The MacNeil/Lehrer NewsHour

MR. LEHRER: Good evening. Leading the news this Friday, President Bush approved a plan to build fighter planes with Japan, the flight of Space Shuttle Atlantis was scrubbed 31 seconds before launch, and government indicators showed the U.S. economy slowing down. We'll have the details in our News Summary in a moment. Charlayne Hunter-Gault is in New York tonight. Charlayne.

MS. HUNTER-GAULT: After the News Summary, President Bush's barn storming political week will be deciphered by our regular David Gergen/Mark Shields team, then a report on the heated debate over nuclear fusion breakthrough, next a debate over whether the retirees or the company should get any excess money when a pension plan is terminated, and finally, a James Fisher essay on dust bowls of old. NEWS SUMMARY

MR. LEHRER: President Bush has decided to go ahead with the FSX fighter plane deal with Japan. A Japanese company and General Dynamics in the United States would jointly manufacture the plane, a modified version of the US F-16 fighter. Opponents charge the joint venture would jeopardize U.S. technological secrets. Mr. Bush in making the announcement this afternoon said he disagreed.

PRESIDENT BUSH: I'm convinced that the co-development of this aircraft is in the strategic and commercial interests of the United States. And we weighed this matter from the standpoint of trade, of our industrial growth, and technology transfer as well as strategic and foreign policy considerations. This aircraft will improve the basic F-16 design and will contribute to the security of the United States and our major ally, Japan. There will be no cost to the American taxpayer and at the same time, the Japanese will improve their ability to carry their share of the defense burden.

MR. LEHRER: Mr. Bush said U.S. companies will handle 40 percent of the plane's production. He said sensitive U.S. computer codes would be protected during the manufacturing process. Charlayne.

MS. HUNTER-GAULT: The space shuttle Atlantis never got off the launch pad today. It came within 31 seconds of lift-off when the mission was scrubbed due to a problem in a pump that cools theengines. The shuttle was to have released a robot space probe called Magellan that would embark on a 15-month journey to explore and map the planet Venus. Nearly an hour after the launch was scrubbed, launch pad workers helped the four man, one woman crew from the shuttle vehicle. Late this afternoon, NASA officials said they will study the problem for a couple of days. They said a new launch could come no earlier than Monday.

MR. LEHRER: A federal housing rehabilitation program has been suspended. Housing and Urban Development Secretary Jack Kemp took the action after investigators said it was abused during the years. A report released this week by the HUD Inspector General said former Reagan administration officials and other prominent Republicans received substantial profits from consulting contracts to rehabilitate subsidized housing. Among those who are said to have benefited were former Reagan Interior Sec. James Watt, and the late John Mitchell, who was Attorney General in the Nixon administration. There was more evidence today that the economy is slowing down. The government's economic indicators dropped .7 percent in March, the second consecutive monthly decline. Three straight drops usually signal that a recession is underway. In other economic news, Mobil Oil announced today it is pulling out of South Africa. Mobil said it sold its assets to a South African company because new U.S. tax laws made it difficult to compete there. Mobil is the largest U.S. company still doing business in South Africa.

MS. HUNTER-GAULT: The United States and Panama are trading charges over that country's upcoming election. Yesterday in Florida, President Bush accused the Panamanian Government of setting up systematic fraud for the May 7th balloting, and he warned that the U.S. would not recognize fraudulent election results engineered by Panamanian strongman Manuel Antonio Noriega. But at the United Nations today, Panamanian Foreign Minister Jorge Ritter issued this charge.

JORGE RITTER, Foreign Minister, Panama: [Speaking through Interpreter] U.S. plans to interfere in the Panamanian electoral process have entered into a phase of direct participation, I repeat, a stage of direct participation by the United States with the objective of altering the public order, causing chaos, promoting widespread destabilization in the country around the elections and creating a pretext for military interventions against Panama.

MS. HUNTER-GAULT: In Washington, Secretary of State James Baker said that the United States planned to send former Presidents Gerald Ford and Jimmy Carter as part of an international team to observe the elections.

MR. LEHRER: Chinese students today vowed to continue their five day boycott of classes. Yesterday 150,000 demonstrators marched to Beijing's main square to demand democratic reforms. It was the largest protest in the history of Communist China. The protest's organizers have rejected the government's suggestion it hold talks with leaders of official student groups. And in Seoul, South Korea today, government security forces clashed with students on five college campuses. The police broke up an attempted march to the North Korean border. The confrontation coincided with continued labor unrest in two other South Korean cities.

MS. HUNTER-GAULT: In Lebanon, a ceasefire brokered by the Arab League held today, but no solution has yet emerged over control of the country's ports, the cause of the 52 day old conflict. Most Lebanese remained wary and stayed indoors. That's it for the News Summary. Still ahead, the barn storming political week with Gergen and Shields, heat over nuclear fusion, a pension fund debate, and an essay on dust bowls. FOCUS - GERGEN & SHIELDS

MR. LEHRER: At noon tomorrow, Eastern Time, George Bush will have been President of the United States for 100 days, and thus, the first 100 days of the Bush Presidency will have passed. The first 100 days of Presidencies is not something printed on calendars; it is something mostly invented and observed by pundits. And we observe it tonight with our own pundits, Gergen and Shields. Mr. Bush, himself, set the stage for the observances by visiting six states in four days. He made 12 major public appearances this week to highlight the successes and goals of his administration, speaking on topics ranging from drug policy and capital gains to relations with Congress.

PRESIDENT BUSH: [Monday, April 24, Chicago] I think the work we've done these past three months demonstrates the value of tough principled negotiations between this administration and the Congress. The bipartisan budget agreement that we worked out 10 days ago is a key example.

