of the actions of the Reagan Administration, but I agree with them absolutely on this. I think we should respond. I think we should be very tough on it, because I don't think the United States should allow somebody to take an action with no basis economically or in fact of this nature.

MR. MacNeil: Sir Roy, how does the Commission answer that, that it's not a health standard because there's evidence that it's a health, a danger to health, but it's just protectionism?

SIR ROY DENMAN, European Community Commission: Well, I disagree completely with the charge that this is a protectionist measure. What happened was that in 1987 in response to overwhelming consumer pressure, the Europeans decided that they didn't want to eat beef with hormones in it. Now if you give an instruction like that to producers, you naturally have to accept a corresponding limitation on imports. It's not a measure designed only to limit imports from the United States. It applies to all imports. We held off the ban on imports, although the ban on production went into effect on the 1st of January 1988, for the whole of this year. We can't go on indefinitely telling our producers they can't turn out meat with hormones and let imports of meat with hormones in. This doesn't apply only to the United States. It applies to all our importers and all our other importers, Australia, and New Zealand, Brazil, Argentina, have accepted it. There's nothing to prevent anyone exporting meat to the community. We simply say without hormones. Now if anyone talks about medical evidence or scientific evidence, let me give you an example. We cannot in the community export the kind of cheeses we eat in France to the United States. That's because they come from non-pasteurized milk. Now is anyone telling me that with some real medical evidence that people are in danger of their lives of eating cheeses like this? Is President Mitterrand in grave danger of his life? Perhaps someone should tell him. But we don't dispute the fact --

SEN. LEAHY: Robin, that's --

MR. MacNeil: Just, Senator, hang on a second, Senator. Let him finish.

SIR DENMAN: We don't dispute the right of any country to exercise its sovereign right to determine what kind of food it wants to eat and that is a consequence for imports. We haven't protested against this limitation on cheeses. You have a perfect right to do so. But when we take corresponding action on meat, we simply say what is sauce for the goose is sauce for the gander.

MR. MacNeil: How do you reply to that, Senator? I mean, isn't that a parallel case?

SEN. LEAHY: No. For one thing, I think we have some very strong standards on pasteurization that we all understand. But even the cheeses that Sir Roy talks about are allowed him. They have to be cured a certain period of time, but they're still allowed in. He could still buy them, he could still buy them here in the United States. But this kind of action is not without precedent on the part of the EC. They did a similar thing in their third country meat directive. They wanted to ban meat from this country unless our slaughter houses met certain standards, and what were the standards, everything from the size of the parking lot to the type of fence around them, things that had absolutely nothing to do with what the conditions of the slaughter house -- even to the kind of clothes that somebody might wear in there -- it's protectionism.

MR. MacNeil: Let's stick to the current, let's stick to the current case, Senator, just for a moment. What is there wrong with a country, or in this case a community of 10 countries, deciding for its own consumer pressure reasons, its own internal political reasons, it wants to ban meat made with hormones, produced with hormones?

SEN. LEAHY: Because that is not really the point of it. Among other things, the press is rampant with stories of the use of similar hormones being done in Europe. In fact, the European press reports this on a fairly regular basis. This, however, is done not because of any safety factor. We have, after all, agreed to have residue testing before any of our meats go in there to find out if there are any of these hormones that they're concerned about. That's not good enough for them. They just want to set up a protectionist wall to allow producers that could not compete without such protectionism to compete and now they've put up an image, one, that it's a safety factor which they know it's not and secondly, that gee, it's too bad it's now going to cost the American consumers more for the products from Europe, which of course ignores the fact that we have the same products in this country that we can now buy them for a lot less.

MR. MacNeil: So, Roy, how can you demonstrate that it is a safety concern?

SIR DENMAN: Well, it's a concern taken in response to overwhelming pressure from consumers. And we surely go from the basis that what the people say is right. It is not taken for protectionist reasons. As far as hormones is concerned, where hormones are present, then we have decided not to have them. But you come back to the basic principle you mentioned earlier, that any country has a sovereign right to decide what kind of food it wants or doesn't want to eat. And what puzzles me is that all our other major suppliers, Australia, Argentine, New Zealand, Brazil, have agreed to continue exporting meat to us, but without hormones.

