The MacNeil/Lehrer NewsHour

MR. MacNeil: Good evening. Leading the news this Friday, the House rejected the deficit cutting plan. President Bush threatened to let the government shut down without a budget deal, and the nation's unemployment rate climbed to a 2 1/2 year high. We'll have details in our News Summary in a moment. Roger Mudd's in Washington tonight. Roger.

MR. MUDD: After the News Summary, we'll spend most of the Newshour look at the impact of the shattered budget agreement [FOCUS - BUDGET BUST]. After extended excerpts of last night's dramatic late night House floor debate we talked to four members of the Congress about what happened and what about comes next, and we get the political analysis [GERGEN & SHIELDS] of Gergen & Shields. Then Charlayne Hunter-Gault continues her series of conversations with [SERIES - TOUR OF DUTY] soldiers stationed in the Persian Gulf, tonight Army Captain Cynthia Mosley. NEWS SUMMARY

MR. MacNeil: President Bush decided to stare down the Congress today after seeing his budget deal soundly rejected by the House of Representatives last night. The White House said it would let the federal government shut down if no new budget package was passed by midnight when current spending authority was due to expire. Congressional leaders plan to extend it with an emergency funding resolution, but the White House said the President will not sign it. On Capitol Hill, House Speaker Foley criticized that position.

REP. THOMAS FOLEY, Speaker of the House: There is no excuse, in our view, in the meantime for the disruption to public services, for furloughing the federal workers, for other activities that would be taken in the event that the continuing resolution is not signed, and I hope the President will seriously consider signing it.

MR. MacNeil: President Bush met with his cabinet this afternoon. They discussed the impasse and the possibility of a shutdown. Budget Director Richard Darman said only services needed to protect life and property would be exempt. The nation's unemployment rate hit its lowest level in 2 1/2 years. The government said that September's rate went up for the third consecutive month to 5.7 percent. It's the first time the Index has increased three times in a row since the 1981 recession. That news and the budget impasse sent the financial markets into a tailspin this morning. Wall Street recovered later in the day after Britain said it would begin linking the pound to other European currencies. After opening losses of nearly 60 points, the Dow Jones Industrials ended the day down slightly. Roger.

MR. MUDD: The old arms race of the '60s and the '70s is becoming the arms control race of the '90s. Sec. of State Baker and Soviet Foreign Minister Shevardnadze met in New York today to complete their second major arms control agreement in one week. This one called START, Strategic Arms Reduction Treaty, would reduce each side's nuclear arsenals by about a third and some of the heaviest and most lethal weapons by about a half. Sec. of State Baker said he and Shevardnadze must negotiate three main obstacles, including whether each side would be allowed to transfer nuclear missiles to their allies. Presidents Bush and Gorbachev have said they want to sign the treaty by the end of the year. Earlier this week, Baker and Shevardnadze agreed in principle on cutting back conventional weapons in Europe.

MR. MacNeil: The Pentagon confirmed that Iraq has the technology to produce a high explosive bomb known as a fuel air explosive. The bomb uses highly combustible gases to create a huge fire ball. Today's Los Angeles Times said the bomb has the force of a nuclear explosion. The Pentagon said that was an exaggeration. Iraq presented its version of the Gulf crisis to the United Nations General Assembly today. It accused America and its allies of bringing the world to the brink of a devastating war and of trying to gain control of Middle East oil supplies. Iraq today released four German hostages in what it called a gesture on behalf of German reunification. They were flown to Amman, Jordan, and on to Germany. One of the four men said he'd been held at an Iraqi base along with some British citizens. He said they were treated well.

MR. MUDD: An army rebellion in the Philippines ended tonight. The rebellion was led by one of former President Corazon Aquino's former palace guards, Col. Alexander Noblay. He and his supporters have taken over two military bases on the Island of Mindennow, which is about 500 miles outside the capital of Manila. They surrendered tonight after government airplanes bombed one of those bases. Mrs. Aquino has faced down four other attempts to overthrow her government since she took office four years ago.

MR. MacNeil: A fire swept through a senior citizens complex in Detroit tonight. Five people died from smoke inhalation. Nearly 50 others were injured. Many residents were forced to jump out of windows because the four story building had no fire escapes. Officials said the blaze began in the kitchen of a first floor apartment.