PRESIDENT BUSH: [Tuesday, April 25, San Jose, CA] I've listened to all the criticism and I've heard, as you have, the criticism of people who ridicule cutting the capital gains tax as somehow a tax break for the rich. Well, they couldn't be more wrong. Lower capital gains taxes will create jobs for those who don't have jobs, will help build a better America.

PRESIDENT BUSH: [Thursday, April 27, Miami] Americans cannot blame the Andean nations for our voracious appetite for drugs. Ultimately, the solution to the United States' drug problem lies without our own borders, stepped up enforcement but education and treatment as well.

PRESIDENT BUSH: [Today, Washington, D.C.] It is a very important thing for a President to get outside the White House andmove around this country. And some of the friends that were traveling with us didn't seem to understand that, but I can tell you I learned a lot from it and it was a good thing to do and I'm going to keep doing that.

MR. LEHRER: According to a Los Angeles Times Poll released today, the President's positive evaluation of his own work is shared by almost half the nation. The Times said 47 percent of those asked approved of his actions in the White House, 18 percent disapproved, 35 percent registered no opinion. Never among any group registering no opinion is our term of Gergen and Shields. That's David Gergen, Editor at Large of U.S. News & World Report, and Mark Shields, Syndicated Columnist for the Washington Post. How would you characterize Mr. Bush's beginning, David?

DAVID GERGEN, U.S. News & World Report: I think he's doing a little better than he was 50 days ago. I thought he was off to a very slow start, but it seems to me he's started to catch hold a bit more. I think the team day to day looks better. He's done a particularly good job in these first hundred days at defining himself, who George Bush is. I do not think he's done so good a job as defining what his goals are, what his agenda is. I think that's one of the weaknesses today.

MR. LEHRER: Mark.

MARK SHIELDS, Washington Post: I think he's still haunted by Ronald Reagan. I mean, the strength of George Bush is his comparison to Ronald Reagan, the point that David makes, the persona. He has a deft way with those about him. He's appreciative. He doesn't have to be introduced to his grandchildren. There's a genuine family feeling in the White House, but he's a man thus far who seems to be more of a code of personal conduct, rather than to have a core of philosophical consistency, and I think that's what's missing. That's the agenda and the lack of an agenda as contrast to Reagan; Ronald Reagan had an agenda.

MR. LEHRER: But you said he's defined himself personally, David. In what way?

MR. GERGEN: Well, I think he did have to follow an extraordinarily popular President who had a style that was extremely pleasing to the country and that I think was a major test for George Bush was how to get out from the Reagan shadow, and I think he's done that in a fairly stylish way.

MR. LEHRER: But you don't think he's done that?

MR. SHIELDS: No. I don't think he's done it in this sense. I don't think he's done it because the very reason that David said. He followed a fairly successful, popular President. We've had a series of Presidents for the past quarter of century who have followed unsuccessful Presidents of the other party and the problems that they inherited, they've been able to say, geez, I'm telling you, the guy that was here before us, he left no money in the petty cash, there were no stamps in the postage meter, and so you can blame him. You can't do that. S&L fiasco, Bush can't blame him.

MR. GERGEN: We're talking about two different things. I agree with that. I think that stylistically he's done well in a hundred days. I agree with you, because he believes the country's doing so well he doesn't need to do a lot and, therefore, he just hasn't come up with an agenda and I think because he's following a President who's perceived as successful, he looks less successful and daring and bold.

MR. LEHRER: But he is being himself. I mean, he's being George Bush?

MR. GERGEN: That's right. I think we see a man who is terribly comfortable with power and I think the country is growing comfortable with George Bush. I think Barbara Bush has made an extraordinarily good impression and I think George Bush personally has made a good impression as well.

MR. LEHRER: I want to get to this trip that he made last week but, first, where did this whole 100 days thing get started? Why are we even talking about it?

MR. SHIELDS: Franklin Roosevelt.

MR. LEHRER: Franklin Roosevelt.

MR. SHIELDS: Franklin Roosevelt, who was the dominant political presence of the 20th century to whom all subsequent Presidents are compared unfavorably. The first hundred days...

MR. LEHRER: Why the first hundred days?

MR. SHIELDS: When Franklin Roosevelt became President of the United States, one out of four heads of household was employed in this country, the banking system had collapsed. This a nation demanding unspecified, unprecedented and really just action from some sort of national leadership and that's what the hundred days. . .

MR. GERGEN: In American politics. . .you know, the real historical original 100 days, of course, go back to Napoleon at the time when he left Albet to Waterloo. That was the original hundred days and that's why the 100 day comparison grew up with Roosevelt. But I think that Mark is right. Every President since Roosevelt has suffered. I do think that Reagan had a good, successful. . .

MR. LEHRER: Do you think it's fair to ring a bell after the first hundred days, okay, let's talk about how a guy's doing?

MR. SHIELDS: I do, Jim. I'll tell you, I mean, especially with George Bush has really lost it, and I think 24 months we could look back and say, you know, what was the mistake he made in the first hundred days, and that is that George Bush, my savvy precinct committee woman used to say to anybody who wants to run for office, what do you want your political epitaph to be. In other words, what do you want people to feel that you stood for, that you made a difference, and George Bush has not communicated that, and the 100 days is the time to communicate it, the 100 days everybody wants a new President to succeed. We all do. We're not partisans. We're all patriots in the first hundred days.

MR. GERGEN: I think he's right. We're in the television age and it's even more relevant than it used to be because you have to seize the country's attention early. You know, people have a short attention span in this country. They size up politicians quickly just like they size up new television shows quickly and they make snap judgments. And the first 100 days becomes terribly important, when the country makes a judgment about who this man is and where he's going. I think they made a good judgment about who he is, not where he's going.

