The NewsHour with Jim Lehrer

MS. FARNSWORTH: Good evening. I'm Elizabeth Farnsworth. Jim Lehrer is away. On the NewsHour tonight, the U.S. threatens trade sanctions against China, we have two views; cutting the federal housing program, Sec. Henry Cisneros and Congressman Rick Lazio square off; gay marriages and the law, Spencer Michels reports from California; and a Newsmaker interview with outgoing diplomat Robert Gallucci. It all follows our summary of the news this Wednesday. NEWS SUMMARY

MS. FARNSWORTH: President Clinton and Senate Majority Leader Dole offered today to end the stand-off over the gas tax and the minimum wage. Republicans want a Senate vote on repealing a 4.3 cent a gallon gas tax. Democrats want a vote on a provision to raise the minimum wage. The President said he would do his part as long as the bills were clean or free of objectionable amendments.

PRESIDENT CLINTON: If they want a temporary reduction in the gas tax, the way to do it is to end the log jam, give us a clean vote on the minimum wage increase. We should increase the minimum wage and increase--and pass their temporary reduction of the gas tax. I am offering a way to break the log jam. I will be glad to sign both bills. They ought to vote them out clean. At least they should give us a clean vote on the minimum wage. That's what I think should be done.

MS. FARNSWORTH: Sen. Dole said it was up to Senate Democrats to end the gridlock.

SEN. BOB DOLE, Majority Leader: I ought to just say to the President we'll continue to send you common sense legislation but it's very difficult when the President's own party ties up the Senate floor. The President talked about separate votes on minimum wage and separate votes on gas tax repeal. And finally, after three or four tries, he said he would sign the gas tax repeal. So I wish he would talk to Sen. Daschle and others. Sen. Daschle I think was quoted saying yesterday he was going to shut this place down. Now that doesn't appear to me to be President Clinton's view.

MS. FARNSWORTH: Also today, Republican Congressional leaders held a news conference to announce their 1997 budget plan. The plan is slightly closer to President Clinton's spending priorities. It would provide somewhat more money for Medicare and Medicaid. It calls for 122 billion dollars in tax relief. Republicans say their plan would balance the budget by 2002. At the White House today, Spokesman Mike McCurry threatened stiff sanctions against China for copyright violations. The U.S. has given China until May 15th to prove it is complying with its promise to stop pirating American music, movies, and computer software. U.S. Trade Rep. Lee Sands will travel to Beijing this week to deliver the threat of sanctions personally. The Chinese have said they will retaliate against any U.S. sanctions. We'll have more on this story later in the program. In the House today, members voted along party lines to create a special subcommittee to investigate Iranian arms shipments to Bosnia. Republicans claim the Clinton administration hid information about the shipments from Congress. At the time, there was an international embargo on supplying arms to the warring factions in the Balkans. Democrats said creating the committee is a political gambit to embarrass the administration. Debate on the House floor was heated.

REP. PORTER GOSS, [R] Florida: I am deeply concerned about the long-term impact of allowing an outlawed terrorist nation, which Iran is, to establish a presence in Bosnia. This goes beyond foolish policy to increased national security risks, and it is not a matter to be taken lightly by this Congress. We need the truth from the White House, and we need the whole truth this time.

REP. PAT SCHROEDER, [D] Colorado: We have done away with the committee on drugs. We have done away with the committee for seniors. We've done away with the committee on hunger, children, youth, and families. Apparently those aren't issues anymore. We don't have enough money to spend on those issues. But we can now have the fourth investigation on Bosnia, the fourth. That doesn't make any sense to me.

MS. FARNSWORTH: In Israel today, the government criticized a United Nations report released Tuesday, saying allegations Israel might have deliberately fired on a UN base near Qana, Lebanon were "absurd." The attack occurred last month during a series of cross- border attacks between Israel and Hezbollah rebels. We have more in this report from James Mates of Independent Television News.

JAMES MATES, ITN: It was the bloodiest incident in two weeks of fighting in Southern Lebanon, 102 people killed by Israeli shells as they took shelter with the United Nations, most of them women and children. The Israelis insist it was a tragic mistake. An official UN inquiry has concluded that was unlikely.

MAJ. GEN. FRANK VAN KAPPEN, UN Military Adviser: From the evidence we found on the ground, it is highly unlikely that it is caused by a sequence of procedural and technical errors; however, we cannot exclude it completely.

JAMES MATES: It's a charge that has been angrily rejected by Israel.

EHUD BARAK, Foreign Minister, Israel: Ultimate responsibility is, we believe, is still with the Hezbollah, who used the UN installation to cover their shooting.

JAMES MATES: It's been alleged the Israelis knew there were civilians in the camp, especially after the discovery of this video evidence that they had an unmanned reconnaissance aircraft in the area. The Israeli army today showed journalists the pictures that were beamed back from that aircraft proving, they said, that it didn't arrive until after the shelling, and anyway, they say the weather was so wet and cloudy they could see almost nothing. Israel accepts its responsibility for this incident. What it can't accept is any suggestion it may have deliberately killed civilians.

MS. FARNSWORTH: In Washington today, a State Department spokesman joined Israel in criticizing the United Nations report, saying the UN had not assigned enough responsibility to Hezbollah.

NICHOLAS BURNS, State Department Spokesman: We are highly disturbed that the United Nations would issue a report that did not include, did not incorporate the views of the Israeli government, even though Israeli government officials were questioned, and I think you know that we think that this tends to polarize the situation and not heal. And frankly, they look at an incident, which had several actors. They isolate one of the actors, totally forget about another actor, in fact, the group that fired the rockets that attracted the Israeli fire. It just seems a little one-sided to us.

