The MacNeil/Lehrer NewsHour

MR. LEHRER: Good evening. Leading the news this Wednesday, Pres. Bush and the House leadership agreed on a federal pay raise and ethics proposal. Lech Walesa told Congress Poland wanted a U.S. partnership, not charity, to solve its economic problems, and the President of El Salvador claimed the rebel offensive has been stopped. We'll have the details in our News Summary in a moment. Charlayne Hunter-Gault is in New York tonight. Charlayne.

MS. HUNTER-GAULT: After the News Summary, we go first to a News Maker interview with visiting Israeli Prime Minister Yitzhak Shamir. Next we'll have extended excerpts from Solidarity Leader Lech Walesa's historic speech on the floor of Congress. Then Correspondent Elizabeth Brackett reports on one German-American community's reaction to the dramatic developments in Berlin,and finally the role of the federal government in arts funding. Chairman of the National Endowment of the Arts, John Frohnmayer, debates Art Gallery Director Susan Wyatt. NEWS SUMMARY

MR. LEHRER: A deal was struck today to raise the pay of House members and other top federal officials. Pres. Bush and the House leadership signed off on the package that would raise annual salaries from $89,500 to $120,700 and impose limits on honoraria and other outside income. House Minority Leader Bob Michel told reporters the pay proposal was fair because of its limits on outside income.

REP. ROBERT MICHEL, Minority Leader: Either because of our ineptness around here, our incapability, or our cowardice in addressing the subject of pay for members, we have resorted to secure this route by way of outside income or honorariums. And what has developed from that is quite frankly a two tier system around here that I find very obnoxious. So I think what the American people out there demand, No. 1, is that we have to address this issue as we're obliged to do under the Constitution that we do it up front and forward and with a yay and nay vote.

MR. LEHRER: A separate pay and ethics package is being worked on in the Senate. Charlayne.

MS. HUNTER-GAULT: Lech Walesa got a roaring hero's welcome to the Congress of the United States today. The leader of the Solidarity movement in Poland was there as the second foreign private citizen ever to address a joint session of the House and Senate. He told them U.S. aid was necessary to help save his nation's economy.

LECH WALESA: [Speaking through Interpreter] I know that America has her own problems and difficulties, some of them very serious. We are not asking for charity, we are not expecting philanthropy, but we would like to see our country treated as a partner and a friend. We would like cooperation under decent and favorable conditions. We would like Americans to come to us with proposals of cooperation, bringing benefits to both sides.

MS. HUNTER-GAULT: This afternoon Pres. Bush called on American business and organized labor to do their part for Poland. He spoke at the AFL-CIO's annual convention.

PRES. BUSH: Today I appeal to the unions and call on the American labor movement, the business community, and government to look for ways to support a partnership for progress in Poland for the sake of a nation and a people that need and deserve our help. Labor, business, and government can and should be partners and activists for Poland's future.

MR. LEHRER: Soviet Leader Mikhail Gorbachev had some cautionary words today about changes in the Communist world. We have a report narrated by David Simmons of Worldwide Television News.

MR. SIMMONS: It was the second day in a row that Mikhail Gorbachev commented on the dramatic changes in East Germany. In a speech to students in Moscow, the Soviet leader made it clear that he is firmly opposed to the reunification of the two Germanies. Gorbachev said the world community has recognized the division of Germany since the second world war and talk of reunification is not a matter of topical politics. He said it would constitute interference in the affairs of both West and East Germany. The Soviet leader also lashed out at the West for suggesting that changes in the East Bloc signified a failure of socialism. That he said is simply wishful thinking. Gorbachev said reforms in socialist countries go hand in hand with Soviet attempts to end the cold war.

MR. LEHRER: Yesterday Gorbachev warned the West against exporting capitalism to the Eastern Bloc. That comment brought a response from the White House today. Spokesman Marlin Fitzwater said the U.S. holds capitalism as an example for all but we do not try to dictate it to these countries.

MS. HUNTER-GAULT: There was more heavy fighting in El Salvador today between government troops and leftist rebels. It's still not clear which side has the upper hand. El Salvador's president said the rebel offensive has been stopped. But the rebels are reported to be in control of several neighborhoods in the capital, San Salvador. The Salvadoran air force bombed some of those areas today. More than 650 people have been killed in the fighting. In the South American country Bolivia today the government declared a state of emergency to try to end a teachers strike. Police arrested at least 500 teachers and other workers. They were still on a hunger strike for higher wages. There have been several violent clashes between police and pro labor protesters during the past week.