MR. LEHRER: My only question is this though, David, and what I'm trying to get at is it the American public that's just doing that, or is it just us?

MR. GERGEN: Well, it is artificial in a sense, but I think that the hundred days relate to attention span within the country. I might say there's another way to look at this which I found quite helpful. James David Barbara, the professor from Duke, was in town last night. . .

MR. LEHRER: The political science. . .

MR. GERGEN: The political science professor. And the leading scholar of the Presidency. And we spent so much time watching the way George Bush paddles the boat, whether it's in circles or straight lines, and what we were not paying attention to is that Niagra Falls was just over the horizon, and it's in that sense that I think the Bush Presidency still has not connected. It's not looking ahead. It's getting much better the way it paddles. I think the day to day operations are much sounder and more savvy. There are no more S&L mistakes, you know, of the first kind they made in the first couple of weeks. But they still haven't looked ahead and said what does the country need by the year 2000. You know, we have 3,000 kids a day dropping out of school. We're borrowing over $300 million a day, and nobody's talking about the larger problems. The administration is not focusing on the larger problems.

MR. LEHRER: Well, but President Bush says he is and his trips out into the country this week were meant to demonstrate that. What do you think of that, Mark?

MR. SHIELDS: I think David's right. I think. . .this was a great opportunity for him. People are ready, the American people are ready to listen to him. A new chairman in both the House and Senate Budget Committee and if you really want to do something about the budget deficit, this was the time to do it. If you really want to do something dramatic on entitlements, if you really want to do something in the question of saying this is a serious problem and I want to present it to the nation, he's had a great advantage though, the Democrats. I mean, the Democrats have been passive, inert and unorganized, so there's really, in spite of his own stumbling he hasn't really paid a price for it.

MR. GERGEN: That's right. But see in the next hundred days, in the next year, it's harder to do tough things, because the country is not as generous, it's not as charitable.

MR. LEHRER: And the Democrats will have their act together.

MR. GERGEN: I don't think they will.

MR. LEHRER: They might.

MR. GERGEN: There is a remote possibility that once every ten years one of the parties gets organized in this country.

MR. SHIELDS: But divisible by two we have elections. That was the advantage we had, was at that point we were 21 months away from election.

MR. LEHRER: Two other quick things, gentlemen. The abortion issue, of course, has been raised in a major way this week. It's back before the Supreme Court. How does that land, politically, David?

MR. GERGEN: Well, I think the country is extremely ambivalent. I was quite struck by this New York Times/CBS poll that came out this week. It said 48 percent of the people in this country think that abortion is murder, a child, and yet one out of every six people, people who even think it's murder, say it's okay to go ahead and do it. People are basically on the side of abortion.

MR. LEHRER: You mean choice.

MR. GERGEN: Choice, pro choice. But as this issue becomes politicized, there are major dangers for the Republican Party, it could spit apart the Republican Party, because the Democratic Party is fairly united around a pro choice position. The Republican Party, the majority are pro life but there is a significant minority within the party that's pro choice.

MR. LEHRER: Mark, your reading.

MR. SHIELDS: I don't share that as good news for the Democrats. I think that the movement or political ascendancy in the country is the pro life or anti abortion forces.

MR. GERGEN: You think that?

MR: SHIELDS: I really do.

MR. GERGEN: They're better organized. I don't think their numbers are larger.

MR. SHIELDS: I think their numbers are growing. I think the very fact that abortion is now, that the pro choice people find themselves on the defensive and they are saying and find themselves forced to say that when it's a matter of gender I don't want it and we get overwhelming numbers in the population on that issue. The second thing I think James Cargill, who's a political manager who managed successful statewide campaigns in Pennsylvania forGovernor in '86, Kentucky for Governor in '87, and New Jersey for the Senate in '88, said if it goes back to the states politically, that we will never see another Governor in any of the 50 states with a job approval rating above 60 percent, that it will be such a polarizing issue politically.

MR. GERGEN: I do think technology is changing the politics of it. As technology gets better and you can save a fetus earlier, it gets harder to be in a pro choice field. But I would disagree with Mark. I think the pro life forces are much better organized. There's much more passion. I think there are more people on the other side.

MR. LEHRER: Quick thing finally. The Wyoming election, the Republican won, anything special about that?

MR. GERGEN: What was special was the. . .if the Democrats had won, we would be talking about this endlessly as an avalanche, a hemorrhage and so forth. It's not so important except the Republicans stopped the hemorrhage.

MR. SHIELDS: When your side wins a special election, it has cosmic implications. When your side loses, it's for local reasons. This was decided because of local reasons.

MR. LEHRER: I see, but it wasn't really in doubt, was it?

MR. GERGEN: Yes, it was.

MR. SHIELDS: It was in doubt until the last week, and quitefrankly the negativism and the fallacy of it, it was a very negative, hostile campaign, and the Democrat, John Vinich's campaign, used a spot which on its face was so manifestly untrue, charging his opponent with. . .

MR. GERGEN: Because the Republicans won this, they're going to be much tougher. They won with a tough race and it will come back. . .

MR. LEHRER: We're talking about the Wyoming House race to fill the seat vacated by Secretary of Defense Richard Cheney. Gentlemen, thank you again very much.

MS. HUNTER-GAULT: Still ahead, heat over nuclear fusion, a debate over pension funds, and an essay on dust bowls. FOCUS - FUSION ILLUSION?

MS. HUNTER-GAULT: The scientific community has been in an uproar since last March, when two chemical researchers held a news conference in Utah to announce they had produced nuclear fusion in a jar at room temperature. As Correspondent Tom Bearden reports, their announcement touched off a worldwide scientific competition to prove or disprove the claim.

