The NewsHour with Jim Lehrer

JIM LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight a look at the coming of the Euro, the new currency for Europe, a Starr investigation update by Dan Balz of the Washington Post, a Kwame Holman report on Washington's latest war of words, some analysis of that and other matters by Mark Shields and Paul Gigot, and some May Day poetry from Robert Pinsky, the poet laureate of the United States. It all follows our summary of the news this Friday. NEWS SUMMARY

JIM LEHRER: The European Union took a major step towards a single currency today. It will be called the Euro. Finance ministers meeting in Brussels, Belgium designated 11 countries to join in that new monetary union. The European parliament and EU leaders will vote on confirming those choices tomorrow. We'll have more on this story right after the News Summary. Independent Counsel Kenneth Starr spoke today about executive privilege. He did so in a speech to a lawyer's group in San Antonio. He said it was on this day 24 years ago that Richard Nixon invoked executive privilege in a failed attempt to prevent prosecutors from listening to audio tapes of presidential conversations. President Clinton has invoked the privilege to block some AIDS testimony before a federal grand jury. Starr quoted Watergate special prosecutor Leon Jaworski at the end of his speech.

KENNETH STARR, Independent Counsel: Leon Jaworski back in Texas later wrote that Watergate had taught the nation two valuable lessons: lessons that are especially appropriate for us to recall on Law Day. First, Mr. Jaworski said, "Our Constitution works." And second, he wrote: "No one, absolutely no one, is above the law." Thank you very much. [Applause]

JIM LEHRER: Commissioner Charles Rossotti promised today to investigate every allegation against the IRS. He was the last witness in four days of Senate hearings on alleged abuses by the IRS. Rossotti took over the agency in November. He said reform would not happen overnight.

CHARLES ROSSOTTI, IRS Commissioner: The modernization that I have proposed will require a dramatic break from past practices in almost every facet of the agency, from the internal structure, the technology, management roles and responsibility, and recruiting of senior executives. However, a change of this magnitude will take time and there is no magic formula or easy solution that will quickly solve the IRS's problems and transform it into a quality service organization.

JIM LEHRER: The Senate is also expected to consider IRS reform legislation next week. The Senate overwhelmingly approved NATO expansion last night. Poland, Hungary, and the Czech Republic were cleared to join the 16-member alliance. The vote was 80 to 19. President Clinton called it a major milestone on the road to a peaceful Europe. All existing NATO members must ratify the agreement. The United States was the fifth to do so. Israeli Prime Minister Netanyahu said today he might meet Palestinians halfway in a dispute over Israeli troop withdrawal in the West Bank. He spoke at a meeting with Vice President Gore, who was attending Israel's 50th anniversary celebrations. On Monday, Netanyahu and Palestinian Leader Arafat are to hold separate talks in London with Secretary of State Albright. Netanyahu spoke about the meetings.

BENJAMIN NETANYAHU, Prime Minister, Israel: Optimism tells me that I hope that we'll have an agreement in London. My realism tells me that in order for that to be achieved that it would have to be a considerable stretching step. It is a distance that it is certainly shorter--smaller than it was many months ago, but, nevertheless, it still remains, and to be a realistic optimistic, I want to say that I hope there is stretching on all sides, so that this optimism is vindicated.

JIM LEHRER: At a news conference in the West Bank today Arafat said the London talks will be decisive and will have important results for peace in the Middle East. Eldridge Cleaver died today at a Pomona, California hospital. The cause of death was not released. He helped found the Black Panthers in Oakland in 1966. It was a militant revolutionary group shaped by Cleaver's book, "Soul on Ice." He was 62 years old. One of the most popular poets in the Arabic language is also dead. Mizar Kabani died of a heart attack yesterday at his London home. His family said he'd been ill for many months. He was renowned for the romanticism and sensuality of his poems. His most famous poem was "The Rose of the Cities." He was 75 years old. And that's it for the News Summary tonight. Now it's on to the birth of the Euro, a Starr investigation update, the latest word fight in Washington, Shields & Gigot, and some May Day poetry. FOCUS - COMMON CURRENCY

JIM LEHRER: Phil Ponce has the Euro story.

PHIL PONCE: This weekend in Brussels, European leaders will take a major step toward one common currency. Eleven of the European Union's 15 members are expected to approve final plans for the introduction of the Euro next January. That's when the Euro will make its debut simply as an accounting unit forgovernments and businesses in noncash transactions. Then in January, 2002, the colorful faceless notes will begin to circulate throughout the continent. By the middle of that year, all national currencies will be canceled--along with all the encumbrances of multiple currencies. For years European leaders have debated whether to go forward with a single currency.

PRIME MINISTER MAJOR: It will be the most important single monetary decision taken across Europe within living memory, so it has to be right.

PHIL PONCE: Britain, in fact has opted to stay out for now, as have Denmark and Sweden.Greece failed the criteria for joining. But the other eleven EU countries decided the Euro will attract new investment capital and force Europe to become more competitive.

WERNER HOYER: The Europeans do not really realize what the pressure of the competition in the year 2000 and beyond will be, how important it is to get the European act together if we wantto bear the brunt of that competition coming from Asia or North America.

PHIL PONCE: And trying to get their act together is what European governments have beendoing in anticipation of the Euro. Even with the price of higher unemployment and publicdiscontent, individual countries have been following a strict regimen of tighter budgets and spending cuts to qualify for membership in what will be called Euroland. According to currency union rules, each country's cumulative debt cannot exceed 60 percent of yearly economic output, nor can its annual budget deficit succeed 3 percent.

WERNER HOYER: It has led to a pressure which produced economic and social reforms which would have been unthinkable without this sort of pressure.