MR. LEHRER: Israel today ordered more than 1 million Palestinians in the occupied territories to remain in their homes. The government said the action was taken to head off violations from demonstrations to celebrate the first anniversary of the declaration of an independent Palestinian state. The celebrations have been going on anyway in many Palestinian villages. The outlawed Palestinian flag was displayed. There were also some clashes with Israeli soldiers. More than a dozen Palestinians were injured. Israeli Prime Minister Yitzhak Shamir was in Washington today. He met this afternoon with Pres. Bush at the White House. How to get talks started about elections in the occupied territories was a major agenda item. We will have a News Maker Interview with Prime Minister Shamir right after this News Summary. There has been an apparent new hostage taking in Lebanon. An unknown group called The Just Revenge claimed in a statement to Western news agencies to have kidnapped an American woman, as well as a German man and his seven year old son. The American was identified as 54 year old Deborah Ferand of San Francisco. Her kidnappers said she was a publisher and journalist. The group sent passport photocopies to prove their claim. There was no further confirmation.

MS. HUNTER-GAULT: The Pennsylvania State Senate last night approved a new law restricting abortions. The vote was 33 to 17 in favor of a bill that bans most abortions after 24 weeks of pregnancy and requires the husband to be notified. The Pennsylvania House passed it last month. Democratic Gov. Robert Casey has already said he would sign it. When that happens, Pennsylvania will become the first state to enact new abortion restrictions since the Supreme Court's Webster decision. That's our summary of the day's news. Still to come Israeli Prime Minister Shamir, Solidarity's Lech Walesa, one German-American community reacts to the historic developments in Berlin, and the federal government's role in arts funding. NEWS MAKER

MR. LEHRER: We go first tonight to a News Maker Interview with the Prime Minister of Israel Yitzhak Shamir. He is in the United States on a long planned private visit that last week had added to it a talk with Pres. Bush. That talk came off this afternoon at the White House. It came at a time of some tension over getting negotiations about elections in the occupied territories. Shamir proposed the elections. Egyptian Pres. Mubarak and then Sec. of State Baker proposed ways to get talks started about those elections. But Shamir and the Israeli Government have said no if the Palestine LiberationOrganization is involved. I spoke with Prime Minister Shamir this afternoon at his hotel shortly after his meeting with Pres. Bush. Mr. Prime Minister, welcome.

PRIME MINISTER SHAMIR: Thank you.

MR. LEHRER: Did you and Pres. Bush come to any agreements this afternoon about the Palestinian peace process?

YITZHAK SHAMIR, Prime Minister, Israel: It was a friendly discussion concerning also the Palestinian peace forces and other questions too. And while the purpose of the conversation was not to reach an agreement, but we have discussed the possibilities of reaching an agreement.

MR. LEHRER: But you did not reach one?

PRIME MINISTER SHAMIR: Well it was not on the agenda. I have discussed it with the Secretary of State before meeting the President and I think that further discussions will go on. It's not an easy matter.

MR. LEHRER: Is the heart of the disagreement the potential involvement of the Palestine Liberation Organization in the discussions?

PRIME MINISTER SHAMIR: Well, I think that an involvement of the PLO has to be considered as an obstacle because the PLO is not interested in getting peace with us. Their real aim is the destruction of Israel, the disappearance of our state, and establishing a Palestinian state instead of our state, therefore, I don't think they are a partner for peace.

MR. LEHRER: Now does Pres. Bush and Sec. Baker, do they want you to include the PLO in these discussions, preliminary discussions about the elections?

PRIME MINISTER SHAMIR: No, they don't claim that they want us to sit down together with the PLO, because they know that we are not ready to negotiate with the PLO. But they want to get an agreement between us and the Palestinians about a peaceful solution of our conflict.

MR. LEHRER: But of course, as you know, the PLO claims, and other Palestinian leaders say the PLO does speak for them.

PRIME MINISTER SHAMIR: Well, there is such claims, but we say that a PLO were never elected by any democratic vote and what we would like to have is a free election by the Palestinians living in the territories of Judea, Samaria, and Gaza. We want them to elect their representatives with whom we will negotiate. And we're convinced that by negotiations we will get an agreement, we will get a peaceful solution of our conflict with them.

MR. LEHRER: But in these preliminary discussions, why do you feel that Israel has the right to decide who speaks for the Palestinians?

PRIME MINISTER SHAMIR: We don't want to decide about it. We want to have elections.

MR. LEHRER: I mean the discussions leading up to the elections.

PRIME MINISTER SHAMIR: Ah, well, in these discussions we want to sit down with a group of Palestinians that are not nominated by the PLO, because we don't want to create a precedent that will jeopardize our position in the future. We want to have a group of Palestinians that do not belong to any group that opposes the peace and to discuss with them the modalities of the elections.