MR. MacNeil: Why in that case does the community refuse the U.S. suggestion to go to an impartial committee under the General Agreement for Tariffs and Trade to have the safety factor in the hormone treated meat decided?

SIR DENMAN: Because we don't think that scientific evidence here is the crucial factor any more than I suggest scientific evidence is crucial in keeping out the kind of cammen bear and brit I used to eat in France.

MR. MacNeil: But the Senator has just said you can buy that here.

SIR DENMAN: You can only buy it under a Food & Drug Administration regulation if it's been baked at a certain temperature for a certain number of days. That changes the texture and the taste of the cheese entirely. It's like comparing apple juice with a dry martini.

MR. MacNeil: Senator.

SEN. LEAHY: Well, I drink neither the martinis nor the apple juice, so I'll take Sir Roy's word on what the taste might be but that, again, is not the situation. They do not want, in fact, refused to allow this to go to testing, because they know there's no scientific basis. Among other things --

MR. MacNeil: But is there not, Senator, is there not a certain amount of consumer, at least consumer and some medical anxiety in this country about the long-term effects of treating meat with hormones, the meat that you say we consume?

SEN. LEAHY: Absolutely, and that is why we have banned, both the United States and Europe, DES, but they're talking about what hormones are there. If you tested any meat in Europe, you'd probably find hormones in it anyway. Some occur naturally. We're asking to look at the residue. Is there an excessive amount? Does it create any health hazard? If it does, I don't want it fed to my children either, but, again, that is not the reason for it. It follows in a long line of protectionist steps taken by the European community in agriculture matters. But does Australia and New Zealand go along with it? Of course, because they're small producers. They don't have any choice. They could also make Jamaica go along with it if they want. The question is when they come up against a major producer like the United States, finally somebody has the guts to stand up and say we will not take this kind of arbitrary, unnecessary and improper activity on the part of anybody.

MR. MacNeil: How do you respond to that, Sir Roy?

SIR DENMAN: I've never known Australians to be described as people lacking in the will to stand up for themselves, Senator. But the plain fact is that there is concern in Europe about hormones, and our people have taken a decision just as you've taken a decision on the kinds of cheese you will allow into this country.

MR. MacNeil: But, Sir Roy, what about the Senator's point that your own newspapers report that your farmers are continuing to use hormones in producing meat despite the ban?

SIR DENMAN: Well, that is something that we have to tackle as a law enforcement measure, because our law provides that hormones should not be used. And we've already taken rigorous action with heavy fines, in certain cases where we found those going on. That I agree is our responsibility and we shall fulfill it.

MR. MacNeil: So, Senator, what's going to happen if neither side backs down?

SEN. LEAHY: Well, I would hope that cooler heads would prevail. Nobody gains in a trade war, and this is the opening skirmish of a trade war. Neither side does, but if it does become an agricultural trade war, at least in the long run the United States will win it because of our productive capacity. But I would hate to see that happen. But if there is going to be one, we're not going to go in and unilaterally surrender. And the EC has to understand that, so I would hope that just as in the so called pasta war about a year or so ago, cooler heads will prevail and reasonableness will come across and the protectionist bans will go down, but if it is a trade war that we get into then the U.S. wins.

MR. MacNeil: Is that what will happen, Sir Roy?

SIR DENMAN: Well, if the U.S. goes ahead with this measure on January the 1st, which I should emphasize is not within the international trading rules, it's a violation of the rules of the GATT, then we draw another list of products on which we're ready to retaliate. We'll have a look at that in early January and take our decision.

MR. MacNeil: How is it, the U.S. action, a violation of the rules of GATT?

SIR DENMAN: Under the GATT rules before you take action of this kind, you've got to get the authorization of the other contracting parties to the general agreement and that hasn't been given. We are quite willing to have the legality of these measures looked at in the GATT, and that I think is a step which will be in the interest of the United States as well as ourselves as major trading partners.

MR. MacNeil: Is the U.S. violating the GATT rules, Senator?