MS. FARNSWORTH: Envoys to the UN from Egypt, Bahrain, and Lebanon said the report did not go far enough because it did not condemn Israel. A UN spokesman responded today, saying the report must be objective if critics on both sides are unhappy. South Africa got a new constitution today. The country's constitutional assembly voted 421 to 2 in favor of the 150 page document. President Nelson Mandela joined delegates and onlookers celebrating afterward at a ceremony outside the parliament building in Cape Town. The new constitution guarantees equal rights for all citizens and calls for a majority rule government. Its adoption marks the completion of South Africa's transition from apartheid to democracy. In Ghana today, a one-day summit on ways to end the Liberian civil war was called off because most West African heads of state failed to attend, so did two leaders of one of the warring factions. Liberia's six-year-old civil war reignited last month when rival militias began fighting in the streets of the capital Monrovia. That's it for the News Summary tonight. Now it's on to considering sanctions against China, cutting the federal housing program, gay marriages, and diplomat Robert Gallucci. FOCUS - SANCTIONS

MS. FARNSWORTH: First tonight, the latest flash point between the United States and China. This time the issue is China's alleged piracy of copyrighted songs, software, and books, and the threat of American retaliation. We start with some background.

MS. FARNSWORTH: This was the scene in Beijing last year right after an accord was reached between the United States and China on intellectual property. The Chinese had promised their factories would stop reproducing American software, videos, and compact discs without payment to the copyright owners. This crushing of CD's was China's signal that it would comply with that agreement. U.S. Trade Negotiator Charlene Barshefsky and Chinese Trade Minister Wu Yi toasted each other in Beijing, and in Washington, Special Trade Representative Mickey Kantor made the official announcement.

MICKEY KANTOR, U.S. Trade Representative: [February 1995] With today's important agreement, China has committed itself to put in place practices that will both protect our rights and normalize access to its market for U.S. products.

MS. FARNSWORTH: But yesterday, the White House said that there is new evidence that Chinese factories are continuing to produce pirated American products and the administration said it is considering imposing trade sanctions in retaliation, perhaps new tariffs that would cost China as much as $2 billion. The complaint was the latest incident in an increasingly strained relationship between the two countries. In recent months, there have been sharp exchanges over China's human rights record, shipments of weapons, and nuclear materials to Pakistan and Iran, and over China's efforts to intimidate Taiwan.

PRESIDENT CLINTON: Today I would like to announce a series of important decisions regarding the United States policy toward China.

MS. FARNSWORTH: And this strained atmosphere coincides with the annual renewal of Most Favored Nation trade treatment for China. A congressional vote on MFN is due next month. On the intellectual property issue, the administration's threat of sanctions brought counter threats from Beijing. Officials said China would retaliate against U.S. businesses if Washington imposed sanctions. President Clinton met with top advisers this afternoon to discuss the matter, and throughout the day, political figures spoke out.

MIKE McCURRY, White House Press Secretary: China is very aware that May 15th is the deadline that we have for taking action with respect to China's obligations related to international-- intellectual property rights. Umm, we've made some progress in our discussions, and we've made some progress in their handling of these issues, but since the agreement has been signed with China, we still don't believe we're seeing the type of enforcement that's necessary to comply with our own concerns.

MS. FARNSWORTH: Other administration officials expressed hope sanctions could be avoided.

WARREN CHRISTOPHER, Secretary of State: With respect to the intellectual property issues, last year an important agreement was worked out between the United States and China. It's important at that meeting that that agreement be faithfully implemented. We've had discussions with, with the Chinese at this point, we're disappointed with, with compliance, but those discussions are ongoing.

MS. FARNSWORTH: And for Congress, there was support for strong action from the administration.

REP. NANCY PELOSI, [D] California: The piracy has worsened, so it's time--enough is enough--it's time for the talking to stop and for us to take some actions to protect our intellectual property.

MS. FARNSWORTH: The administration has given China until May 15th to respond to the complaints about piracy of intellectual property.

MS. FARNSWORTH: Now for two perspectives on possibly U.S. sanctions against China, we turn to Robert Kapp, President of the U.S./China Business Council, an organization of American companies doing business with China, and Robert Holleyman, President of the Business Software Alliance, a group that represents major computer software companies. Thank you both for being with us. Mr. Holleyman, let's get specific. What are we talking about here? How- -what is pirated and how?

ROBERT HOLLEYMAN, Business Software Alliance: Well, we're talking about a staggering problem. U.S. computer software companies estimate that only one out of every fifty computer programs in use in China today is a legal copy. The rest are counterfeits or illegal copies. It's a staggering loss to the industry.

MS. FARNSWORTH: And we're talking about many, many millions?

MR. HOLLEYMAN: Many, many millions of dollars. We estimate that there are losses approaching $500 million a year to the U.S. business software industry alone. Chinese factories have a production capacity of more than 100 million units of CD's and CD ROM's each year, the vast majority of which are counterfeit.

MS. FARNSWORTH: How is this done? How is the pirating accomplished?

MR. HOLLEYMAN: The pirating is done quite simply by taking a master of a legal product, setting up a factory that simply duplicates on a 24-hour basis counterfeit products. We have nearly twice as many counterfeit factories operating in China today as we had simply two years ago.

MS. FARNSWORTH: Who owns these factories?

MR. HOLLEYMAN: A variety of ownership. Some, it's been alleged, are joint ventures with foreign entities; some, it has been alleged, have affiliations with China officials. It varies from case to case. What we do know, however, is that the production capacity in those factories far exceeds any legitimate need for computer programs within China.

MS. FARNSWORTH: So you're--in other words, they're being exported too?