MR. LEHRER: Again, the question, why is it that you feel that Israel should make the decision as to who should speak for the Palestinians, rather than the Palestinians make that decision?

PRIME MINISTER SHAMIR: We don't want to take the decision who will talk with us. We want to be partners to such a decision because these people will be our partners. And we have to have a say about who will be our partner. We don't want the PLO to be our partner because we know they are opposed to the principles of our peace initiative, and that it's useless to talk with people who are not interested in peace. It's useless to talk with them about peace.

MR. LEHRER: What does Israel have to lose then by talking to them if that is the case, if that turns out to be the fact that they're not interested, then they are exposed, are they not? In other words, what is it that Israel jeopardizes by sitting across the table?

PRIME MINISTER SHAMIR: Well, you know, if it will talk with the PLO, it will give them a legitimization. And then the PLO will say to all the Arabs and all the world, you see Israel recognizes that we are the only representatives of the Palestinians. And we don't want to give them this privilege.

MR. LEHRER: What do you say to those who say, look, if Israel wants peace, the only way to negotiate it is with the enemy, not with friends?

PRIME MINISTER SHAMIR: It's right. We are ready to talk with all of our enemies, for instance, with all the Arab countries that are still until now in a state of war relations with us. We want to speak with all the Arab countries and with all the Palestinians on one condition, if they are interested in peace. You have to speak with your enemy if you want peace, but you have to be convinced that he too, your enemy, wants to get peace with you. But it's useless to talk with an enemy who is not interested in peace, is only interested in your disappearance.

MR. LEHRER: Did you tell Pres. Bush what you've just told me about this, about the Israeli position?

PRIME MINISTER SHAMIR: Not for the first time and I've told it to the Secretary of State. And this is the conclusion of the President, Pres. Bush, and of Sec. Baker is that they have not to compel us to sit down and negotiate with the PLO.

MR. LEHRER: The PLO says, as I'm sure you know, that as long as Israel keeps this position, there will be never any discussions and that for all practical purposes, the elections and the preliminary discussions will never occur. Do you agree with that? Do you see any way that this obstacle can be overcome?

PRIME MINISTER SHAMIR: We have to overcome this obstacle and we are looking for Palestinians who are not of the same opinion of the PLO. And we know that there are such Palestinians, but unfortunately they don't dare now to say something against the opinions of the PLO because of their terrorist methods, of the intimidation by the PLO. But there are many Palestinians who would like to negotiate with us and who are very eager to look together with us for a peaceful solution. We know it very well and until we will give more and more importance and prestige to the PLO, these Palestinians will be discouraged, and they will never dare to say something that could lead them and us to peace.

MR. LEHRER: Meanwhile, in other words, nothing is going to happen, is that right?

PRIME MINISTER SHAMIR: No. I don't think, we don't despair, not at all. I think we together with the United States Government and together with some Arab governments who are real interested in peace, we have to find out some Palestinians who will be ready to discuss with us and to work out with us a peaceful solution.

MR. LEHRER: Changing subjects, Mr. Prime Minister, what is your reaction to what has been happening at the Berlin Wall and elsewhere in East Germany and East Berlin?

PRIME MINISTER SHAMIR: It is fascinating, you know. We admire these revolutionary changes we see now in the world, it's a real miracle. You see such huge changes without bloodshed. It's a real miracle and I think it's a great victory of the free world, of the Western world, and the democratic world. It's a great victory of the United States, I must say it, and well, I hope that this victory will change all the reality of our world, of our life.

MR. LEHRER: Are you concerned at all about this talk about a reunified Germany?

PRIME MINISTER SHAMIR: Well, there are going on some debates, you know. My attitude and the attitude of the Jewish people has a special significance in this respect, and that we have our very serious doubts about such a change in the status of Germany. The reunification of Germany for us, it's a very grave matter, I must say, but I think it's still, it's premature to talk about it. I don't think it is going to arrive.

MR. LEHRER: How would you characterize the Jewish attitude toward the Germans and the German people right, Germany?

PRIME MINISTER SHAMIR: Well, it's very simple. All of us remember what the German people, what the Germans did to us when they have been united and strong, strong militarily. And the German people, the great majority of the German people decided to kill millions of Jewish people and any body of us who think that if they will have the opportunity again and they will be the strongest country in Europe and maybe in the world, they will try to do it again. I don't know if it's true, if it's a based fear, but anyhow anybody could understand it.

MR. LEHRER: With all of these things happening, as you say, a miracle in Eastern Europe, is it possible that the same kind of miracle could happen in the Middle East, in other words, that these enemies of, these implacable enemies of years and years ago, can get together and suddenly start talking and doing these things?