PHIL PONCE: At this weekend's meeting, exchange rates between the eleven national currencies and the Euro will be fixed forever. But there are still questions on just how well these sovereign nations will work together in the new order. Even on the eve of tomorrow's launch a dispute remains between France and Germany over who will head the new European Central Bank.

PHIL PONCE: For more, we're joined by Stephan Richter, president of Transatlantic Futures, a Washington-based global strategy consulting firm. Lourdes Beneria, professor of international development and economics at Cornell University; and Steven Overturf, economics professor at Whittier College in Southern California, whose latest book is called "Money and European Union." Welcome all. Professor Overturf, just so that we're completely clear, the Euro will be for these countries what the dollar is within the United States, yes?

STEPHEN OVERTURF, Whittier College: Yes, exactly. And many years ago, of course, the dollar was not the only currency that circulated in the United States, and so in some ways they had to bring all that together, and the same thing is happening in Europe.

PHIL PONCE: So, Professor, eventually there are not going to be any Deutsche marks, any lira, any francs, those will simply be gone?

STEPHEN OVERTURF: All those will disappear, and that process will start very quickly here on January 1st of next year. And by the year 2002, really all the literal currencies will be gone into the new currency of the Euro.

PHIL PONCE: Late reports, Professor, indicate that the initial value of the Euro is going to be set at about $1.10. Does that sound about right?

STEPHEN OVERTURF: That sounds about right. There may be some fluctuation between now and the time it is actually introduced, and, of course, afterwards, there's some possibility of some further turbulence in that market, but that seems about right.

PHIL PONCE: Professor, why are countries doing this? What's the historical push?

STEPHEN OVERTURF: Well, that's a wonderful question you asked that because it's very hard, I think to understand this unless you understand the history behind it. I think sometimes because it hasn't been covered that extensively in America, Americans are thinking that this has been pulled out of the air, but it goes all the way back actually to 1952, with the founding of the European coal and steel community, an idea of Jean Monet's, who is called the father of Europe, to try to economically bring the states of Europe together so as to avoid yet a third world war. And then that accelerated into the common market because the coal and steel community work particularly well. And then by the late 60's and early 70's, they tried to go into a monetary union. Now, as it turns out, that failed, but by 1979, they made another at least partial attempt in the European monetary system, and that worked particularly well. Later on, there were some blips along the way, but that set the stage, if you will, for the Maestricht Treaty in 1992, which then is coming to accumulation here in the Euro.

PHIL PONCE: But the primary impulse was World War II in the attempt to what, achieve stability, attempt to, what, defuse longstanding rivalries by joining, joining economies?

STEPHEN OVERTURF: Yes. Breaking down the barriers between nation states, between the two wars each individual state had moved into their own realm and created almost little mini fortresses, and that, plus the other nationalistic tendencies, tend to result in World War II. A lot of people after the end of the war thought that maybe people could come together politically, but, again, that's something that didn't happen. So they tried to revert to something that had worked with the zolvarein--we're getting very historical here--in Germany, which was to enter the economic back door into a greater political union. So in many ways all of what we're seeing has as much a political dimension to it as an economic dimension.

PHIL PONCE: Mr. Richter, what--looking at the economic dimension, what's in it for these countries to do this?

STEPHAN RICHTER, Transatlantic Futures: Very simple. Just imagine the United States would be split back into six or twelve countries, and you had a California dollar, a Texas dollar, and so on. No chairman of any U.S. company would say that you can run a business on that basis; it's highly inefficient. And so they're trying actually to ramp up, not just to do away with the late effects of the war and it really creates some European integration, but also very much to try and create a business basis that's comparable to the United States. The United States, as everybody around the world knows, is the most powerful country on earth, and I think one of the drivers for some of the countries--the French certainly is--to make sure that Europe will have a brighter future and one of the conditions without which that cannot happen is to have a common currency because that's going to lead to something very interesting. Business structures all over the continent--big banks--big insurance companies--big manufacturing firms--it's going to lead to a lot of shakeout too like we had here in the United States ten years ago. But, anyway, it's a nice step forward in historic terms to a greater, stronger Europe, a more vibrant U.S.--European economy, which also is going to be good for Americans because they have better business partners in Europe than just the small German market, French market. Never mind the Danish or Swedish or Greek or all these other markets--it's going to be one market's much easier for everybody to go into.

PHIL PONCE: A pretty rosy picture, Professor Beneria. Do you see it that way?

LOURDES BENERIA, Cornell University: Well, parts of it, yes, but there will be some losers. To begin with, I think we need to think about the fact that not everybody's going to--even those who will benefit will not benefit equally. Clearly, the larger business--those who have--who trade them have many exchanges between countries are going to be the major beneficiaries. The average European is not going to feel that much of a difference. That's why they have remained much more neutral. The push has really come from business, although I think we should also admit that there has been some political reasons behind it, not just total economic reasons.

PHIL PONCE: As far as average Europeans are concerned, how could they be affected adversely, Professor?

LOURDES BENERIA: Well, I think we should say that they already have. You know, the Maestricht Treaty started the process, the strict rules to be able to a member of the Maestricht club, that is, to be part of the Europe--means that countries will have to keep very much under control government spending, especially deficits, and they were not able to qualify unless they followed the rules, and that's why some of the countries like Greece have not been able to qualify. So it has already been felt. I mean--

PHIL PONCE: Felt in what, unemployment, cutbacks in social spending, is that the sort of thing?

LOURDES BENERIA: It has contributed to the dismantling of the welfare state in Europe but has decreased in government spending, decreased in the amount of social services, especially the lower income groups make more use of, and therefore, it is unequally distributed, how it is--the negative aspects maybe. Also, unemployment, those who are unemployed will likely to suffer for two reasons: one is because unemployment benefits may not be as generous as they were before, and also because there will be less money to create jobs on the part of the public sector. So there may be also, for example, decreases in health--in the health--very generous health and education, housing services that many European countries in different degrees, obviously, depending on which country have--so it's part of the dismantling of this welfare state that has already taken place in Europe, you know, due to globalization, and the information of the Euro will contribute to that.