TOM BEARDEN: A simple tabletop experiment using materials found in any college chemistry lab, an unlikely and unexpected setting for what could be the most important discovery since fire. Chemists B. Stanley Pons and Martin Fleischmann say they found a way to achieve hydrogen fusion at room temperature. They announced it at a news conference on March 23rd.

MARTIN FLEISCHMANN: Stan and I thought this experiment was so stupid that we financed it ourselves.

STANLEY PONS: Basically we've established a sustained nuclear fusion reaction by means which are considerably simpler than conventional techniques.

MR. BEARDEN: If it truly is fusion, the experiment could lead to power plants that would burn a special form of hydrogen called deuterium, a virtually inexhaustible fuel that can be extracted from sea water. University of California Astronomer Tim Ferris.

TIM FERRIS, Astronomer: If Fleischmann and Pons are right, the world would not only have nuclear fusion and abundance of free energy, but it would also produce clean energy. Fleischmann and Pons are claiming the reaction they think is going on produces nothing but pure energy, it produces no radioactive byproducts at all, so it's the best of all possible fusion reactions if they're right, and that's a big if. But if they're right, the world will be a different place.

MR. BEARDEN: The Utah announcement electrified the scientific community because scientists had long believed it would take enormous heat and pressure to light a fusion fire. Ferris explains why.

TIM FERRIS: Imagine that these are two protons and you want them to fuse; that's nuclear fusion. Each proton is positively charged, so as they come together, they tend to repel each other like those little carrier magnets that you play with when you're a kid; they want to move apart. How then do you get them to fuse? Well, the way that nature does it inside stars at least is that the star's generating so much heat, so much pressure at the center, that it slams these protons together so hard that some of them overcome their mutual repulsion and they fuse. They release some energy when they do that, and that's where you get the energy from nuclear fusion.

MR. BEARDEN: For nearly 40 years, researchers working under that assumption have been trying to recreate stellar conditions on earth. Hundreds of millions of dollars were spent by large prestigious laboratories on huge machines to that end. The Utah news conference sent hundreds of scientists scurrying to their laboratories. Among them was Lawrence-Livermore Physicist Keith Thomassen who has been conducting hot fusion experiments, himself.

KEITH THOMASSEN, Physicist: We first saw the news conference on television and through looking at stop frames on television, looked at their equipment, and their electrolytic cells, and made some attempt over Eastern weekend like everybody else to duplicate it.

MR. BEARDEN: Georgia Tech researchers were also trying to duplicate it. On April 11th, they announced confirmation of the Utah results, but two days later withdrew that claim because of equipment problems. A second attempt to confirm also failed. A handful of other laboratories say they've duplicated parts of the results, but some had no luck at all. Independent confirmation is vital. Without it, the scientific community won't accept the results of any experiment. The Utah claim got a big boost from Stanford University on April 20th. For weeks, they've been running two cells, one filled with deuterium and another with ordinary water and hydrogen, and tracing the differences between their performance. If fusion is taking place, there ought to be a big difference between the reaction of deuterium and ordinary water.

STEVEN CROUCH-BAKER, Stanford University: This is the temperature of the deuterium based system relative to the temperature of the hydrogen based system today. And we can see that the temperature difference is significantly more than it was approximately a day ago even the conditions of the experiment are identical.

MR. BEARDEN: But skeptics like Lawrence-Livermore laser fusion expert Dr. Erik Storm aren't convinced that the heat output isn't generated by a simple chemical reaction.

ERIK STORM, Physicist: We have a hard time as physicists understanding from the laws of physics that we think describes, you know, nature today. It doesn't mean it's impossible. It just means it's improbable.

MR. BEARDEN: Stanford doesn't claim it's fusion, but they do virtually rule out a chemical reaction.

MARTHA SCHREIBER, Stanford University: We observe a larger heat effect during the charging of the deuterium sample than during the charging of the deuterium sample.

MR. BEARDEN: How much more heat than you would have expected?

MARTHA SCHREIBER: Up to now we are in the range of about 15 percent more heat output than input.

MR. BEARDEN: Does this effectively rule out any chemical reaction in this process?

MARTHA SCHREIBER: Well, any chemical reaction that we know at this point, because the energy that is in excess is too large.

MR. BEARDEN: So it could not be explained by any known chemical process?

MARTHA SCHREIBER: To my knowledge, no.

MR. BEARDEN: This is a picnic cooler. . .

MARTHA SCHREIBER: That's right.

MR. BEARDEN: . . .and some glass tubes.

MARTHA SCHREIBER: That's right.

MR. BEARDEN: It seems a very simple experiment.

MARTHA SCHREIBER: It does look very very simple, but it has its subtleties.

MR. BEARDEN: That may explain why other labs haven't been able to immediately duplicate the Pons-Fleischmann experiment, a fact that has troubled many scientists. Pons believes the others didn't follow the recipe.

B. STANLEY PONS, University of Utah: I've logged sixty-three or sixty-four laboratories trying to do the thermal experiment, and I can say honestly that not one of those laboratories is doing it the same way that we did. They all feel they have other ways to do and they're trying to do it other ways.

MR. BEARDEN: Because the Stanford team had earlier been working with the same materials, Dr. Robert Huggins believes he understands why some of the elements are so critical.

R0BERT HUGGINS, Stanford University: We have we think some insight as to why some of the people have not been successful with this, and we're just confident that there is another large effect here.

MR. BEARDEN: But there is another Utah scientist who has grave doubts about any large effect. Brigham University Scientist Dr. Steven Jones is a recognized authority on cold fusion. Recently, he came to the University of California at Santa Barbara to lecture on his cold fusion experiments. He had just returned from being grilled by other scientists in Europe on his results and had been up most of the night in his own laboratory. [DR. JONES SPEAKING TO GROUP]

MR. BEARDEN: He told the audience that using the same materials he'd seen some fusion, but nothing remotely like the heat output that Pons and Fleischmann claim.