PRIME MINISTER SHAMIR: Thank you for this question. We are thinking about it and it is, you know, it's worrying that when we see it in Europe, we don't see any sign of it in our area, in the Middle East. We don't see any trend, any effort to more democracy towards more peace, nothing at all. What we see is the same hostility, the same animosity, the same fanaticism. We see the gap and well, we pray, pray God that maybe this, what happens now in Europe will come to our area too, maybe. We pray for it.

MR. LEHRER: Finally, there have been reports in the U.S. press about a military hardware relationship between Israel and South Africa. What exactly is that relationship?

PRIME MINISTER SHAMIR: There is a lot of exaggeration in all this information that we see since many years. It's well known that we have sometimes some ties with South Africa because of the important Jewish community that lives in South Africa. And there were some ties and we decided because of the various voices in the world and because we are very strongly against apartheid, we have decided in '87 to reduce our ties with South Africa and not to make any contracts with this country. But we have decided at the same time to still keep the existing contracts until they will expire, and I think that in a few years it will come to an end.

MR. LEHRER: Do some of these contracts involve nuclear missiles, nuclear weapons?

PRIME MINISTER SHAMIR: Oh, God forbid, Israel doesn't have any nuclear arms. It is our policy not to introduce nuclear arms in the Middle East, not to be the first to introduce any nuclear arms in our region and we will not do it. We will not be the first to do it and we will not transfer any technologies of such kind to other countries.

MR. LEHRER: Did Pres. Bush raise this with you in your meeting today?

PRIME MINISTER SHAMIR: He asked me about it and I gave him the same answer.

MR. LEHRER: Just what you just told me?

PRIME MINISTER SHAMIR: Yes. Yes.

MR. LEHRER: My final question is this. This is your first major meeting, is it not, with Sec. Baker and Pres. Bush of any length?

PRIME MINISTER SHAMIR: It's the second meeting. I met the President exactly six months ago when we decided to launch our peace initiative. And I was at this time delighted by the fact that the President and Secretary decided to support our peace initiative.

MR. LEHRER: My question is this, sir. Have you noticed a change in the attitude of this administration from that of the Reagan- Shultz administration toward Israel?

PRIME MINISTER SHAMIR: There are many many questions about it and you will know that every administration has its own character and I cannot say during the administration, the former administration of Reagan, Pres. Reagan, Sec. Shultz, there were not some difference of views between them and us, and I remember that when Sec. Shultz was nominated there were many doubts in Israel and the Jewish community if Sec. Shultz will be friendly enough because he came from leading an Arab company. But in the end we have seen that Sec. Shultz is a great friend of us and all of us admire him and Pres. Reagan. And I think that the same will happen with this recent administration of the United States.

MR. LEHRER: Mr. Prime Minister, thank you very much.

PRIME MINISTER SHAMIR: Thank you.

MS. HUNTER-GAULT: Still ahead, Lech Walesa meets Congress, German-Americans on the historic changes in Berlin, and the government and the arts. FOCUS - SALUTE TO SOLIDARITY

MS. HUNTER-GAULT: Next tonight Lech Walesa speaks to Congress. The Polish labor leader was the second private citizen in U.S. history to speak to the House and Senate. The first was the Marquis De Lafayette in 1824. In his speech this morning, Walesa thanked those in the U.S. who have supported the Solidarity movement and repeated his request for more help for Poland. Warmly received by the Congress, Walesa began his speech with a nod to the revolutionary times in America.

LECH WALESA: [Speaking through Interpreter] We the people, with these words I wish to begin my address. I do not need to remind anyone here where these words come from and I do not need to explain that I, an electrician from Gdansk, am also entitled to invoke them. The world remembers the wonderful principle of American democracy, government of the people, by the people, for the people. I too remember these words, I a shipyard worker from Gdansk, who has devoted his entire life along with other members of the Solidarity movement to the service of this idea, government of the people, by the people, for the people. Against privilege and monopoly, against violations of the law, against the trampling of human dignity, against contempt and injustice, looking at what is happening around us today we may state positively that the Polish road of struggle for human rights, struggle without violence, the Polish stubbornness and firmness in the quest for pluralism and democracy, so many people today, and even nations how to avoid the greatest dangers peacefully and prudently with their eyes open to dangers but not giving up what is right and necessary, the Poles gradually paved the way for historic transformations. We are joined along this way albeit to various extent by others, Hungarians and Russians, the Ukrainians and the people of the Baltic Republic, Armenians and Georgians and in the recent days the East Germans. We wish them luck and rejoice at each success they achieve. We are certain that others will also take our road since there is no other choice. We believe that assistance extended to democracy and freedom in Poland and all of Eastern Europe is the best investment in the future and in peace, better than tanks, warships and war planes, an investment leading to greater security. I wish all of you to know and to keep in mind that the ideals which underline this glorious American republic and which are still alive here are also living in a far away Poland. And although for many long years, efforts were made to cut Poland off from these ideals, Poland held her ground and is now reaching for the freedom to which she's justly entitled. Together with Poland, other nations of Eastern Europe are following this path. The wall that was separating people from freedom has collapsed. And I hope that the nations of the world will never let it be rebuilt. FOCUS - VIEW FROM GERMANTOWN

MR. LEHRER: Now some American voices with a special interest in East Germany's political changes. Elizabeth Brackett reports from Chicago.