PHIL PONCE: Professor Overturf, how about the dismantling of sovereignty, is that an issue, how much power are these respective countries giving up?

STEPHEN OVERTURF: Oh, this is extraordinary. When you think about it, there are very few things that really constitute what a country is or what a state is. That would include defense, raising an army, being able to tax. But one significant thing is issuing your own money and controlling your own money supply so make no mistake, this is very, very exciting. I mean, whether you're for it or against it, it's a really exciting move because it is transferring sovereignty to a higher level among these states by treaty.

PHIL PONCE: Mr. Richter, could this thing fall apart? At some point down the road could a country say forget it, it's not worth it, we're pulling out?

STEPHAN RICHTER: It could, but the important thing to remember is compared to what you said one thing that strikes me, Spain, for example was never a leading light in the European economy. If you look at it right now, Spain stands supreme. It's had a perfect record. Ireland was always a small country. It's doing better. Most of the small countries right now are doing better than the big countries. The small countries have become the leaders of the European process. Germany and France, traditionally seen as the locomotives, are the laggards. This, I think, creates for the first time some interesting competition between the European nations. And that is very important. If the small countries can better the large countries, that I think is good. Now, the other thing, it can fall apart, but, again, what's the choice? What you described so well is what every American has gone through over the last 15 years, and what some Americans are still going through, though unemployment is now at record lows. There is no choice. In a globalizing economy you can't have it both ways. You can't travel all over the globe in airplanes and all that, and you can't have cheap goods from all over the world, and then presume like the Europeans have up to now that you don't need to change. It's equal rights for everybody, for Americans, Europeans, and Asians, and that I think is part of the answer that the Europeans are learning the hard way because they weren't willing, absent a common currency in most of these societies, to learn it individually.

PHIL PONCE: Professor Beneria, one of the things people say is that this is a big step on the road to "the United States of Europe." Do you see it that way?

LOURDES BENERIA: Probably yes. I think many countries see it that way, however, I think that we may have many surprises along the line because we can see how also, you know, regions and all identities that have to do with ethnicity are also growing within Europe. But in many ways they are seen as being part of the larger Europe, so, yes, in this sense, there may be a dismantling of state, but without necessarily giving away the identity of some of the--you know--small ethnic groups that can be found within each country.

PHIL PONCE: Are you saying that the creation of the Euro is what, sparking some nationalism?

LOURDES BENERIA: Not of the Euro in particular but the unification of these countries. It's not so much the formation of Europe as the globalization of Europe, the globalization.

PHIL PONCE: Professor Overturf, the impact here in the United States, why should people in this country care about the fact that these countries are going towards a single currency?

STEPHEN OVERTURF: Several reasons, actually, if you travel to Europe, to more than one country in Europe, and you know that when you cross the border, you've had to exchange out of one currency into another, and if you looked at the price at which you've had to do that, the commission of the spread on the exchange rate, you'll know that you've been hit pretty hard, and it's just awkward. That will, of course, all be gone for travelers. That's probably not a major thing. On the other hand, if you're a businessman--and you're a business man or woman, and you're doing business in Europe, now there's really no exchange rates between the various countries of the union--at least the 11--it will go forward, and that should mean a much easier way to do business there, at least for the small and medium size. There is potentially a down side, though, for Americans, and that is, as the capital market develops within Europe around the Euro, it's very possible that this will become very attractive for bonds and for assets, for stocks, and that might attract some money which originally would go to the dollar. That may mean a slightly higher long-term real interest rate for us. For the person on the street that could be a student loan a little bit higher, a car loan a little bit higher, a mortgage rate a little bit higher.

PHIL PONCE: Mr. Richter, do you agree that the Euro has the--at least the potential to rival the dollar as the dominant currency in the world?

STEPHAN RICHTER: It does, but the effects are not just possibly that interest rates here could rise a little because the Euro is more attractive to global investors and not everybody who needs to store money anywhere will put it into the dollar, but perhaps in Euros, and the U.S. may have to raise interest rates. At the same time, there is a counterbalancing force. In this country we're talking right now a little bit about that where do we put all our money in terms of mutual fund investing and lots of people are looking at Europe, so people are more dubious, will we get the gains here in the U.S. or not, and in Europe perhaps we may get them. There's one important lesson in a historic sense that balances this all to me and fascinates me; it's really between Europe and the United States what we'll learn from each other-- was Benjamin Franklin, who said, what's equally true today for the European Union, as we sit here this evening--which was--we shall either hang together, or we shall be hung separately. And he said that 200 years ago, and I think it's equally true, and it's a good indicator for the future of Europe.

PHIL PONCE: Prof. Beneria, a quick response to that.

LOURDES BENERIA: Well, a quick response, yes, I like that--except that I would like to desegregate it. You know, the optimism is more at the macro level, you know, when you think about a country, about United States versus Europe. I like to look at different groups within countries, you know, different social groups. And so I think it's very important to keep in mind that different people benefit differently, and that what we have to learn is to--for those who lose to be compensated because there will be many winners, but there will be also many losers, and social policy is about compensation, and the European model has been pretty good about that, and so many of us are concerned about losing, you know, the old European model and, in fact, making it more like the United States model.

PHIL PONCE: I'm afraid that's where we'll have to leave it. Thank you all very much.

JIM LEHRER: Still to come on the NewsHour tonight, the Starr investigation, the new Washington words war, Shields & Gigot, and some May Day poetry. UPDATE - TRACKING THE STORY

JIM LEHRER: Elizabeth Farnsworth in San Francisco has the update on the Starr investigation.