SEN. LEAHY: No, I do not feel we are at all. I think we are operating well within them, because we've seen a complete violation on the part of the EC. Now I would not expect Sir Roy to agree with me on that, but, in effect, it is, it's arbitrary and high handed and we've said no.

SIR DENMAN: Our action is completely within the international trading rules. There are many things in life, Senator, I can't do. I can't play the banjo or wiggle my ears, but I spent 40 years looking at the GATT and looking at it and I can tell you that our action is fully within the international trading rules and yours is not.

MR. MacNeil: Well, we're going to have to see how this escalates or gets solved. Sir Roy Denman and Sen. Leahy, thank you both for joining us. FINALLY - GAMESMANSHIP

MR. LEHRER: Finally tonight, the latest video game craze to sweep the United States and Japan. It's called Nintendo. We have a report from Lee Hochberg of public station KCTS Seattle. [COMMERCIALS]

LEE HOCHBERG: Last year in the United States home video game sales hit $1.1 billion, driven by the games' popularity among 8 to 14 year old boys.

LITTLE BOY: Actually my dad plays a lot too.

LITTLE BOY: The best games are the ones that have like a lot of levels and that you can't, you know, pass right away. You have to take a while. [COMMERCIAL]

LEE HOCHBERG: Japanese owned Nintendo of America has emerged as the industry leader. The company is based just outside Seattle where it employs 275 workers serving the U.S. market. Its high- tech, high profit products accounted for over 70 percent of all home video game sales in 1987. The company expects industry sales to double this year. Nintendo and its chief competitors, Sega and Atari, have seen the industry go through major changes in its 20 year history. [COMMERCIAL]

LEE HOCHBERG: The home video fad of the early 80's had a spectacular rise, but the bottom fell out of the first home video boom virtually overnight. In 1983, earnings for the industry peaked at $3 billion. Only 2 years later, sales plummeted to a paltry 100 million. Industry experts like Howard Phillips, a product analyst at Nintendo, blamed the poor quality of the early video game systems for the market's collapse.

HOWARD PHILLIPS, Nintendo of America: When it first came out in the early 80's, everybody rushed out to get one. It was so marvelous that you could have this in your home. It was great technology. It was something that all the kids were rushing to in the arcades. It was also very very enticing. Unfortunately it was also junk. [COMMERCIAL]

LEE HOCHBERG: The current success of home video games like Nintendo's hot selling Legend of Zelda lies in their advanced technology and challenging complexity. The old games were simply too simple.

HOWARD PHILLIPS: The difference between 1982 and '83 and 1985, 6 and 7, is technology has taken a substantial leap in our favor. On computerized circuitry, one action, for instance, pushing the A button in Mike Tyson's Punch Out initiates a whole series of responses that you're going, that are going to be depicted on the video screen. You're going to see your character pull back on his arm like he's going to throw a punch. You're going to see Mike Tyson start to lean away a little bit. Maybe his eyebrows will start to flicker a little bit because he's bracing for the blow that's coming from you.

LEE HOCHBERG: The newest Nintendo game programs are developed in Japan. Then they're transmitted electronically to the United States. Masahiro Ishizuka is part of the Nintendo R&D team.

MASAHIRO ISHIZUKA, Nintendo of America: We try to receive all games over the telephone line for the variation and we feed it back to Japan to meet American needs.

LEE HOCHBERG: Mike Tyson's Punch Out, Super Mario Brothers, Kid Icarus, and Metroid are among Nintendo's biggest sellers, but so far, none has surpassed Zelda in popularity. The game is a complex high-tech adventure fantasy. It can take up to 90 hours to successfully complete and it's not uncommon for kids to spend hours playing it non-stop. It's also not uncommon for parents to become concerned over video game addiction. That's according to University of Washington Psychologist Laura Kastner.

LAURA KASTNER, Child Psychologist: Well, I think the biggest problem is that the stimulus value of the video games is so high that the children are likely to want to spend a great deal of time involved with them and then the parents start having concerns about whether this is the kind of activity they want the children to be involved in for four or five hours a night.