MR. HOLLEYMAN: Absolutely. The difference today from where we were a year ago is that the piracy problem of computer software has grown, and it is no longer simply a domestic problem within China, but, indeed, these factories are putting out a tidal wave of counterfeit products that are being exported around the world. They're displacing the otherwise legal sale of U.S. computer programs in places like Hong Kong. Indeed, we picked this up on the streets of Moscow. Some of it's coming into the U.S.. It is an export industry for China at this point in time.

MS. FARNSWORTH: And what do you see if you're on the streets? What do you see? You have something there that you got in China, right?

MR. HOLLEYMAN: I did. When I was last in Beijing, uh, I went to one of the software shops that was advertised quite openly in the press there. What I purchased was a compilation CD-ROM. It is a CD- ROM that contains roughly 40 computer programs, most of which are major U.S. computer programs like Adobe Photo Shop, like Lotus Notes, Microsoft Windows, plus some Chinese programs. These are 100 percent counterfeit. We estimate that the commercial value of these products alone is $20,000 U.S. roughly. I bought these on the streets of Beijing for less than $10 U.S..

MS. FARNSWORTH: And because of all this you think that threatening sanctions is warranted now?

MR. HOLLEYMAN: I think that the U.S. has no alternative but to threaten the imposition of sanctions to offset the losses to U.S. companies in China.

MS. FARNSWORTH: Mr. Kapp, what do you think about this?

ROBERT A. KAPP, U.S.-China Business Council: Well, Robert's pointed out a very very serious problem in international business. Counterfeiting is easy. It's technologically relatively simple. The problem is not confined to China, but, as he says, the problem with China is huge. American law provides the administration, any administration, with a series of mandates and tool with which to try to, to negotiate an end to such practices in other countries and the very end of that process provided in American law, if everything else fails, is the imposition of sanctions. American businesses generally understand whether in Robert's field or not that intellectual property protection is the central component of modern international and global trade and commerce and understands that very, very well. It is important, however, to note that if and when you get to the point of actually imposing sanctions-- and, remember, we're not there yet--

MS. FARNSWORTH: Are you worried that we're threatening a bit too soon?

MR. KAPP: No, not really. The White House is expected in the next few days to bring out a list of those Chinese products on which it plans to raise tariffs very high unless an agreement is reached. And by American law, a 30-day period of public discussion of that list must ensue during which time the list may be modified. Some American businesses may say, please, take this particular Chinese product off the list because if we can't get sources in China for that, our business will fold, and there will be argument about which product should be kept on and which should be taken off the list. But if the negotiations in China do not go forward, a final list will be put out 30 days or so later, and ultimately, then tariffs would be raised. I think my point is that we all understand. The U.S. Trade Representative's Office and the President, we all understand, that if and when sanctions are levied and imposed, the United States wins but also loses because it is very, very predictable that the other side, no matter what country, that the other side will then levy sanctions of its own against American exports going into China. That's what the term trade war really comes down to, the kind of mutual heaving of punishments of one another. And when the sanctions come back to roost here, then, of course, other sectors of the American economy will take a hit as well. It's not, it's not a pleasant prospect I think for anybody in this entire dispute.

MS. FARNSWORTH: Have sanctions worked before?

MR. KAPP: Sanctions are a tough call. The general wisdom on sanctions is this: Unilateral sanctions are less effective than multilateral sanctions, after all, in many ways now, although--

MS. FARNSWORTH: And this would be a unilateral sanction.

MR. KAPP: This would be unilateral, although this is a sector of the American economy where the Americans really do distinguish themselves. In many sectors of economic life, the fact that the United States refuses to sell a certain product to China, for example, would simply mean that the Chinese went and bought it from the Japanese or the Germans or the Dutch, the British, or somebody else. In the software and the--I might say not only the software but the entertainment products field, which is also very much involved in this intellectual property dispute--pirated videos of movies and so forth--these are areas where the Americans are really very much distinguished from their other foreign competitors, so unilateral sanctions, in theory, might have a little more sticking power, but usually multilateral sanctions are seen as more effective.

MS. FARNSWORTH: So what do you think--either of you--what do you think is happening here? Is this Machiavellian moves and counter-moves trying to get something so that the administration doesn't have to impose sanctions? Isthat what's happening?

MR. KAPP: Forgive me, Robert, for starting, but I think that is the case. We're a long way from the end of this process. I laughingly say that in U.S.-Chinese dispute resolution, it's the final taxi ride to the airport in which things really get done. A great deal of--a great deal of work has already been done, of course, but we're not at the end of the line yet, and the listing of, of likely sanctions is a stage in a highly choreographed ballet which ultimately is designed to lead to resolution, although we certainly can't guarantee that outcome.

MR. HOLLEYMAN: But I would like to note that every day that we wait U.S. intellectual property owners continue to lose in China. Estimated losses for the copyright industries alone are more than $2 billion last year. Those losses mount and they continue to mount until the U.S. takes decisive action.

MS. FARNSWORTH: So you representing the software alliance would be less likely to be as patient as you representing many other kinds of companies too?

MR. KAPP: Well, I think, I think that there comes a time when action needs to be taken. Amb. Kantor, when he was U.S. Trade Representative, spoke to a meeting of our U.S.-China Business Council in late January on this subject and said we're not setting date deadlines--this was late January--but we're not going to wait forever, and these negotiations need to move forward, and sometimes a date certain is the best way to impel a negotiation to a successful conclusion.

MS. FARNSWORTH: Do you think that this is being exacerbated by politics?

MR. HOLLEYMAN: Well, I think it is being exacerbated by politics within China because there the Chinese government has the capability, if it has the desire, to stop much of the counterfeiting that's occurring. We haven't seen the political will in China yet to deal with that issue. In the United States, I think that politicians in this country are rightly saying how much more of this can we take. There should be a point at which the U.S. is clear that an agreement was negotiated with China a year ago. It required China to do certain specific things, including shutting down the illegal factories, ensuring the Chinese government ministries were using legal software. They have not taken those steps. So I think political leaders in this country are rightly saying that the U.S. can no longer tolerate this sort of theft, this sort of piracy within China.