ELIZABETH FARNSWORTH: And for a report on this week's developments we return to the Washington Post newsroom and to Dan Balz, a correspondent on the Post's national staff.Dan, the independent prosecutor, Kenneth Starr, yesterday brought a new set of tax evasion charges and fraud charges against Webster Hubbell, the president's close friend and former law partner of the First Lady and a former high Justice Department official.What's in the indictment?

DAN BALZ, Washington Post: Elizabeth, there's a series of things in the indictment in a week in which we've had a flurry of activity as the Little Rock grand jury begins to wind down. The Hubbell indictment is a 10-count indictment on tax evasion and fraud against not only Webster Hubbell, who's the former associate attorney general, a close friend of the president and Mrs. Clinton, and a former law partner of Mrs. Clinton, also indicted wereMr. Hubbell's wife, his Little Rock attorney, and his accountant. They are charged with having evaded payment of taxes and interest and penalties amounting to about $890,000 over the last several years.

ELIZABETH FARNSWORTH: What does this have to do with the earlier go-around between Starr and Hubbell?

DAN BALZ: There's a couple of direct connections. One is--as you recall--Mr. Hubbell pleaded guilty several years ago to having embezzled more than $400,000 from his law partners at the Rose law firm in Little Rock, subsequently served 17 months in jail as a result of that conviction. What this new charge says is that he evaded paying taxes on some of the money he embezzled from his partners, as well as about $700,000 in income he received in payments from friends and supporters of President Clinton in the White House subsequent to that conviction.

ELIZABETH FARNSWORTH: And what wasn't in the indictment that was important? I understand that is important too?

DAN BALZ: Well, that is important. All through the Hubbell investigation, if you will, has been this question of whether the $700,000 was used to buy his silence as part of a broader pattern of obstruction of justice that the Starr investigators have been trying to prove. In this indictment he was not charged with any obstruction of justice, so at this point it suggests [a] that he has not provided any damaging information about President Clinton--this latest indictment is clearly an effort to try to compel his testimony to get him to tell more than they believe he has told at this point--but second, that at this point they do not yet feel they can prove an obstruction of justice case against him.

ELIZABETH FARNSWORTH: Now, they want to compel testimony on Whitewater-related issues, and there were developments this week in that too in that the First Lady testified over the weekend last weekend about that.

DAN BALZ: That's correct.

ELIZABETH FARNSWORTH: Now, bring us up to date on that.

DAN BALZ: Hillary Clinton testified last Saturday in the White House--in the Yellow Room at the White House for more than four hours. This marked the sixth time that she has provided testimony to the independent counsel's office. This was another matter in which she was questioned at greater length than in the past about her involvement with the Madison Guaranty Savings & Loan, work she did with them as an attorney at the Rose law firm. And what the Starr investigators have been attempting to determine is whether she has been truthful in what she has said about her representation in that matter.

ELIZABETH FARNSWORTH: Now, in those five hours she did not answer in response to two questions, is that right, and she claimed the marital privilege.

DAN BALZ: That's right. Over the course of more than four hours there were two questions that she did not answer. In each case she declined to testify because of the spousal privilege that anyone has.

ELIZABETH FARNSWORTH: Now, the grand jury, as you just mentioned, in Little Rock is about to go out of business. It expires next week, and Kenneth Starr wants Susan McDougal, who is the Clintons' partner in the Whitewater venture, to come before that committee. Bring us up to date on that and also remind us about Susan McDougal and who she is and what's happened with her in the past.

DAN BALZ: Susan McDougal is a former business partner of the Clintons, as well as the wife of the late James McDougal, who died earlier this spring. She and her husband were both convicted of fraud in an earlier investigation by the independent counsel. She was later called before the Little Rock grand jury about Whitewater and refused to testify even after she was given a grant of immunity. She has spent about 18 months in prison in contempt of court as a result of that. They are now threatening her with criminal contempt, a new indictment which could come down in the next week as this grand jury closes down. This and the Hubbell investigation are all part of this larger effort, as I said, by the Starr investigators to try to compel testimony from people they believe who have not been forthcoming in this investigation and to try to get that testimony out of both Mr. Hubbell and Ms. McDougal as they try to wrap up the grand jury part of this investigation in Little Rock. That grand jury, as you noted, is due to go out of business next week. Now, if they were to obtain further information from either of these two witnesses, they could impanel another grand jury and easily deal with it that way. But they are clearly trying to wrap this part of the investigation up.

ELIZABETH FARNSWORTH: Dan, what is criminal contempt exactly? How does it differ from the civil contempt?

DAN BALZ: Well, you know, I don't know all the legal details that it's the next--it's the next and more punitive step obviously in this. Legally, he has every right to do so. If you are called before a grand jury under these circumstances that she's been and given a right--the grant of immunity--you are required to testify, and the failure to do so initially results in civil contempt. But in a case like this, where he is pushing very hard to get her to talk and she is resisting mightily, not talking, criminal charges can be brought, and she faces another prison term as a result.

ELIZABETH FARNSWORTH: Now, finally, the other development this week is news that a U.S. district judge has rejected Monica Lewinsky's claim that Kenneth Starr's office had granted her immunity. Bring us up to date on that.