STEVEN JONES, Brigham Young University: If we let our results represent $1, okay, our heat output, then their results would be 10 trillion times; it would easily be enough to pay off the national debt. You see that's the ratio of the results, the national debt to a single dollar roughly. I've been working with these concepts for a long time. I would, therefore, be, I must say, highly surprised if this heat were, in fact, due to fusion.

MR. BEARDEN: Jones said Pons and Fleischmann made a public announcement instead of following the traditional path of submitting an article for peer review and publication in a recognized scientific journal.

STEVEN JONES: A lot of physicists and I think chemists also have expressed surprise and disgruntlement at this approach of using the press to communicate preliminary results; it's almost embarrassing.

MR. BEARDEN: Jones has had several contacts with Pons and Fleischmann. He says he had an agreement with them to publish their results simultaneously, an agreement, he says, they broke.

STEVEN JONES: Some have suggested that there is, in addition to fusion fever, there may be an element of Nobel fever here. I don't know.

MR. BEARDEN: What do you think? Is there a Nobel fever?

STEVEN JONES: I would be hesitant to judge really. I just, I don't know. I will say that the scientists, you know, there at the University of Utah had visited our laboratory, we'd shown them our work, so they were aware of it, and it's possiblethat they may have wanted to hurry up and get their results out, you see.

MR. BEARDEN: Pons has denied he went around the peer review process, saying an article had been accepted by the Journal of Analytical Chemistry before the news conference. And Utah's University President said no agreement with BYU had been broken. Despite the criticism and the competition, Pons says he's moving ahead.

DR. PONS: I'm still confident that we have a heretofore unrecognized or unsteady nuclear reaction.

MR. BEARDEN: Pons says he's beginning a new round of experiments, including one that will be five times larger than anything he's tried before.

DR. PONS: We're just go on doing our own work, developing this to whatever extent we can and assist in the development of practical devices, and then if they still don't believe it, I can't help it, sorry.

MR. BEARDEN: Work will continue in other laboratories too until scientists know whether this really is fusion. Most believe that will take several months at most. But even if it is, Pons says a practical fusion generator is 20 years away. Tim Ferris will be happy whatever happens.

TIM FERRIS: You know, whether or not this turns out to be fusion, the marvelous thing about it is that it reminds of us the incredible richness and diversity of the stuff that makes up the universe. Here is one metal in one experiment, producing a result that seems miraculous. No one knows how to explain it. It reminds us that science does not have an explanation for everything, that the world is still full of mystery and that the scientists are simply like poets and painters, among those who are in the business of exploring that mystery. So even if the whole thing goes away, it will have taught us something, which is that the world is still a miraculous place.

MS. HUNTER-GAULT: Brigham Young University Physicist Steven Jones' cold fusion results were published yesterday in the British journal Nature. FOCUS - PENSION PERIL

MS. HUNTER-GAULT: Next tonight an issue of equity and economics. The fight is over billions of dollars of excess money in America pension funds, and it's between companies who now legally claim it and retirees, who say the money should be theirs. In a moment we'll hear a debate recorded yesterday between Sen. Howard Metzenbaum and Peter Kelly from the U.S. Chamber of Commerce, but, first, a look at an unlikely battleground for this conflict, one of America's largest non-profit organizations, the American Red Cross.

MS. HUNTER-GAULT: The American Red Cross is the largest, most diverse voluntary organization in the United States. Clara Barton, who founded the organization in 1881, invented the system of disaster relief still in effect today, rushing medical assistance and supplies to victims of natural disasters. For 75 years, the Red Cross has trained the public in life saving techniques and first aid. In war time, Red Cross nurses have been at the front lines, caring for the wounded, and through its war efforts, the Red Cross developed the largest blood donation and distribution system in the world. Today it collects more than half the blood used in American medicine. The Red Cross is chartered by Congress, but although its mandate comes from the federal government, its money does not. Red Cross funds come from direct and sometimes poignant appeals to the public. Most of the money raised by the Red Cross has gone towards its humanitarian projects, but a small percentage has paid for the organization's staff. Grace Frazier joined the Denver office in 1930 for a salary of $85 a month. It was during the war, a time she says when employees gladly worked long hours for low pay.

GRACE FRAZIER, Red Cross Retiree: I was office manager and we could not find anyone to clean the, to do the cleaning. So I was young and eager, and I went down early every morning and dusted the dust and shoveled snow if there was snow, and then I would wash my hands and sit down at my desk and be the office manager the rest of the day. That's the way we all operated. Whatever was to be done we did.

MS. HUNTER-GAULT: Grace Frazier was earning $900 a month when she retired in 1969 to a pension of about $200 a month. She now nets just over $400, the average amount received by the Red Cross's 5600 retirees. But even with Social Security, it's no longer enough for Grace Frazier to make it on her own.

GRACE FRAZIER: Below poverty level is not exactly a happy thing to be. And I'm one of the lucky ones, because I have a caring family and I'm actually subsidized, but a lot of people don't have that.

MS. HUNTER-GAULT: Although Grace Frazier's pension has not kept up with the cost of living, the Red Cross pension fund has done very well. It now has assets worth $730 million, $400 million more than needed to pay out promised benefits. Recently, Red Cross retirees were surprised to learn that the Red Cross wants to get hold of the extra money, money they thought was theirs.

GEORGE MOODY, Chairman, American Red Cross: The excess assets currently locked in the retirement system will be freed for more productive use.