MS. BRACKETT: There are neighborhoods in Chicago as in many large cities where it's hard to tell if the old country has been left behind. On this block on Chicago's North side, the posters on the street, the shops' signs, the faces that pass by speak more of Europe than the nation's Midwest. Inside the shops, German is heard as often as English. The shelves are full of holiday treats like chocolate and goose liver pate. But the talk is not of the upcoming holidays here. It is of course of the stunning events in Germany, the country where many here grew up. Paula Meyer was orphaned during the Second World War. She has been back to Germany only once, since an American uncle adopted and raised her. Still she was thrilled by what has happened in her native country over the last several weeks.

PAULA MEYER: It's absolutely great. Finally, it's finally happening.

MS. BRACKETT: Did you think you would see this in your lifetime?

MS. MEYER: No. I was hoping, I was always hoping it was going to happen, but then somehow you know, there's always this tension between East and West and you don't think it's, but I don't know, I guess one thing led to another and it just did, and it's wonderful.

MS. BRACKETT: Retired businessman Bernard Wallner left Germany 30 years ago. He said he has never heard from his relatives as often as he has this week.

BERNARD WALLNER: My sister calls me every day. She lives in Dusseldorf, she's 89 years old, she of course has nothing else to do but watching television, and she's calling me every morning, Bernd, have you seen that, have you noticed that. I said, yes, Martha, it's all right, I read newspaper, watch radio, so I know what's going on.

MS. BRACKETT: Americal Hegh, the largest German American newspaper in the country, rolls off these presses. Demand for the paper has never been higher than it has been this week. The paper's editor, Werner Baroni, sitting with friends at a favorite German restaurant, says he has never seen anything like the events of the last week.

WERNER BARONI: It's the greatest thing in German history, what happened in the last three, four days in East and West Berlin. Just imagine millions of people come and meet after 28 years of a wall of shame, I call it, and after 40 years of German, so called German Democratic Republic.

MS. BRACKETT: Did any of you expect to see this in your lifetime?

ERICH HIMMEL: I really didn't. I was stationed in Germany as a United States soldier and I was there in '61 when they put up the wall, which we were on alert. And believe me to me, to answer your question, I don't think I would in my lifetime see the wall going down.

INGE HIMMEL: Even though we're citizens we still think German and they are still German and we are still German in our hearts. So that's why we feel so happy that they can get out now and are free like we are so they can go wherever they want to go.

MS. BRACKETT: All German-Americans seem to share the same joy in seeing the wall lose its domination over their former countrymen. But when it comes to the question of reunification, there are different points of view.

MS. MEYER: I hope that they will be one Germany again, but what I hear, now I just hear what I hear on the news, it doesn't quite sound that way but I mean I didn't think this was happening, so there's always hope.

MS. BRACKETT: Why is that important, a united Germany? What does it mean to you?

MS. MEYER: It's just that it was that way before and why should it be split down the middle? There really was no reason to split it down the middle in the first place.

MR. BARONI: I cannot see it, that there will be reunification. West is a completely free democratic state and East Germany, as we all know, they have now to prove and to come up to satisfy after 40 years their own people, politicalwise spoken. It's about time I think they start doing something to satisfy their own people.

MS. BRACKETT: How about reunification?

MR. HIMMEL: I think it took 28 years to get the wall down and I am almost positive if we wait another, I hope not this long, but another 28 years, there will be reunification.

MS. BRACKETT: Wolfgang Holke's German music entertained the diners. He too has been thrilled by the events in Germany, but more than the others, he feared the talk of reunification.

WOLFGANG HOLKE: Reunification maybe should come within a long time from now, because right now they have been two different states and people that to my opinion they've been still both Germans, but they are different, differently raised, they have a different opinion and I think it would be healthy for Europe to have it this way.

MS. BRACKETT: What do you fear about the process moving too quickly?

MR. HOLKE: If it goes too quickly and if people push in that direction that they say Germany should be unified or solid, I would fear that they close it up again, that they cannot say listen, we can't handle it, then we're going to get it back the way it was before and that would be terrible.