MR. KAPP: Well, Robert, Robert is right on all counts. I would only add to that that we, uh, we are--we've had a bad year with China, and they with us. A lot of things have gone wrong. The climate of trust between the two countries has largely evaporated. The sense that each country harbors ill intentions and motives towards the other is quite widespread now. Against that background, there is a certain tendency I think in each country to feel that, that accommodating the other side is politically risky at home. In particular, though, the thing that I think is of greatest concern is that we begin to lump all the different disputes that we have with China into one big mass and say, well, we have to do something. And it's important not to lose sight of the connection between action and effect. In the case at hand, one certainly can hope that if we keep focused on the IPR subject and not mix it up with everything else that we happen to disagree about that ultimately there will be response from China in the way that satisfies our requirements and our needs on IPR, intellectual property, but if we start saying, well, gee, we have to do something, never mind what the effect is, let's just take some action because we can't sit here and look weak, we could get ourselves into a real pickle.

MS. FARNSWORTH: Well, Mr. Kapp, Mr. Holleyman, thank you for being with us. FOCUS - ON THE BLOCK - HUD

MS. FARNSWORTH: Now we turn to an issue that surfaced during this presidential campaign, the future of federal housing programs. Margaret Warner has the debate.

MS. WARNER: Over the last few weeks, presumptive Republican Presidential nominee Bob Dole has been trying to define sharp differences between himself and President Clinton. Last week, his target was the administration's housing policy.

MS. WARNER: In a speech to the National Association of Realtors, Sen. Dole suggested that if he were elected President, he would dismantle the Federal Housing program as currently run by the Department of Housing & Urban Development.

SEN. BOB DOLE, Majority Leader: Public housing is one of the last bastions of socialism in the world. Imagine, the United States Government owns the housing where an entire class of citizens permanently live. We are the landlords of misery. Let me be clear. I believe the government has an obligation to maintain a safety net. These programs have failed in that mission. They have not alleviated poverty. They have not--in fact, they've deepened it, rather than alleviate it.

MS. WARNER: HUD Sec. Henry Cisneros concedes there are problems with public housing. But he argues there is still a role for the kind of streamlined housing agency he's been trying to create out of HUD.

HENRY CISNEROS, Secretary, HUD: [April 25] Our strategy has been simple. Invest in neighborhoods, invest in housing, invest in people. Give communities the opportunity to help themselves. Give the private sector the opportunity to re-engage in urban communities. This isn't social welfare redox.

MS. WARNER: Widespread public housing began in the 1930s in response to the appalling conditions in urban slums. At first, the idea seemed to work. There were long waiting lists for clean, safe apartments. But then in the late 1940s, construction of huge high- rise projects began and so did public housing's problems. The projects were dehumanizing in scale and often isolated from the rest of the community. What's more, changes in federal rules slowly pushed out the working poor as tenants, replacing them with the very poor, and in the worst projects with drugs and gangs as well. Congress created HUD in 1966 to try to bring some sense to federal housing programs, but despite success of attempts at reform, the problems did not significantly abate. Today nearly 5 million households depend on federal housing assistance. One quarter are conventional public housing. Three quarters rent private apartments with the aid of federal housing subsidies and vouchers. And the Clinton administration has proposed expanding the voucher program further. Many of HUD's large older structures now stand as empty ghost towns, waiting for demolition. HUD, meanwhile, has grown into a $20 billion agency, overseeing 200 different programs, from community housing projects to anti-discrimination enforcement. Sen. Dole's proposal would end all that. He wants to abolish HUD, transfer homeless programs to the Department of Health & Human Services, turn over enforcement of fair housing laws to the Justice Department, and replace all traditional public housing assistance with vouchers which tenants could use to subsidize their rent anywhere.

SEN. BOB DOLE: Housing vouchers, in my view, would enable poor Americans to choose where they like to live just like we do. If they've got a voucher, they can take it to you or somebody else and you can help them.

MS. WARNER: To discuss Sen. Dole's proposal, we're joined now by HUD Secretary Henry Cisneros and by Republican Congressman Rick Lazio of New York, chairman of the House Subcommittee on Housing and Community Opportunity and a Dole campaign surrogate on housing issues. Mr. Secretary, respond, if you would, to the thrust of Sen. Dole's attack.

HENRY CISNEROS, Secretary, HUD: The basic response is that his proposals are precisely what we have been trying to do for the last year and a half. We have proposed eliminating public housing as it exists and supplanting it with a system of vouchers where people can use their own judgment and choice and the discipline of the market place. Instead of funding housing authorities, funding buildings, we have proposed funding families, who can then make choices, including the choice to leave public housing. Unfortunately, the Congress didn't accept our plan for public housing last year, and in the intervening year has further cut the funding for the traditional voucher program where 1.2 million families live now by making it impossible for more families to use vouchers. So the Senator's plan for housing is probably something quickly put together for a speech at the realtors and not a well thought out housing strategy, certainly not one that has the support of the Republican Congress that eliminated or, or rejected the specific proposals that he made that day.

MS. WARNER: Congressman Lazio, how do you respond to that?