MS. HUNTER-GAULT: In the 1980s, the unprecedented boom in the stock market, where pension plans are leading investors, inflated the surplus of many plans. By law, all the money in a pension plan is to be used exclusively to benefit participating workers, retirees, and former employees vested in the plan. In the Red Cross's case that covers about 35,000 people. But because of a loophole, a company can terminate its pension plan at any time, and once a plan is terminated, the company must pay out only what has been promised up to that point. Funds above and beyond those liabilities are considered a surplus and revert to the company. For example, when a German food conglomerate bought the A&P supermarket chain in 1980, it shut down the pension plan and scooped up $270 million in surplus funds. When Texaco bought the Getty Oil Company in 1984, it siphoned $360 million out of Getty's pension fund. In 1986, the Exxon Corporation set a record by extracting $1.6 billion from its $1.8 billion pension plan. Karen Friedman is Education Director of the Pension Rights Center in Washington, D.C., a non- profit group that lobbies against pension plan terminations.

KAREN FRIEDMAN, Pension Rights Center: Since 1980, about 2000 companies have drained nearly $20 billion out of this nation's pension plans. A lot of that money has gone to finance takeovers and leveraged buyouts and corporate purposes that have nothing at all to do with the retirement income needs of workers and retirees. Maybe Red Cross isn't using this money for a takeover, maybe it's not using it for a leveraged buyout, but the reality is it's using it for organizational purposes that have nothing to do with the retirement income needs of its retirees.

MS. HUNTER-GAULT: The Red Cross is the first major non-profit organization to announce a termination of its pension plan. Following common practice, it intends to buy insurance company annuities to provide retirees with the same monthly check they would otherwise receive from the pension plan. While some of the surplus will be used for related benefits for retirees, $100 million will go towards Red Cross projects. That outrages many retirees who'd rather see big increases in meager pension checks. James Hickey was vice president of Midwestern operations when he retired in 1984, after 33 years with the Red Cross.

JAMES HICKEY, Red Cross Retiree: This business of going through loopholes and all that which corporate America is doing now to rip off the pensioners, none of us ever dreamed that would happen in the American Red Cross.

MS. HUNTER-GAULT: James Hickey attended their association's annual meeting in Florida last month. For many of them, it was the first time in their lives that they found themselves at odds with the organization they call family. Chairman of the Board George Moody flew in from California to try to get them to see things his way. Moody told the group that contributions to the pension plan had originally come from public donations and that the huge surplus could hurt future fund-raising.

GEORGE MOODY, Chairman, American Red Cross: But the board was very much afraid of the message of the huge pension fund overhanging the Red Cross and how the American public would view that. What if we did have a big earthquake in California, the kind of disaster they've had in Russia? I can tell you the Red Cross would exhaust all alternatives to provide service to the communities, and it would be a terribly difficult thing for me to stand up and justify a 400 million unneeded reserve when we have people out there suffering.

MS. HUNTER-GAULT: But Moody's audience didn't buy that argument.

RED CROSS RETIREE: Let me remind you there was a failure of the board to execute its fiduciary responsibility based upon the understanding the old folks in this room had when they put their money into it. Those were our dollars. They were hard earned dollars and now you're paying out 28 cents on the buck.

GEORGE MOODY: Well, you know, I guess we will never get together if we get to the point where we say, hey, that 400 million belongs to us.

RED CROSS RETIREE: Who does it belong to?

GEORGE MOODY: It belongs to the American public. That's who it belongs to. [BOOS FROM CROWD]

RETIREE: I can see that there might be some reasonable attribution of ownership to the American public. They contributed to make it possible to hire us, but they weren't aware that they hired us at a very very low low pay. I am proud that I spent my years with the Red Cross, but I'd like that pride to continue for the remainder of my life, however long that may be. It might get me a bigger share.

MS. HUNTER-GAULT: So whose money is it? That question is at the heart of the emotionally charged debate over the future of the nation's private retirement system.

MS. HUNTER-GAULT: Here to debate the question of who should get excess pension money is Sen. Howard Metzenbaum, sponsor of a bill requiring companies to allocate to retirees what he calls a fair share of pension over funding. He joins us from Capitol Hill. Peter Kelly is a member of the U.S. Chamber of Commerce and sits on the organization's Health and Employee Benefits Committee. Mr. Kelly joins us from Chicago. Starting with you, Sen. Metzenbaum, whose money is it?

SEN. HOWARD METZENBAUM, [D] Ohio: [Capitol Hill] Well, I think it belongs to the retired employees and to the present employees and if there is a tremendous surplus, then I think part of it reverts to the employers. But what has been happening in the past is that all the money is being taken out by the employer and frankly I just think that's totally unfair, it doesn't recognize the contribution that these employees have given to the company over a period of many years. That's not really the American way to do it.

MS. HUNTER-GAULT: Is the Red Cross case special, because as you've just heard the retirees, some of them point out they made financial sacrifices to work for a non-profit company, or do you think the protection should extend to all workers?

SEN. METZENBAUM: I think it should extend to all workers. I think the Red Cross case is somewhat unusual in that these were employees who probably were underpaid during the entire period that they worked, I think they have an understandable claim that they ought to be getting all of the money, but I should point out that under my bill that isn't the requirement that we make. We provide for a setaside of enough money to take care of a onetime cost of living adjustment for the retired employees, we then have a 25 percent of the surplus that would be set aside for future inflationary increases, and the balance we say the employers can take out. Notwithstanding that, the employers are putting on a full core press in order to beat this legislation. I'm hopeful the administration will recognize the inequity of the situation, but unfortunately, as of May 1st, they're going to release $8 million of new money in these pension terminations to about 50 employers, and then there's a whole group of 600 other pension terminations that are following behind, and that will mean more dollars taken away from the retired employees.