MS. BRACKETT: Wladyslaw Kaminski has a different reason to fear German reunification. A Polish Jew, his entire family was killed in concentration camps.

WLADYSLAW KAMINSKI: We don't really trust the German people. They are the richest country in Europe now, richer than the economies, they are very good.

MS. BRACKETT: And you are still afraid.

MR. KAMINSKI: And I'm still afraid what could happen to my children or grandchildren.

MS. BRACKETT: There are some people who are somewhat concerned about reunification, particularly Jewish people. What's your reaction to that?

MR. HIMMEL: I think that's nonsense. I think they are scared if we have a unified Germany to get too strong again not only economywise but politicalwise and I think that that's, I can't say what I thin, but that's past, 40 years ago also.

MRS. HIMMEL: Why don't they just forget it? It's past and it's done with. War is war. So they shouldn't be afraid, because the young people, they don't even know what it was then, so why be afraid?

MS. BRACKETT: The talk continued well into the night at this Chicago restaurant as it undoubtedly will over the weeks to come. East German-Americans will closely follow additional developments in a storymost of them never expected to see in their lifetime. FOCUS - ARTFUL ARGUMENT

MS. HUNTER-GAULT: Next tonight the federal government's role in funding the arts. In a controversial decision last week, the National Endowment for the Arts decided to withdraw funding from a New York City exhibit on AIDS which opens tomorrow. We'll hear a debate on that decision in a moment. But first some background. The role of government and sponsoring activities in the arts has been debated for a long time. That debate was reignited last summer by an exhibit of photographs from the late artist, Robert Maple Thorp. Seen here in a self portrait, Maple Thorp died last March of AIDS at the age of 42. The exhibit included more than 150 photographs. Among them were flowers and nudes of men and women. But the controversy focused on Maple Thorp's x-rated work male homosexual sex acts and sadomasochism. The touring exhibit was supposed to open at the prestigious Corcoran gallery in Washington, D.C., but the controversy caused the gallery board to cancel. The exhibit opened at another Washington gallery instead. The Corcoran's decision was criticized by the arts community around the country as a threat to artistic freedom. The photographs also caught the attention of Capitol Hill. Efforts by Sen. Jesse Helms to restrict the National Endowment for the Arts and the National Endowment for the Humanities from funding obscene art, drew lively debate.

SEN. JESSE HELMS, [R] North Carolina: I'm not going into detail about the crudeness of the art in question. I don't even acknowledge that it's art. I don't even acknowledge that the fellow who did it was an artist. I think he was a jerk. And I said that earlier. But in any case, there's a fundamental difference between government censorship, the pre-emption of publication or production, and the government's refusal to pay for such publication and production. Artists have a right, it is said, to express their feelings as they wish. Only a Philistine would suggest to the contrary. But no artist has a pre-emptive claim on the tax dollars of the American people to put forth such trash.

SEN. HOWARD METZENBAUM, [D] Ohio: There is a strong concern that I have that we're gradually encroaching more and more in the whole area of the Congress telling the art world what is art, what isn't art, what funds can be spent for, what they can't be spent for. I don't think that we'll adding to the fulfillment of the culture of this nation if we do that.

MS. HUNTER-GAULT: From that debate emerged new legislation that restricted federal funding for obscene art, but did not satisfy conservatives by ruling it out completely. The law left it up to the National Endowment for the Art and the National Endowment for the Humanities to judge what was obscene. It defined obscene as including but not limited to depictions of sadomasochism, homoeroticism, the sexual exploitation of children or individuals engaged in sex acts, and which, when taken as a whole do not have serious literary, artistic, political or scientific value. The effects of the law which was passed a month ago were first felt last week. The center of the storm this time is Artists Space, a New York City gallery, and an exhibit of art works depicting the emotions of AIDS patients and their friends. Last Wednesday, John Frohnmayer, the new chairman of the National Endowment for the Arts, suspended a $10,000 federal grant for the exhibit. He said he was doing so because the exhibit's catalogue made derogatory references to political and religious leaders, among them JohnCardinal O'Connor, the Roman Catholic Archbishop of New York, and Sen. Jesse Helms. Both men are viewed by the gay community as insensitive on the issue of homosexuality. Frohnmayer said he withdrew support because a large portion of the content had become political rather than artistic in nature. Earlier this week, after an angry reaction from the arts community, Frohnmayer defended his actions, saying that the catalogue and the show were part of a unified whole. One NEA panel met twice this week with Chairman Frohnmayer to protest the cancellation of the grant. This morning Frohnmayer met with representatives of the Artists Space and other artists to discuss their differences. Earlier I spoke with Susan Wyatt, director of Artists Space, and Mr. Frohnmayer. I asked about the purpose of his trip.