LITTLE BOY: I remember every day after school I used to rush home to play my Nintendo and I'd just spend hours and hours and just play it all, just from when I got home from school until I went to bed.

YOUNG BOY: I know this kid, he's 13 years old and he plays it all the time. He's like how Zack used to be. He goes home, plays Nintendo, plays it before dinner, eats dinner and goes back, plays Nintendo, plays it till he goes to bed.

LAURA KASTNER: The parents worry the most where the children are clearly more involved with this than anything else and drawing back, withdrawing from other activities that might be growthful and good for them.

LEE HOCHBERG: The Legend of Zelda is so complex and kids are so driven to unlock the secrets of the game that they like their parents may turn to counselors for help. They don't turn to psychologists, however, but to professional video game counselors.

GAME COUNSELOR: What will happen is you'll get sucked into that pipe, okay, and you'll go down into another warp zone and what you're going to do then is go into that first warp pipe and that will take you down to the minus world.

LEE HOCHBERG: Nintendo of America has 75 full-time game counselors on staff. They handle an average of 25,000 phone calls from all over the country each week, calls that are not toll free.

LITTLE BOY DISCUSSING GAME WITH GAME COUNSELOR

LEE HOCHBERG: The Legend of Zelda, like Donkey Kong and many other video games before it, revolves around the age old theme of a maiden in distress, which may be one reason boys, not girls, find the game so seductive.

LAURA KASTNER, Child Psychologist: Clearly, the population that's more interested in them and more involved in them are boys and the reason for that is probably just more evidence of the sex typing in our culture which our boys are more competitive, task oriented, activity oriented, so this is playing right into their interests.

HOWARD PHILLIPS, Nintendo of America: By the end of this year, we will have I think close to 90 or 95 percent of households with boys between the age of 8 to 16. So that means if you see a boy on the street, he's got one in his house.

LEE HOCHBERG: Nintendo recently developed a new video game that's designed to attract girls and which may ruffle a few feminists feathers. It's aerobics. While boys seek to become heroes by rescuing fair maidens, girls are expected to work on their thighs. For those interested in something a little more assertive for girls, Dr. Kastner has a suggestion.

LAURA KASTNER, Child Psychologist: I don't know what the game would be, but it would be something about -- the attractive I think would be beating out men going up a corporate ladder or something like that.

LEE HOCHBERG: In addition to improved graphics and advanced technology, Nintendo also owes some of its staggering success to its aggressive marketing strategies. Nintendo kiosks are popping up in shopping malls all over America. And in Japan, where one in every three homes is equipped with a Nintendo entertainment system, extraordinary demand for the product has drawn worldwide media attention.

NEWS REPORTER: [March 11, 1988] All of teenaged Tokyo seem to beat a path to the door of the store selling its latest video game cassette in an unprecedented display of consumer frenzy. The lines outside the Tokyo shop were so long that some waited for 20 hours just for a chance to buy the latest in a series of computer games called Dragon III.

LEE HOCHBERG: Nintendo's success in both Japan and the United States is helping fuel expansion at its American plant. The company is enlarging its facility to meet growing demand and with Nintendo equipment in millions of homes, Howard Phillips says that video games are just the beginning.

HOWARD PHILLIPS: Nintendo has got a piece of electronic gear which is in quite a few households now and we're looking to get it in as many households as we can. In the future, who knows what we'll be able to do with this in addition to the home video entertainment. RECAP

MR. MacNeil: Again, the main points in today's news, President Reagan and President-elect Bush were subpoenaed to testify at the trial of Oliver North by North's attorneys. A White House spokesman said no decision has been made on whether the President will appear in person at the trial. He said historically Presidents have provided information through written questions and answers. In other news, lower government economic indicators and a drop in new home sales showed slower growth in the U.S. economy. An Iranian terrorist group repeated its claim to have bombed Pan Am Flight 103 and made a new threat. And the son-in-law of the late Soviet Leader Leonid Brezhnev was sentenced to 12 years in jail for taking bribes.Good night, Jim.

MR. LEHRER: Good night, Robin. Have a nice New Years weekend and we'll see you on Monday night. I'm Jim Lehrer. Thank you and good night.