DAN BALZ: That is in many ways the longest running dispute of the whole Lewinsky matter that has been raging since literally the day that Starr's attorneys first detained her at a suburban Washington hotel back in mid January before this entire episode broke. The dispute is fairly simple. William Ginsburg, who is Monica Lewinsky's attorney, has claimed that Ken Starr's office sent them a letter offering a grant of immunity in exchange for her testimony. And, as we understand it, she was prepared to testify under those terms that she had a sexual relationship with the president. What she was prepared to say about whether the president or any of his friends urged her to lie about that is somewhat murkier. The independent counsel's office claims that the letter was not a formal offer but part of an ongoing negotiation that still needed several further steps, including a possible interview with Monica Lewinsky before any formal grant of immunity was made. Mr. Ginsburg took this to Federal District Judge Norma Hollaway Johnson, who oversees the Starr grand jury, and as we all learned this week, she has indicated to both sides that she's rejecting Monica Lewinsky's claim, although she has not, as we understand it, filed the formal legal finding at this point.

ELIZABETH FARNSWORTH: And where does this lead Kenneth Starr, what options?

DAN BALZ: It leaves him very much where he's been from Square One. He can call her before the grand jury. He can offer her limited immunity, and he can compel her testimony. Or he can go ahead and indict her for perhaps perjury or obstruction of justice and put her on trial in a courtroom.

ELIZABETH FARNSWORTH: And how important is Monica Lewinsky's testimony at this point, or are there other--are there other places to go for evidence?

DAN BALZ: Well, Mr. Ginsburg said at the beginning of this whole matter that Ken Starr essentially has a one-witness case on this part of the investigation. Since then, it's clear that the Starr team has developed considerably more evidence than simply what Monica Lewinsky might be able to provide. But I don't think there's any question that other than the President of the United States Monica Lewinsky is the most important person whose story has not been told to the grand jury. And whatever she has to say will have a great bearing on the outcome of this whole investigation.

ELIZABETH FARNSWORTH: Well, Dan, thank you very much.

DAN BALZ: Thank you.

JIM LEHRER: A reminder: The Washington Post's full coverage is available after 10:30 PM Eastern Time on their web side and on ours. FOCUS - FIGHTING WORDS?

JIM LEHRER: The political war of words between Republicans and Democrats over the Starr matter and other things escalated this week. Kwame Holman reports.

KWAME HOLMAN: Recently House Speaker Newt Gingrich spent a few hours in a Capitol Hill book store signing copies of his new book "Lessons Learned the Hard Way." In it Gingrich talks about mistakes he made in dealing with President Clinton in recent years, how he underestimated the President's political resiliency, and how that might have cost Republicans the White House in 1996. This week Gingrich embarked on a new strategy against President Clinton, criticizing him and his allies for the manner in which they've responded to the investigations by independent counsel Kenneth Starr.

REP. NEWT GINGRICH, Speaker of the House: The fact is if he wants to fire Ken Starr, he can do it in the morning. And if he doesn't want to fire Ken Starr, he should tell his staff to shut up because there's something-- [applause]

KWAME HOLMAN: Gingrich inaugurated his new offensive Monday night at a dinner meeting of GOPAC--the Republican Political Action Committee Gingrich founded.

REP. NEWT GINGRICH: There is something profoundly demeaning and destructive to have the White House systematically undermine an officer of the Department of Justice. And when I watch these paid hacks on television--to be quite honest--I am sickened by how unpatriotically they undermine the Constitution of the United States on behalf of their client.

KWAME HOLMAN: The next day President Clinton was asked about the Speaker's comments and responded this way.

PRESIDENT CLINTON: Mr. Gingrich said a lot of things last night that I don't think deserve a response and I would think it would not serve the American public well for me to waste my timedoing it. I think I need to be focused on the public issues that affect them. And that's what I intend to do.

KWAME HOLMAN: But that afternoon the Speaker continued the rhetoric aimed at the president by exchanging sharp words with California Congressman Henry Waxman, the ranking Democrat on the Government Reform and Oversight Committee. The committee's ongoing investigation of campaign fund-raising abuses during the last presidential campaign has been extremely partisan. And last week committee Democrats blocked an attempt by Republican chairman Dan Burton to subpoena four witnesses. Gingrich compared that act to Republicans' actions during Watergate.

REP. NEWT GINGRICH: Go back in your memory and remember Howard Baker's effort to find the truth and then I think you will understand why we are being forced inch by inch to break through the stone wall and the coverup despite the defense attorney tactics being used by Democrats who ought to be ashamed of it and ought to helping us get at the truth, rather than finding some flimsy excuse to avoid voting for immunity.

REP. HENRY WAXMAN: Will the Speaker yield?

SPOKESPERSON: The chair recognizes the gentleman from California, Mr. Waxman, for five minutes.

REP. HENRY WAXMAN: Well, I'm sorry the Speaker wouldn't yield to me because I want to tell the Speaker that in the Watergate investigation the chairman, Sam Ervin, did not accuse the President of the United States of being a scumbag. He didn't say that he was out to get him. Those were the very words of the chairman of the Government Reform and Oversight Committee.

KWAME HOLMAN: On Wednesday...Gingrich continued--telling reporters: " This is about breaking the law. This is not about sex. This is not about gossip. This is not about soap operas." And later--referring to the President's request to Congress for money for the International Monetary Fund-- Gingrich said, "If the Clinton Administration does not turn over documents and information, if they don't make witnesses available, they're not in a very strong position to demand that we give them any money for anything." At his press conference yesterday..President Clintononce again was asked to respond to the Speaker's comments.

MIMI: You in your answers have been insisting for quite sometime now that you're ableto remain focused on the business of the country and do your work, despite what's going on, but House Speaker Gingrich is making it increasingly clear that unless there's some more cooperation,some more forthcoming, on your administration's part, that your agenda on the Hill is going tobe stalled. I wonder if there comes a point where you feel it's your responsibility to provide somemore cooperation, so that some work can get done for the American people.