JOHN FROHNMAYER, Chairman, National Endowment For The Arts: The reason that I came to New York was to talk and to listen and to hopefully exchange ideas with the artists and with Artists Space, and to try to see how we could work through this situation together. It's a difficult situation and I think it's difficult for all of us.

MS. HUNTER-GAULT: But I mean, what would you, you've already said that you thought that the exhibit constituted too much, had too much politics in it.

MR. FROHNMAYER: You're a ways behind on that. I said I made a mistake by using the word political. My reasons for doing what I did after consulting with the National Council on the Arts is that the --

MS. HUNTER-GAULT: The National Council, its relationship is --

MR. FROHNMAYER: The National Council is a 26 member presidentially appointed body of distinguished artists from around the country who are there to make policy and to advise the chairman of the National Endowment.

MS. HUNTER-GAULT: And so you consulted with them, and then what happened?

MR. FROHNMAYER: Yes, I consulted with the National Council and then made the decision to suspend funding on this grant because, for two reasons, the first being the application and what they actually did were different. And secondly, we felt that the show did not have significant artistic merit.

MS. HUNTER-GAULT: Is that how you see his objection to what's going on here, Ms. Wyatt?

SUSAN WYATT, Art Gallery Director: Well, Mr. Frohnmayer stated different kinds of objections that he's had to the show. I mean, all I can do is respond to what he's said.

MS. HUNTER-GAULT: Your understanding is --

MS. WYATT: My understanding, I would disagree with Mr. Frohnmayer strong, I think we did fulfill exactly what we said we would fulfill. I'm not going to deny that over the course of the year that a show dealing with the topic of AIDS that deals with a number of living artists might change. Our specific application included art work that was being commissioned specifically for the show, so it's very hard to project a year in advance specifically, you know, exactly how a show is going to turn out. But I think that in principle we have fulfilled the grant. And also I think that all the work in the show is art, and you know, that is truly the reality of the situation.

MS. HUNTER-GAULT: Is that what is at issue? Is it art or is it politics?

MR. FROHNMAYER: No, I don't think that is the issue. The first issue is the integrity of the process. We feel that if your grant application says you're going to do X, and you do A instead, then I think we ought to have an opportunity to look at that again and perhaps refer it back to the original panel of experts that decided on it. That's one significant issue here.

MS. HUNTER-GAULT: But the overall impression seems to be that the, based on, as Ms. Wyatt said, the series of statements that you made first that it was the political content, the criticism of Cardinal O'Connor, and the references to Jesse Helms, I mean, that was not troubling to you and did not enter into your decision on this project?

MR. FROHNMAYER: What I did is not very artfully state what I was doing by using that word. What happened is that the artistic focus of the show really was lost and what turned out to be the show in its present form was not and is not sound artistically.

MS. WYATT: I would disagree with that, of course, strongly. I do think we fulfilled our application. We applied for a show about AIDS. This is an issue that's obviously affected the art world, the whole community, our whole society tremendously, and specifically individual artists tremendously and artists deal with life when they're creating their work. Art is a reflection of life. And so I would disagree very strongly with that characterization of the show.

MS. HUNTER-GAULT: In your view, I mean, do you feel that Mr. Frohnmayer in making this decision has intruded into something where the government has no business?

MS. WYATT: I think that the fact that we have a grant award letter which we would view as a contract and that funds are being suspended or withdrawn is very problematic. I mean, I think the whole peer panel system is very much based on our notion of our American values in a way, on the whole notion of a trial by your peers, or a jury of your peers.

MS. HUNTER-GAULT: And by peer panel you mean the group that advises the, a group of artists --

MS. WYATT: Basically at the Endowment all applications are reviewed by a group of peers, essentially experts in the field, whatever field, and so those decisions of the peer are brought to the National Council and are finalized by the chairman of the Endowment.

MR. FROHNMAYER: And I would say that we are very much wedded to that system. It has worked exceptionally well over the 24 years that the National Endowment has been operating. I hoped that we were making some progress toward procedures that will really protect this system and give some comfort to the artists.

MS. HUNTER-GAULT: Are you comforted by the discussions that you had?

MS. WYATT: I'm very happy that Mr. Frohnmayer was able to come. I think it was very important for him to talk to the community here which has been extremely concerned not only about the withdrawal of this grant, but just the issues in general over the course of the last six months as this particular controversy about public funding for the arts has developed, and I think that there has been a lot of fear and a lot of confusion about this new language which is part of the 1990 Appropriations Act, and people do not understand how to practically apply that language, and really before this issue came up in terms of discussing this particular grant with Mr. Frohnmayer, I went with some colleagues of mine to encourage this kind of dialogue.