REP. RICK LAZIO, [R] New York: Well, what I would say is that the Senator is rightfully frustrated with the centralized bureaucratic model that is still clinged onto by this administration. I mean, we still have situations where housing authorities are chronically mismanaged, in many cases corrupt, and money continues to flow into those same housing authorities. He's frustrated with it. I'm frustrated with that. It's time that we stopped throwing good money after bad and focusing on individuals. We are doing a number of things, including giving people the ability to use vouchers for home ownership. I know Sen. Dole believes in boosting home ownership wherever possible. We are suggesting that people ought to be able to buy their public housing units, but I'll tell you, a lot of the things that have led to the disgrace that is public housing in some of our cities throughout our country is a result of the thirty or forty years of control in the House by the Democrats. And I think, you know, now people want to run away from that and say, well, uh, that wasn't the case. But, in fact, the Democratic Party was a party that created the preferences, the federal preferences, which had the result of concentrating poverty in certain developments. We are in the process of appealing that and substituting local preferences in its place. We need locally driven strategies frankly. We need to stress work and, and home ownership, hope. We are getting blocked at almost every stage by the Democrats in the House and the Senate from doing the reforms that need to be done in order to make public housing a place where people can transition back to the marketplace.

MS. WARNER: Okay. You've got a lot of things in there. How would you like to respond to that, Mr. Secretary?

SEC. CISNEROS: Well, really, I work close with Rick Lazio, and so my response is not a tit-for-tat Democrat-Republican response. What I'd like to say is that Rick Lazio has some very good ideas that he's managing in a bill this very afternoon in the House, and we have worked closely with other Republicans like Sen. Bond, and what we've put together is a coherent strategy that is right now at work. First of all, we're bringing down the worst of the high- rises. You saw demolitions in the clip. Thirty thousand units, which is almost--which is vastly more in--on our watch than the previous fifteen years or so, and so we're bringing down high-rises in Newark and Chicago and Atlanta, and, and cities across the country. Secondly, we're taking over the worst of the public housing authorities, whole housing authorities. We are now running the Chicago Housing Authority, for example.

MS. WARNER: And by "we," you mean HUD?

SEC. CISNEROS: I mean HUD. Chicago Housing Authority, we have a partnership in Detroit, a partnership in New Orleans, we've taken the worst housing authorities and basically said if they can't manage, we're going to take them over. And then we're following a bipartisan model that the Congressman referred to. We are attempting to change the rules to encourage working families to come in, to change rent rules so working families can keep their, their money and not be discouraged from work.

MS. WARNER: If a teenage son takes a minimum wage job--

SEC. CISNEROS: Or any family member. What happens is people then are discouraged from work. And finally, we are strengthening leases to screen out people with criminal histories and drug records and evict people, President-signed one strike and your out provision, so I think what's emerging really is, is, by and large, a consensus in a political year, we've got to sort of end up taking shots at each other, but by and large there is a consensus the present model hasn't worked, let's look at values like work and responsible raising of children and so forth.

MS. WARNER: Congressman, let me just ask you something though, because--

REP. LAZIO: I'd like to respond to some of that--

MS. WARNER: I know, and I want you to respond to that, but I want you to answer this one thing for me. Sec. Cisneros says you all are working together and there's a lot of common ground. Are you saying there isn't any and he's just wrong about this?

REP. LAZIO: What I'm saying is that quite often--and I have the utmost respect for Henry Cisneros, I think he's a wonderful person, very bright--but I'll tell you this administration and this Democratic--the Democrats in the House and the Senate do not stand for change. They are trying to block all reforms that we're trying to do over here in the House. The Secretary referred to the one for one replacement rule which, in fact, has kept us from demolishing buildings. Really, it was a Republican majority, this majority that eliminated that rule to allow for the demolition of 30,000 units out of 1.3 million units. At this very moment, we're arguing about the Brook amendment which Democrats in Congress and this administration continue to want to keep, which is a job killer. It is a disincentive to work. There are--

MS. WARNER: And what is that?

REP. LAZIO: That basically says that the day you go to work you- -your rent increases by 30 percent because rents are tied to, to income.

MS. WARNER: All right. Let me get the Secretary to respond to that. What about that one point?

SEC. CISNEROS: Well, as I said, there's a vast middle ground that we are together on. We disagree with Congressman Lazio on a provision where he would like to remove a measure, an amendment that Sen. Brook, a Republican of Massachusetts, put on housing about 20 years ago that basically says people ought to have to pay no more than 30 percent of their income. We don't believe that it is essential to the reform of public housing that we are trying to achieve that the poorest people should end up vulnerable to the possibility that they would have to pay more than 30 percent of your income. Every expert in housing, public or private, in the country says for people of all income about 25 to 30 percent is what you ought to pay in income. The risk is if Rick Lazio takes the Brook amendment off, that some public housing authorities in a quest for funds will raise rents and will really provide a terrible impact on the very poorest folks.

REP. LAZIO: Can I just respond to this? Because it's important.

MS. WARNER: Actually--

REP. LAZIO: The Brook amendment set rent not up to but at 30 percent, so the day you go to work if you begin to go to work, you pay more money in rent. That is a tax on work, so there's a lot of rhetoric about inviting work and having work incentives, but, in fact, the actions do not meet the rhetoric. They are still in the Washington bureaucratic model which says from downtown Washington we're going to impose all rules in our regulations on every city in the country, whether it's in Albuquerque, New Mexico, whether it's in New York City, or Chicago, and the result largely has been failure. In State Street in Chicago, there are 10,000 people with an unemployment rate that is virtually universal, and that's a model that this administration and the Democrats in Congress continue to support. We're seeing bring down those buildings, sell them if you must, give people the vouchers, and today on the floor, the Democrats in Congress are fighting us on it.

MS. WARNER: Congressman, all right--let's turn to that issue because we only have a couple of minutes. Mr. Secretary, I want to hear you both on this issue. Sen. Dole has said let's abolish all government-owned public housing, period, and do it all through vouchers. What about that idea?

SEC. CISNEROS: Last year, we proposed--

MS. WARNER: Do you support it?