PRESIDENT CLINTON: Oh, I don't think anyone really seriously believes that's what the last three or four days have been about. That's a--that's a--they've been about politics. And I'm not going to let--I cannot be--I can be responsible for a lot of things, but I'm not responsible for the Speaker's behavior. Neither, however, will I respond to it. The right thing for me to do is to let others defend me as best they can and to go on and worry about the American people.

KWAME HOLMAN: Those others included House Minority Leader Dick Gephardt, who yesterday called on the Speaker to recuse himself from any possible congressional investigation involving the president.

REP. DICK GEPHARDT: My concern is that he seems to be taking the position of judge and jury. That is, he is deciding these issues before he's even presented with the facts. And I think that disqualifies him from being able to carry out these duties as Speaker of the House. The Speaker of the House should be non-partisan, should be in an investigatory mode, should be looking for facts, trying to help the Congress get to the facts, and observing the rule of law, as he said. I totally agree with him. The rule of law is paramount in this country, and it must be observed, but part of observing the rule of law is carrying out a process in the Congress that complies with our laws and rules.

KWAME HOLMAN: A short time later at his regular news conference the Senate Minority Leader took a similar view of the Gingrich statements.

SEN. TOM DASCHLE: I must say the Speaker has unnecessarily politicized what is already a very, very difficult set of circumstances in the House, and I think that Dick Gephardt's letter is appropriate under these very, very difficult politicized circumstances we're experiencing. I have not seen anything like this in the time that I've been in Washington. It's unfortunate. It's counterproductive, I think it sends all the wrong messages to the American people, and I just hope that at some point the Speaker will recognize the error of this approach and show some balance and show some statesmanship.

KWAME HOLMAN: President Clinton traveled to California today, where he mixed business with pleasure, speaking to sheet metal workers in San Jose, before getting together with daughter, Chelsea, who attends college at Stanford. Ironically, Speaker Gingrich also was at Stanford today, speaking at the conservative Hoover Institute and ending his week the way he began it.

REP. NEWT GINGRICH: I caused some turmoil on Monday night by articulating two principles that strike me as so self evident that to this day I can't quite figure out how the Washington press corps got so excited. I said two things: the American public has the clear right to know if a law has been broken. Now, that goes, it seems to me, to the heart of Jefferson. And second, that no one is above the law, including the President of the United States. FOCUS - POLITICAL WRAP

JIM LEHRER: For more on the speaker, the president, and related matters Shields & Gigot, syndicated columnist Mark Shields, Wall Street Journal columnist Paul Gigot.War of words, what is your battle assessment at the end of the week, Mark, advantage President Clinton, advantage Speaker Gingrich?

MARK SHIELDS: Well, Jim, what should have been the really bad week for the White House, the immunity story on Monica Lewinsky, she--there is no immunity granted by the independent counsel. She's going to have to testify--will testify before the grand jury. The indictment of Webster Hubbell--I mean, the White House very much on the defensive, bad news for him, and Newt Gingrich steps in, and saves them. He steps on a good news week for the anti-Clinton folks. What he does is he takes a story that if you're a Republican, you want the story to go forward, you don't want any partisan context, you want the story to carry itself, you want the press to write about it, you want the independent counsel to act. What Newt Gingrich did was he enabled Tom Daschle, the Senate Democratic leader, Dick Gephardt, the House Democratic leader, stand up and say this is unfair; it's partisan; it's--and put it right in a partisan context. And I'll tell you--I mean, I think it's exactly the background music, the wallpaper that the White House most wants for this--people in the country to say, well, the criticism must be political.

JIM LEHRER: Paul.

PAUL GIGOT: I don't share Mark's view of that. This was already partisan and political, and I think that's the conclusion that Newt Gingrich reached. There was no way this was not--that anything that Ken Starr did--anything that--any legal story was not going to be spun or interpreted by the White House as political, as partisan. So--and as a result, the White House has been dominating the perception, the public perception, with the bully pulpit of what this story is and what they've been saying is it's a partisan vendetta by an out of control prosecutor about a 21 year old intern, about sex. It's about private things. We should forget about it. Gingrich is trying to elevate it and say, look, this is about more than that, put it in a broader context, in part to educate the country about whether or not--in case this goes to the Judiciary Committee--but also just to educate people about the stakes. It's about the rule of law. There are serious accusations here. I think there have been a lot of Republicans for a long time who wanted Newt Gingrich or somebody prominent to speak up, and I think that they're happy he has.

JIM LEHRER: What about the political risks, has he taken any?

PAUL GIGOT: Yes. There's no question that the Democrats jumped on it and said it's going to be partisan. And for a lot of Democrats, in particular, they will perceive it that way. But the benefit on the other side, I think, is also something that you can begin to educate people and to tell your supporters, Republicans and independents out there, wait a minute, this is not a simple story about sex, so there is some risk, but there's also a benefit.

JIM LEHRER: A benefit.

MARK SHIELDS: Big risk. Eighteen months the speaker spent rehabilitating himself. He's down in favorability somewhere around the Menendez Brothers. He's come back. He's in good shape. The Congress is in good shape. I mean, he's in an improved condition, and he was the lean but not mean Newt, going on the Tonight Show, patting a koala bear, feeding an ardvark, and just sort of this avuncular Newt, and all of a sudden he's back into the same old Newt. I mean, 18 months has gone by the boards, Jim, but there's a big risk.

JIM LEHRER: But about Paul's point, though, that there is also the potential that he could turn it around in terms of the educating the American people about what the serious matters here are beyond sex, et cetera.

MARK SHIELDS: Well, the Speaker is not the person to do that. And if you want to do Henry Hyde, you want to do Howard Baker, you want to do Gerry Ford, you want to do all kinds of people, the Speaker is just--the Democrats were licking their chops after he came out, and--

JIM LEHRER: How about that, Paul? This is the wrong messenger--the message may have some merit, but it's the wrong messenger?