MS. HUNTER-GAULT: All right. Let's review some of those specifics in a moment, but let me just ask Mr. Kelly whose money do you think it is?

PETER KELLY, U.S. Chamber of Commerce: Well, with all due respect to the Senator, the Senior Senator of Ohio, I've got great respect for his diligent efforts on behalf of employees. But the fact of the matter is for 50 years it has been settled law that when an employer establishes a defined benefit pension plan, that the employer retains the right to recover any moneys remaining after the plan has reached the end of its life cycle and all benefits have been paid.

MS. HUNTER-GAULT: Now you mean by defined benefit. . .you mean. . .

MR. KELLY: A defined benefit plan, as the name implies, is the type of plan where the employer promises an outcome, an ultimate benefit usually determined pursuant to a formula that may relate to compensation, years of service. In that type of a plan, an employer must come up with additional contributions when earnings are less than expected and must, has the advantage when earnings are greater than expected of being able to reduce contributions, and in the event that the plan terminates recover moneys remaining after all promises have been kept.

MS. HUNTER-GAULT: Well, you just heard the Red Cross retirees say that much of the money in the excess funds were the result of their own deferred wages. Why shouldn't they be able to get their fair share of what's now in the fund?

MR. KELLY: Grace Frazier from the opening segment is not typical of American workers. For every one Grace Frazier in the example we see with the Red Cross of a relatively low paid voluntary or semi voluntary work force, there are hundreds of steel workers and auto workers and railroad workers who have a well funded pension and actually have a higher standard of living in retirement than during their working years. In that type of a situation where an employer has funded a generous benefit, I think the issue becomes which generation benefits from the excess, the retirees, or the active workers,who may benefit from a substitute defined contribution plan or from reinvestment in the enterprise.

SEN. METZENBAUM: Charlayne, may I interrupt for a moment?

MS. HUNTER-GAULT: Yes, Senator.

SEN. METZENBAUM: I respect Peter Kelly's point of view, but I disagree with it. And the reason I disagree with it is that sure, some pensions are adequately funded and people do receive very adequate amounts, but the fact is that there are literally hundreds of them, thousands of them, who are getting a bare pittance. We've had people who've come before us and said this is just unfair. We've had people who thought they were going to get a certain amount and when it came time to get it, the company said no way and they just took the dollars away and they were left with $180 a month, $200 a month, $220 a month, and that's obviously impossible to live on that kind of money. And you have to understand, these are the good people. These are the people who have worked and given of themselves for ten, twenty, thirty years, thirty-five years. Ms. Frazier, 29 years she worked for Red Cross.

MS. HUNTER-GAULT: Mr. Kelly, how do you respond to that, that there are a lot more people than you've said?

MR. KELLY: Those are very compelling, compassionate arguments, but they don't address the fact that the promise even in those plans has been kept. The problem in those plans may be inadequacy of the promise. But fundamentally, when you look at plans in the post war period, defined benefit plans have been the engine that has driven retirement savings. The unfortunate fact is that in the effort to protect pensioners, Sen. Metzenbaum has become the spokesman of a position that is resulting in a dramatic drop in the net formation of defined benefit plan.

MS. HUNTER-GAULT: How so?

MR. KELLY: What used to be in the pre-ERISA period...

MS. HUNTER-GAULT: ERISA?

MR. KELLY: That's the Employee Retirement Income Security Act of 1974. During that period, there was a stable 55 percent of new plans each year that were of the defined benefit variety. These are plans that work best for older employees, and they were the work horse of the post war retirement savings era. Since ERISA, after an initial dramatic drop in defined benefit plans, it stabilized around 35 percent. Still, a very important and probably because of participation levels the most important source of retirement savings for older employees, but in three recent years, years in which Sen. Metzenbaum is advocating what is really essentially an asset grab.

SEN. METZENBAUM: No asset grab, employers have no asset grab, Peter. Now come on. The asset grab is taking place by the employers who are ripping off these dollars. Don't tell me that these retired workers are looking for an asset grab. They're looking for equity and fairness and decency on the part of the employers and they've given of themselves and they're entitled to it, but don't call it an asset grab.

MR. KELLY: Senator, that's clearly your point of view. I have a different point of view instead of the employers of this country and they're voting with their feet.

SEN. METZENBAUM: Many of the employers feel that the employees are entitled to fair consideration. Some employers have been rapacious, greedy, anxious to get these dollars, and many of them have occurred after leveraged buyouts, after takeovers of corporations, and they haven't had any real feeling for the workers who have given of themselves to the company. Most employers. . .

MS. HUNTER-GAULT: What about that, Mr. Kelly, how do you respond to the argument that these companies are just tools in corporate takeovers, that the money should be used for the retired employees but instead they're being used in things that have nothing to do with the employees?

MR. KELLY: That simply doesn't explain the trends that we've been seeing, the trends that have dropped from this 35 percent level down to around 15 percent, and it's been in response to Sen. Metzenbaum's attempts to close the door on reversions. Employers who never would have thought of terminating their plans are terminating their plans in order to recover the excess, to protect the rights of their shareholders who by and large are pension plans, themselves.

MS. HUNTER-GAULT: Sen. Metzenbaum, what is it exactly that your plan would do?

SEN. METZENBAUM: My plan would take this surplus, it would take 25 percent of it and set it aside as a cushion for future cost of living adjustments and to protect the workers who are presently working. It would provide a certain amount of dollars in order to provide a onetime, onetime cost of living adjustment for retired workers, and then it would permit the employers to take the balance of the surplus. I think that's fair.

MS. HUNTER-GAULT: Mr. Kelly, why isn't that fair?