MS. HUNTER-GAULT: But at the beginning of this exhibit you called Mr. Frohnmayer, did you not, to say that there was political content in the brochure that you thought might be troublesome?

MS. WYATT: I actually didn't call Mr. Frohnmayer. I want to correct that. What I did was I dealt through my normal channels with the program specialist that deals with the particular category in which we applied and I was concerned because I have been aware of what's happened over the course of the last six months that certain art works and certain titles and phrases have been used out of context and have been used basically as a political tool by some congress people as a way of trying to destroy public funding for the arts.

MS. HUNTER-GAULT: Mr. Frohnmayer, people are saying in the art community that with this decision you were sending a message, sending a signal that political content would not be tolerated in the arts. How do you respond to that?

MR. FROHNMAYER: That's unfortunate and I think it's a misstatement of my position and an overreaction frankly. I have a job at the National Endowment to walk a very difficult line between the public trust, on the one hand, and absolute artistic freedom on the other. And that is a very difficult line to walk and I'm trying to do it the best I can. And I hope that the artistic community or everybody else, for that matter, will not judge this one action and say that this one out of probably 4500 grants that we will give this year is going to set any kind of a tone or precedent. We're simply trying to react to the situation and walk that very fine line.

MS. HUNTER-GAULT: Ms. Wyatt, what do you feel based on your conversations and meetings with members of the artistic community is going to be the reaction to this? I mean, do you feel that he is sending a message that there is going to be a tougher standard of --

MS. WYATT: I think that arts organizations all across the country are watching this and that's why I'm extremely concerned about it. We have been very concerned about the issue of freedom of expression and public funding over the last six months. But I think that now people are really starting to understand that this is really a free speech issue and a question of censorship and/or self-censorship.

MR. FROHNMAYER: I don't agree with that, I really don't. I think what we need to do is get into place under this new legislation adequate procedures so that we can safeguard that artistic freedom and at the same time not violate the law.

MS. HUNTER-GAULT: What is going to be the test and who is going to make the decision?

MR. FROHNMAYER: The test is going to be the same as it has always been. I mean, there's no departure here as far as the Endowment's procedures. I think what we need to do is to put in some additional procedures to respond to this new legislation, and those, I mean, I don't know what those are going to be. That's what we were talking about this morning, to try to get some kind of procedure that will give comfort to the arts community and still will obey the law. We are a federal agency, we are subject to the law; we have to obey the law. So what we need to do is figure out how we can do that and protect artistic freedom to the maximum extent possible.

MS. HUNTER-GAULT: Do you see that that is what is necessary at this point?

MS. WYATT: Well, I think that the law is pretty unworkable and very vague and very hard to understand. So I would hope that the National Endowment for the Arts and Mr. Frohnmayer would do everything that they can to try to advocate with Congress that that law is not workable, which I don't believe the art community believes it is. And that's what concerns me is that language and also the fact that punitive cuts have been taken to the NEA's budget for grants that were perfectly valid and for art work that was perfectly valid and that artists and institutions have been sort of dragged through the mud on this basically.

MR. FROHNMAYER: It's important really that --

MS. HUNTER-GAULT: Do you agree with that?

MR. FROHNMAYER: It's important that we work together.

MS. HUNTER-GAULT: But are artists being dragged through the mud?

MR. FROHNMAYER: There have been some tough times for artists. There is no question that artists have taken a shellacking over the last eight months, and I think because of that it's really important that artists and the NEA figure out how to get the message of the good that the arts are doing in this country out to the people.

MS. HUNTER-GAULT: Just very briefly because we have to go, what do you think is going to happen here? Are you going to give them the money, or is this now a dead issue?

MR. FROHNMAYER: I have looked at the show, I've talked to the people there. I think we had a good discussion. I'm going back to Washington, and I'm going to consult with the National Council and reflect on this and issue a statement in due course.

MS. HUNTER-GAULT: So it's not dead yet?

MR. FROHNMAYER: Well, we're certainly trying to resolve it.

MS. HUNTER-GAULT: All right. Well, Mr. Frohnmayer and Ms. Wyatt, thank you very much for being with us. RECAP

MR. LEHRER: Again the major stories of this Wednesday, Pres. Bush and the House leadership agreed on a pay raise and ethics proposal for House members, and senior federal workers, Lech Walesa told a joint meeting of Congress that Poland wants a partnership with the United States, not charity, and the President of El Salvador claimed the rebel offensive has been stopped. Good night, Charlayne.

MS. HUNTER-GAULT: Good night, Jim. That's our Newshour for tonight. We'll be back tomorrow. I'm Charlayne Hunter-Gault. Thank you and good night.