PAUL GIGOT: No other Republican commands the cameras, commands press attention like Newt Gingrich has. I mean, Steve Forbes says it, or John Ashcroft says it, or somebody else says it--it's a one-off quote. Newt Gingrich says it everybody pays attention. So we've got at least an engagement over ideas here.

JIM LEHRER: We're talking about it.

PAUL GIGOT: We're talking about it. That's right.

JIM LEHRER: And everybody else is because Newt Gingrich did it.

MARK SHIELDS: It's--Jim, there's exposure and there's indecent exposure. And I'll tell you, if I were a Republican partisan, if I were a Republican partisan, I would be hurting right now because this thing is not in the context where I want it debated as a Republican partisan. Let me just point out, the base of the Republican Party--that is the family values--religious values people in the Republican Party who comprise a little--two out of five Republican voters have been very disappointed in the party of leadership.

JIM LEHRER: For not doing this?

MARK SHIELDS: For not doing it. For not taking on Bill Clinton. For not standing up. For not speaking out, and so lately what have we seen? We've seen Tom Delay, the House Majority Whip, and Dick Armey, the House Majority Leader, and now the Speaker--they're scared stiff, Jim. I mean, Rev. Jim Dobson comes out of the focus on the family group in Colorado, very powerful voice in the religious right, he is basically saying, there's not a dime's worth of difference between the two parties.

JIM LEHRER: Unless you speak out, unless you do it.

MARK SHIELDS: Okay. Yes.

PAUL GIGOT: Yes, but this isn't simply about base politics. There's some of that going on. This is about more than that. This is also about telling those other Republicans who may have tuned this out and the other mass of people who may have said, well, this is all about that tabloid stuff, wait a minute, there is, there are larger issues here about cooperation with Congress, about 92 witnesses who had either fled the country or taken the Fifth Amendment. That's extraordinary. And the country doesn't know that, and if Republicans aren't helping to tell them that, they're not going to know it.

JIM LEHRER: We had the regional commentators on last night talking about this very thing, and Mike Barnicle of the Boston Globe said they've tuned out both Clinton and Gingrich on this. But you think it's possible to bring the public back into this?

PAUL GIGOT: Well, I think that as the legal case moves along and you have indictments and you have reports and that sort of thing, the public will tune in at different windows, and Gingrich's speaking up I think is probably one of those. I mean, the public does tune out a lot of what goes on here, but ultimately I think they're going to want to know was this of some substance or meaning.

JIM LEHRER: Now, speaking of substance and meaning, the two things that Dan Balz talked to Elizabeth about--two of the things--one is the Lewinsky immunity issue, and the other is the indictment of Webster Hubbell--how important are they?

MARK SHIELDS: Well, I think the Lewinsky immunity decision is an important one. It means that Monica Lewinsky and Linda Tripp are finally going to testify under oath before a grand jury. And it's got to be bad news for the White House, there's no question about it. I mean, she'll go in, refuse in all likelihood to take questions, and they'll offer immunity, and I don't think that anybody thinks Monica Lewinsky is going to show up in an orange jumpsuit like Susan McDougal has for the last year and a half.

PAUL GIGOT: I--[laughing]--

JIM LEHRER: Yes, Paul? That's an allusion to the fact of being in prison, she wears a prison uniform and shackles--

MARK SHIELDS: And she will testify--

JIM LEHRER: Right.

PAUL GIGOT: Nobody knows what she's going to say, I agree with Mark, it's a threat to the White House. I think the Hubbell indictment paradox, I think, has brought some relief to the White House because what it meant was he's not cooperating with Starr, and that's their great fear, is that somebody like a Susan McDougal or Hubbell might cooperate in a way that tells things that they haven't provided so far.

JIM LEHRER: Dan also said that one of the significant things was what the indictment did not include, which was an allegation that this was hush money, this money that Hubbell was paid after he left the administration.

MARK SHIELDS: To me, I think that's significant. I mean, I really thought this showed Ken Starr, the independent counsel, with another tin ear. He goes after Web Hubbell, and brings a charge against him on not paying taxes, failure to pay taxes. A career attorney at the Justice Department today, 21 years in the tax division, prosecuting this case has seen one other case for failure to pay taxes. This isn't evasion. This isn't avoidance. This isn't failure to file. This is somebody who's paying off other bills before he paid off IRS. But I think the mistake they made was indicting Susie Hubbell, Web Hubbell's wife, at the same time. They don't do that to mafia dons when they're going after them. And I really think that--

JIM LEHRER: And his lawyer and his accountant.

MARK SHIELDS: And his lawyer and his accountant.

JIM LEHRER: What do you think about that?

PAUL GIGOT: They do go after--they do do that when they suspect that there is a conspiracy not to tell the truth, and there was tantalizing evidence in the indictment of the hush money point, which is that, I think he said that--the indictment said that there was something like $700,000 paid around-- shortly after Web Hubbell had resigned from the Justice Department, that he performed little or no work for an awful lot of those jobs and that cash. It is significant, however, that he didn't have enough to make the obstruction indictment, if that's what he--I think that's Starr's theory of the case, that there has been a systematic effort here. He is pressuring Hubbell, and he's leaning hard, there's no question about that.

JIM LEHRER: It may not be over. It may not be over, is what you're saying.

PAUL GIGOT: And you go with what you got.

JIM LEHRER: Go ahead.

MARK SHIELDS: The Speaker concluded in a statement earlier this week that it was hush money; that's what it was. I mean, he's on record that way. This is where I think the hyperbole again doesn't help.

JIM LEHRER: Well, I want to come back to that. The president's news conference--we've had these statements by Gingrich as well this week. How do you rate them just in terms of--at the rhetoric level, how the president handled himself at the news conference, how Gingrich is handling his story?