MR. KELLY: First of all, that's a gross oversimplification of the provisions of the bill. That is one possible outcome for one possible situation. There are two other situations, one of which is a 35 percent cushion, and re-establishment of a plan like no other plan I know of no other employer maintaining, and in addition to that is a third alternative which turns the reliance of employers on its head, the 50 year reliance, and says that if you go out of the retirement system, the defined benefits system, that you will lose entirely the excess assets.

MS. HUNTER-GAULT: And why would that hurt companies?

MR. KELLY: It will hurt companies because they've prudently and carefully over funded in order to satisfy stricter and stricter funding rules. They've obeyed the rules. These aren't the companies who have maintained thinly funded plans and dumped them on the system. These are employers who have met their promises and because of changes in basic business structure, basic business philosophy, possibly a total redirection in the benefits structure, moving to health benefits, or. . .

SEN. METZENBAUM: Peter, won't you agree that many of these have occurred as was earlier mentioned, when the Germans came in, they bought up A&P Company, they took out more from the terminated pension plan than they paid for the entire company. When Texaco terminated the plan, they took out hundreds of millions of dollars

MS. HUNTER-GAULT: Briefly, Mr. Kelly, respond.

MR. KELLY: Senator, as you well know, because you voted for the bill two years ago, what A&P did was ruled out of order. The legislation was passed that prevents an amendment of that type. There are takeover problems but they can be addressed largely through fiduciary rules.

MS. HUNTER-GAULT: Mr. Kelly, are you going to fight Mr. Metzenbaum's bill? Does it have a chance?

MR. KELLY: You bet you we're going to fight his bill.

SEN. METZENBAUM: Let me say this, Charlayne. That's been one of the problems of the U.S. Chamber of Commerce, and that is instead of coming in and sitting down and negotiating a reasonable solution that has fairness and equity to the retired employees, to the present employees, and to the corporation, instead of that, the companies just want to take all the money for themselves. I just don't think that's right. We're prepared to negotiate; we're prepared to be reasonable.

MS. HUNTER-GAULT: Are you prepared to win this one?

SEN. METZENBAUM: I'm prepared to win this one and frankly, I'm very optimistic during this session.

MS. HUNTER-GAULT: All right. Well, we'll see what happens. Sen. Metzenbaum and Mr. Kelly, thank you both for being with us. ESSAY - SANDS OF TIME

MR. LEHRER: This month marks the 50th anniversary of the publication of the Grapes of Wrath, John Steinbeck's classic novel about people driven out of the Midwest by the drought and dust storms of the 1930s. Our essayist, Jim Fisher of the Kansas City Times, has some questions as another season of drought threatens the Kansas wheat fields.

JIM FISHER: The wind came last month out of the North, fifty, sixty miles an hour or more, churning up a brown haze across parts of the Great Plains. You had to turn your car lights on at midday. Visibility some places here in Kansas dropped to zero. People died, rear end collisions in the blinding dust, and of course, there was the wind, whole winter wheat fields were blown away. It was the worst such storm in 30 years. The wind was nothing new. It comes every spring, trying to rearrange the soil of this huge, sparsely populated land. But the wind coupled with the drought. . .and make no mistake. . .drought still holds this part of America in its grip. . .made people wonder and remember how would we, 1980s Americans, react if the land blew away again like it did in the 1930s, if the so-called "black rollers" darkened first the horizon and then the whole sky, if the incessant wind cut newly sown crops to ribbons, if the dust first piled against the out buildings, thenMNEIL crept beneath the window sills, and under the doors, and finally into the food on the table, and if most of us were a hair breath away from economic ruin. The old pictures taken by the Farm Security Administration are uncomfortable reminders of what nature is capable of doing to people's lives. Those pictures of the Okies, a lot of whom are Kansans, making their way from the Middle West to California, are an indelible part of our national memory, the dirty-faced children, the tired women, the forlorn men, the cardboard shacks, the endless roads. Here in Anthony, Kansas, by the Oklahoma border, are other pictures, ones the FSA didn't take. They were commissioned in the early 1930s by O.R. Brooker, the Ford dealer here then, who figured some local endorsements might stop his showroom floor from looking like a funeral home. He sent a stand 'em up and shoot 'em photographer out to take pictures, then got folks to write letters on how they liked their Fords. Then he pasted them all in scrapbooks. The letters were stock, Ford's got good mileage, were reliable and rode well. Sound familiar? But forget the words. Look at the faces. These are the portraits of the majority, the people that stayed, the ones who held on to a job, who managed to save the family farm, who didn't trade 600 acres of land for a car to join the trek West, the farm couples who hitched p their teams to pose alongside their cars, and didn't bother to shoe their chickens away from the picture, the guy who ran the local bus line to Harper, Kansas. He used a Lincoln. Naturally, it was black; Doc Galloway, who said his Ford always got him out in the country to deliver babies. That's a hoot now. Ralph Gibson and his wife with their new baby, swaddled as was the custom then, one probably delivered by Doc Galloway too. Earl Clement and his new wife just back from their honeymoon in their new Ford, looking not at the camera but each other, people peering into the camera, yet people with tired faces, people barely hanging on. What of us now? Would we look in the camera, then go about our business and try to do our best? Would we persevere like most of our grandparents and great grandparents did against the eternal wind of the great plains, or would some of us run screaming for the government? Would we sue somebody, anybody, would we curse our fate, the weather, the politicians, our neighbors, and, of course, the dust choked air conditioner? Now you wonder as the land gets drier and drier, as the wheat shrivels and as the wind blows. RECAP

MS. HUNTER-GAULT: Once again, Friday's top stories. President Bush announced that the U.S. will develop a controversial jet fighter with Japan, NASA scrubbed the launch of the shuttle Atlantis moments before lift-off because of an engine pump problem, and the government's main index forecasting economic growth dropped for the second consecutive month. Good night, Jim.

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