SEC. CISNEROS: Yes. We proposed the idea that over time our proposal was seven years, we would give everyone a certificate with which they could find housing. It was rejected by the Congress last year, and so we ended up with a kind of a middle ground proposal which was to say, we'll bring down the worst and we'll move people. The fact of the matter is we're doing it, and, Rick, I'm sorry that you've taken the posture that you have today, because he knows better. We're bringing down 30,000 units right now. We're taking over housing authorities, and for Rick Lazio, a good friend, to say we're defending the, the State Street corridor on the South side of Chicago is just dead wrong. We're the first ones after Sec. Kemp and Sec. Pierce had 12 years--

REP. LAZIO: It was--

MS. WARNER: Let him finish.

SEC. CISNEROS: --first ones in 12 years to go to the State Street corridor, take over the Chicago Housing Authority, and begin to bring down the high-rises.

MS. WARNER: All right. Congressman.

REP. LAZIO: If I can just get about 1/3 of the time that you've given to the Secretary, let me respond to some of these things. Uh, first of all, they continue--the Secretary continues to support and the Democrats in Congress continue to support federal rules that impose on local communities, what percentage of people, what incomes will live in particular places. We have an objection today, for example, on the floor by the Democrats in the House that people should not have a sense of reciprocity. We have a provision in our bill that says people coming into public housing should sign a contract which states what steps they will take to move towards self-sufficiency and move back into the market place. We are trying to create mixed income opportunities, not warehouse poor people where 99 percent of the people are unemployed, there are no role models, there are no hope, gangs control the buildings, there's poor maintenance, and I would say to the Secretary, yes, they have taken over Chicago, no, they have not made substantial improvement. Those people are still unemployed. Those buildings are still vastly under maintained, and the only reason they have actually moved into some areas of Chicago and begun to take down buildings is for two reasons. One is because the Republicans gave them the authority to do that, which Democrats never gave a Republican Housing Secretary the authority to do, No. 1, and No. 2, mysteriously because Chicago is going to be the home of the Democratic National Convention.

MS. WARNER: All right. Congressman, I'm being told we have to leave it there. Thank you both very much.

SEC. CISNEROS: Thank you very much.

MS. FARNSWORTH: Still to come, gay marriages, and a conversation about diplomacy. FOCUS - GAY MARRIAGES

MS. FARNSWORTH: Next, gay marriages and the criticism they provoke. Republicans in both Houses of Congress today introduced a bill to keep states from being forced to recognize marriages of the same sex. The bill says that a marriage is defined under federal law as the legal union between one man and one woman and that a spouse must be someone of the opposite sex. Gay marriages have become a hot political issue this campaign year. Spencer Michels explains why.

SPENCER MICHELS: Dennis Edelman and Mark Minardi are on the verge of making their relationship official in a ceremony, not a marriage, at San Francisco City Hall. In this city, they and other gay couples have rights not granted in most other places. Since 1991, they have been able to register as domestic partners. They have visitation rights in hospitals if either is sick. Gays who work for the city are eligible for bereavement leave if their partner dies.

SPOKESPERSON: Marc E. Minardi and Dennis Q. Edelman.

MR. MICHELS: But recently, Edelman and Minardi got something else, a chance with nearly 200 other gay and Lesbian couples to have a symbolic wedding.

SPOKESPERSON: Dennis and Mark--conclude their short engagement of 30 years together.

MR. MICHELS: Same-sex marriages are illegal throughout the United States. In fact, the California legislature currently is debating a measure to ensure the state will not recognize any gay marriages performed anywhere, but in San Francisco, for $30, any gay couple can now have an official ceremony. Edelman and Minardi, who have been together for 30 years, were delighted that the city gave them this chance.

DENNIS EDELMAN: So it's a small step beyond domestic partnership. It's not the whole mile of providing heterosexual or marriage certificate, as heterosexuals would have. That's how I understand it. It's a very wonderful step. It's a small step, and that I'm really delighted to take it.

MARC MINARDI: We've been in a relationship for a long time, and our relationship is accepted by all of those who accept us, but it's important because there are political dimensions to recognizing gay relationships that it's about time that we consider.

MR. MICHELS: Those political dimensions were very much on the mind of Carole Migden when as a city supervisor she organized this mass ceremony. Shewanted to put pressure on the state legislature to which she has recently been elected.

CAROLE MIGDEN, California Assemblywoman: It's an act of defiance because here we believe in alternative relationships and loving, committed relationships. It's a way of supporting our domestic partnership and send a message. We're not here to stamp or ban gay marriages but to affirm people that are committed to stable, loving, enduring relationships.

SPOKESMAN: I will not by voting on this floor of this legislature ratify certain kinds of practices that I think are wrong.

MR. MICHELS: California is one of thirty-two states that considered strengthening laws against gay marriages. So far, five have passed such laws, fifteen have rejected them. The bills say that if another state legalizes those marriages, they won't be recognized elsewhere. The concern stems from a Hawaiian court case that may legalize gay marriages. That case started as a lawsuit by three gay couples who claimed the denial of marriage licenses by Hawaii was an act of sexual discrimination against them. Although Hawaiian couples of the same sex can live together and go through whatever celebrations they want, they thus far cannot marry. They are not eligible for the normal benefits that married couples enjoy, such as health insurance, joint income tax returns, child custody, and automatic inheritance. That constitutes discrimination, according to Matt Coles of the American Civil Liberties Union. He filed a friend of the court brief.

MATT COLES, American Civil Liberties Union: Once you create such an enormously important legal structure and say you only count, you're only next of kin, if you're married. Then it's discrimination to say to a whole category of people we won't let you get married even if you want to. We're not only going to keep you out of the symbolic institution, we're going to keep you out of this practical legal structure. That's what we say is wrong.