MARK SHIELDS: Well, I think the president, the news conference, the press conferences have historically been a great forum, a very effective forum for Bill Clinton as president to make his case. He shows a mastery of information. He's quite personable. He's totally articulate. He's easy and relaxed in that setting. He's as good, you know, handling it as anybody. I think what we've seen now, as a consequence of this story, especially the Monica Lewinsky part of it, is that the press conference has become a mine field to be tiptoed around. The answers yesterday fell into two categories: Anything about the investigation--click--little bob, weave--and you ask about anything--ask about what time it is--he's going to tell you the history of Switzerland and watchmaking and they showed that mastery of information on the Middle East--

PAUL GIGOT: Gripping stuff.

MARK SHIELDS: No, but that was the old Clinton.

JIM LEHRER: Yes. The old Clinton?

PAUL GIGOT: Well, I thought that it showed--in his attempt to show how little he thought about this--it showed how much he's thinking about it. He said, I'm above it all, I'm doing the people's business, and yet, he showed in an answer to one question that he was familiar with a New Yorker article about the religious convictions of one of Ken Starr's deputies, Hick Hewing. I mean, can you imagine Ronald Reagan having any familiarity with anything like that during Iran Contra? No.

MARK SHIELDS: What do you mean?

PAUL GIGOT: He is focused on this. It's taking up enormous amounts of his time, and it's preoccupying him, and one other thing that I thought was interesting about his press conference is it revealed sort of a self image of all of this, which is I think sort of like Jean Vel Jean in Les Miserables. He's--he's the righteous man. He's the besieged individual, the virtuous soul who all around him is beset by evil enemies who really want to take him down. That's the only thing--their only goal. And it's a failure on his part to take any kind of responsibility-- much as Mark said a year ago about Newt Gingrich--when he was fighting his ethics charges. Right now you have the president failing to admit that there's any responsibility he should take.

JIM LEHRER: Did you find it interesting, Mark and Paul, that in the middle of all this yesterday the Senate not far away--the Senate of the United States by an overwhelming margin was passing NATO expansion, which was supposed to be in trouble at one time or other and the president well--Trent Lott said on this show last week it was close, the president had worked very hard to get it done, and yet it happened.

MARK SHIELDS: Eighty to nineteen. I mean, total bipartisan at a time when the other initiatives of the administration--UN funding and IMF funding- -are in trouble. I think careful intense lobbying--I think a lot of credit has to go to Secretary of Defense Bill Cohen, who has been a NATO guy since the day he came into the Senate in '78, but don't forget the political domestic aspect of it--states--key states--

JIM LEHRER: All right.

MARK SHIELDS: --Czech, Hungarian, and especially large Polish populations.

JIM LEHRER: How do you read it?

PAUL GIGOT: This shows that the differences within the parties on foreign affairs are much bigger right now than the differences between the parties. This was not--this was pushing a rock down hill politically. I mean, Bob Dole was for this in 1996, when you--when you have a coalition that ranges from Joe Biden on the left to Jesse Helms on the right, he'd better be able to pass it.

JIM LEHRER: All right. So don't read too much into this is what you're saying?

PAUL GIGOT: It's significant; it's a significant American commitment, but I'm not saying that this was the hardest political sell in the world.

JIM LEHRER: I hear you. Thank you both very much. FINALLY - MAY DAY

JIM LEHRER: Finally tonight a May Day poem from Robert Pinsky, the Poet Laureate of the United States.

ROBERT PINSKY, Poet Laureate: For the 17th century poet Robert Herrick the word "May" was a verb. In his poem "Corinna's Going A-Maying" he urges his girlfriend to get out of bed so they can go maying, enjoy themselves with the other lovers, who are decorating town and field with flowering branches. Here are some passages from the poem: Each flower has wept and bowed toward the east/Above an hour since, yet you not drest;/Nay! not so much as out of bed?/When all the birds have matins said/And sung their thankful hymns, 'tis sin,/Nay, profanation, to keep in,/When as a thousand virgins on this day/Spring sooner than the lark, to fetch in May./Rise and put on your foliage, and be seen/To come forth, like the springtime, fresh and green,/Come, my Corinna, come; and coming, mark/How each field turns a street, each street a park,/Made green and trimmed with trees! see how/Devotion gives each house a bough/Or branch! each porch, each door, ere this,/An ark, a tabernacle is,/Made up of whitethorn neatly interwove,/As if here were those cooler shades of love./Can such delights be in the street/And open fields, and we not see't?/Come, we'll abroad; and let's obey/The proclamation made for May,/And sin no more, as we have done, by staying;/But, my Corinna, come, let's go a-Maying./

ROBERT PINSKY: Even when Herrick ends his poem with a reminder that nobody is young forever, there's a springtime freshness to how he says it: Come, let us go, while we are in our prime,And take the harmless folly of the time!/We shall grow old apace, and die Before we know our liberty. / Our life is short, and our days run/As fast away as does the sun.And, as a vapor or a drop of rain,Once lost, can ne'er be found again, So when you or I are made/A fable, song, or fleeting shade, All love, all liking, all delight Lies drowned with us in endless night.Then, while time serves, and we are but decaying, Come, my Corinna, come, let's go a-Maying. RECAP

JIM LEHRER: Again, the major stories of this Friday, the 15-member European Union took a major step toward a single currency by designating 11 countries to join in a new monetary union. IRS Commissioner Charles Rossotti promised the Senate Finance Committee he would investigate every allegation against the agency, and Israeli Prime Minister Netanyahu said he might meet Palestinians halfway in a dispute over troop withdrawal in the West Bank. We'll see you on-line and again here Monday evening. Have a nice weekend. I'm Jim Lehrer. Thank you and good night.