MR. MICHELS: The Hawaiian Supreme Court has ordered the state to prove that there is a compelling state interest in prohibiting same-sex marriages. If the state cannot prove that, then this couple, who are plaintiffs in the lawsuit, will win their case, and gay marriages will be legal. The court action set off intense debate in Hawaii, but the legislature recently killed all bills to outlaw same-sex marriage, so it appears that if the Supreme Court rules to allow those marriages, that ruling will stand. Demonstrations have grown heated and attracted the attention of mainland activists like Randall Terry of Operation Rescue.

RANDALL TERRY, Operation Rescue: Well, there are people who will tell you this is a Hawaiian issue. No, it's not. It's an American issue because the Constitution will require that we on the mainland have to honor these godless homosexual unions in all fifty states. We will never honor them. And, and Hawaii needs to not become the Sodom and Gomorrah of America. I don't believe the people of Hawaii want that.

MR. MICHELS: Back on the mainland, legislators in California and elsewhere are being warned by conservative lobbyists to take some action soon. The U.S. Constitution mandates that public acts by one state must be recognized by all. Some lawmakers are now looking for a way to exempt gay marriage from that provision. Lobbyist Randy Thomassen is alive with Forum on the Family.

RANDY THOMASSEN, Capitol Resource Institute: Here in California, we can imagine quite easily homosexual couples taking a trip to Honolulu, getting married, and then coming back here to the golden state saying recognize us, by the way, change your laws to teach our curriculum to children, and the taxpayers have got to support our lifestyle.

MR. MICHELS: A Southern California Christian group called The Report has produced this video, the ultimate target of the gay agenda, same-sex marriage. Thousands of copies have been sent to church members and legislators.

SPOKESMAN: When you can crack marriage and completely destroy the definition of it, you've just overturned all of society's moral structure.

MR. MICHELS: These groups look to Republican legislators like California assemblyman Pete Knight to fight gay marriages. He is sponsoring the bill, which has passed the assembly, which would keep California from recognizing them.

WILLIAM "PETE" KNIGHT, California Assemblyman: That's a significant departure from the basic family unit that we have been the center of society for thousands of years. It changes the concept, really, of marriage, and I think that's something that needs--the people need to understand and the people have to understand that that is being forced on them.

MR. MICHELS: With Democrats controlling the state senate, Knight's bill may never emerge from committee in this chamber. Sen. President Bill Lockyer says he considers the bill unnecessary and, therefore, more symbolic than substantive.

BILL LOCKYER, State Senate President: It's not serious in the sense of there's no current need for a law of this sort. Umm, it is serious in the sense that it provokes political passions and anxieties on both sides of the debate, and it's symbolically very important. My own sort of personal view is this--I'm not an advocate for any particular lifestyle, but it seems to me if people find happiness somehow in this crazy American society, we ought to let 'em be happy and, and not have government trying to prohibit and prevent that.

MR. MICHELS: For Dennis Edelman and Marc Minardi, passage of a law prohibiting same-sex marriages would be a further indication of society's intolerance of homosexuality, something they've been fighting a long time. They argued that gays contribute to society, they have good jobs and an active civic and social life and are entitled to the benefits of real marriage.

MARC MINARDI: We're teachers, we're in the military, we're your brothers, we're your sisters, we're everywhere, and we're part of society, and that, that is not going to go away.

SPOKESMAN: [ceremony] To be my lifetime partner, to love and cherish forever.

MR. MICHELS: San Francisco's mayor and most other officials were enthusiastic participants at the mass ceremony that officially joined Edelman and Minardi. Whether celebrations like this become real marriages anytime soon may depend on the Hawaiian supreme court and the fallout from its decision in courts and legislatures across the country. CONVERSATION - WORLD VIEW

MS. FARNSWORTH: Next tonight a conversation with the departing diplomat whose most recent assignments put him in the public spotlight, unusual for his profession. Charlayne Hunter-Gault conducts the conversation.

CHARLAYNE HUNTER-GAULT: Robert Gallucci joined the State Department in 1974 as a low profile career civil servant, but he leaves as a high profile ambassador at large, having negotiated the accord over nuclear reactors that averted a confrontation between North Korea and the United States. And most recently, he was responsible for the civilian rebuilding program in Bosnia. Last week, Amb. Gallucci left the State Department to become dean of the Georgetown University's School of Foreign Service, among whose alumni is President Clinton. Thank you, Mr. Ambassador, for joining us.

ROBERT GALLUCCI, Former State Department Official: Thanks for having me.

MS. HUNTER-GAULT: As you were leaving your post at the State Department, the United States was proposing new talks with North Korea to close the last front of the Cold War, the ultimate reconciliation. How do you see that going? Is that going to happen?

AMB. GALLUCCI: Uh, I can't predict the future, but I think the initiative was well timed. It comes at a time when we have been pretty successful at at least freezing and managing the threat that the North Korean regime had posed in the area of nuclear weapons. It comes at a time when North Korea is in--certainly in need of help internationally in terms of its economic situation.

MS. HUNTER-GAULT: Because its economy is in shambles, right?

AMB. GALLUCCI: It's economic is in shambles and also because I think the South Koreans certainly are prepared to engage the North Koreans, so I think the idea certainly was well timed. I think the concept of two plus two, where China and the United States would be available to assist in direct talks between the North and South, makes a lot of sense geostrategically.

MS. HUNTER-GAULT: Is this propitious in the same way that the collapse of Communism, the falling of--the falling apart, breaking up of the Soviet Union was, do you think?

AMB. GALLUCCI: Well, I think certainly one thing is true, is that the North Koreans are well aware of what's been happening over the last five or eight years. They are aware of just how isolated they are in any number of ways. Ideologically, their brand of Communism has no more reason to succeed than anybody else's does, and I just think that this is a good time if the internal situation in North Korea will permit for them to engage the South Koreans.

MS. HUNTER-GAULT: But Gen. Shalikashvili, chairman of the Joint Chiefs of Staff, recently said that North Korea was going to either explode or implode.

AMB. GALLUCCI: I guess my own view about that is that the North Korean people have over the last 40 years or so put up with an awful lot of economic hardship. They have a very special personalized political leadership. And I'm not predicting any collapse of any kind in North Korea. I think it's possible certainly, and there are hard times. I think it be prudent for South Korea, for the United States, for the international community to deal with North Korea in terms in which we see it now, and that is a state that can be quite a threat to the international community but also can be brought into the community.

MS. HUNTER-GAULT: I want to move on to some other part of the world that you've been very involved in, but you've been more up close and personal with the North Koreans than most, and have a reputation for being secretive and isolated. How did you find them and do you have any secrets that you can share about how we should deal with them in the future?

AMB. GALLUCCI: I think certainly in negotiations with the North Koreans I think anybody who's dealt with them would, would note that, yes, there is a difference in dealing with the diplomats who represent a government that has been so isolated, a society that is strange by almost any measure, and so one sees less of, of what is being the negotiating position when dealing with North Koreans than say virtually any other country on earth. It's difficult, in other words, to see into a negotiating position. One has to keep one's eye on the objective that we have in those negotiations and try to drive them to it. There's less of an opportunity, I think in other words to disaggregate a position when you do not know the opposition's structure. And the North Korean regime is as opaque as any in the universe.

MS. HUNTER-GAULT: And they remained that way when you were with them?

AMB. GALLUCCI: I, I think over 16 months we got to know them a lot better than we did at that first meeting in June of 1993, but I don't--wouldn't say that they have become less of a mystery overall than they were over those months.

MS. HUNTER-GAULT: And what about Bosnia, what do you--what is the hardest thing you think in the road ahead with Bosnia now?

AMB. GALLUCCI: I think first of all the point to be made about Bosnia is that the military portion of the effort to support a peace in Bosnia has gone extraordinarily well, and we all ought to be very pleased and proud that IFOR, with one third American participation, has done such a good job under an American commander. That said, there's a very hard task of civilian implementation ahead of us, and we are all aware of that, those who worked on this problem in the United States Government with other governments.

MS. HUNTER-GAULT: There have been so many questions raised about just this and so many assessments that this is the most difficult phase and many very pessimistic assessments this might not work. Was it hard for you to leave at this point? I mean, do you feel the job that you were working on is unfinished as far as your goal?

AMB. GALLUCCI: Uh, certainly, the job is unfinished. I had some months to work initially with Asst. Sec. Holbrooke when he negotiated the Dayton Agreement and then to begin the process for the United States of civilian implementation, but that process has a long way to go. It's from my perspective, yes, it was unfinished, and I had an opportunity that I decided I could not pass up and have moved on to Georgetown, but if I could say a word about the task ahead of the United States and other governments in, in Bosnia, it is, in fact, to help the people of Bosnia rebuild their country, and the emphasis I want to place right now is on the word help. Responsibility for this rests with the Bosnians. These people are capable of making reconstruction a success. We can help. We can help bring some justice through the Hague Tribunal activity. We can help with the reconstruction process with financial assistance. We can help with the resettlement of refugees. There's a lot that the international community can do but whether this is ultimately successful or not is going to depend on the people of Bosnia, the Croats in Bosnia, the Muslims, and the Bosnian Serbs.

MS. HUNTER-GAULT: But can there be--well--not but--can there be success in Bosnia if indicted war criminals like Ratko Mladic and Radovan Karadzic are still running around loose, unapprehended, with elections being predicted in the fall? Can all of that go forward with these guys still on the loose?

AMB. GALLUCCI: Let's be clear about this. Nobody, I think, who works on the subject of, of Bosnia, the problem in Bosnia, wants to see those indicted, particularly the high profile gentlemen you named, remain free. All of us, I'm sure, had dreams of personally handcuffing him and bringing him to the Hague. Maybe at some point that will happen. In the meantime, though, those elections are generally predicted. They're scheduled for August, and yes, the elections can go on, and we can have an atmosphere to permit free and fair elections. Whether we will or not will depend again to some degree on the international community's activism but principally on the people in Bosnia. Those gentlemen and the others who are indicted will be brought to justice when the people of Bosnia support that happening, and I hope it will be soon.

MS. HUNTER-GAULT: It's not fair to ask you this with so little time left, but was this a rewarding career for you, and are you going to encourage another generation of young people like yourself, like you once were, to enter this profession?

AMB. GALLUCCI: It's a very fair question. I have enjoyed my work at the State Department, and in other areas in and around the State Department over 22 years, about as much as I think anyone can enjoy a career. I know I've been incredibly fortunate, incredibly lucky, but it's a terrific area to make a contribution to the nation, to the international community, and I'm looking very forward to making that case at Georgetown, where there are an awful lot of eager and enthusiastic and capable students.

MS. HUNTER-GAULT: Well, Mr. Ambassador, thank you and good luck.

AMB. GALLUCCI: Thank you very much. RECAP

MS. FARNSWORTH: Again, the major stories of this Wednesday, President Clinton and Senate Majority Leader Dole both offered to end the stand-off over the gas tax and the minimum wage. The U.S. threatened stiff sanctions against China for copyright violations. And the House voted to created a new subcommittee to investigate Iranian arms shipments to Bosnia. We'll be back tomorrow night with a new presidential campaign feature, "Where They Stand," excerpts from major policy speeches delivered by Dole and Clinton. I'm Elizabeth Farnsworth. Thank you and good night.