MR. MUDD: A jury in Cincinnati returned a not guilty verdict today in the Mapelthorpe obscenity trial. The Cincinnati Contemporary Arts Center and its director had been charged with pandering obscenity for showing an exhibit of photographs by the late Robert Mapelthorpe. The charges related to seven of the one hundred and seventy-five pictures in the exhibit, photos which depicted homosexual acts and semi-nude children. The jury took three hours to reach the verdict. A judge in Washington, D.C., today gave the go ahead for tomorrow's scheduled launch of the space shuttle Discovery. Anti-nuclear activists had tried in federal court to block the launch because Discovery is carrying a nuclear powered spacecraft. They said they feared an accident would cause a radiation leak. The launch from Cape Canaveral is expected at 7:35 Eastern Time tomorrow morning.

MR. MacNeil: That's our News Summary. Just ahead, pushing the budget fight to the edge of a government shutdown, analysis by Gergen & Shields, more conversation with American servicemen on duty in the Gulf. FOCUS BUDGET BUST

MR. MUDD: Washington is holding its breath this evening not knowing whether the funding guillotine drops at midnight or whether the government can agree on another stay of execution. With last night's defeat of the budget agreement, House leaders are now trying to stitch together a resolution that would keep the government alive for at least a week. The Congress is preparing to be in session over the weekend. The White House has set out closing down orders reminding the executive departments of President Bush's promise to veto any continuing resolution. If he does, all government spending stops at midnight and only those federal employees who are deemed essential go to work. The full effect of a shutdown would not be felt until Tuesday, because Monday is Columbus Day and a federal holiday. It was last night, after a day of chaotic negotiations between the White House and Capitol Hill, that Speaker Tom Foley decided to go ahead with a vote on the budget agreement. Both sides and both parties were not really sure the agreement would attract even the barest majority, but everyone agreed not many votes could be changed by waiting another day. Debate began last night about 8:30, and what follows are highlights of the debate arranged not according to the clock but according to the argument. First, there were those Democrats who opposed the agreement because they said it penalized the middle class.

REP. JAMES TRAFICANT, [D] Ohio: We don't cut foreign aid. We keep shipping money to Japan and Germany. We don't make the rich pay their fair share. We tax mom and dad, and the census goes out and they're trying to tell us that the population is dwindling. Let me tell you, the silent majority is out there. They called your office. They were against this before the President's speech and damn it, they're against it now.

REP. NANCY PELOSI, [D] California: I do not believe it is a statement of our values to say that the wealthy will pay less while increasing the tax burden to the middle class.

REP. RONALD V. DELLUMS, [D] California: We came here to stand our ground and to fight for what we believe in. There are needy people in America. This winter some will die freezing on the streets of this country. What do we do? We increase home heating oil. There are homeless, unemployed people. This budget does not address that. With all due respect, I ask my colleagues not out of expediency and lack of courage but out of the right thing to do, oppose this resolution.

MR. MUDD: Then there were Republicans in opposition because they said it raised taxes without sufficient cuts in spending.

REP. DAN BURTON, [R] Indiana: The American people want a lid put on spending. They don't want new taxes. If we pass this, make no mistake about it, the precipice on which we set rights right now, this recession that faces this nation that we're about to enter, will be exacerbated. Hundreds of thousands of people will lose their jobs and it will be on our heads. We don't need a tax increase right now, folks. We need to cut spending.

REP. WALLY HERGER, [R] California: Clearly the new taxes and agreement will only go to funding new, higher spending, not deficit reduction. This is just one of the many problems of this summit agreement. We get the taxes up front and we wait for spending cuts in out years.

MR. MUDD: Some said they favored the agreement because it was the best that could be had.

REP. JAMES QUILLEN, [R] Tennessee: We've got to do things that we don't want to do. If we have to hold our nose and vote for this, let's do it, because it is for the benefit of America.

REP. LEON PANETTA, Chairman, Budget Committee: Is it perfect? Far from it. Is it painful? With $1/2 trillion in deficit reduction, how could it not be. Is it the package that I or any of you would have designed, or for that matter the President? Absolutely not. Of course not. It's a compromise, and a compromise by its very nature means that everybody has to give something for the greater good.

MR. MUDD: Some Democrats, especially those who were chairman of committees and subcomittees, asked the House to trust them to fix the agreement.

REP. SAM GIBBONS, [D] Florida: Medicare, give us a chance, we will fix it. The burden distribution, give us a chance, we will fix it. The tax expenditures, give us a chance, we will fix it. But don't vote no and bring down this government in disgrace and disaster. Give us a chance to work. We owe that to ourselves and to all the American people.

MR. MUDD: And a few Republicans argued in favor of the agreement in the name of George Bush not only at home, but also in the Persian Gulf.

REP. THOMAS COLEMAN, [R] Missouri: If the resolution goes down on the budget, it is, indeed, a vote of no confidence in this President. How will that be interpreted throughout the world? Not just on this particular economic issue, but whether or not the President can follow through on anything he might agree to on a summit, whether or not the Arab nations think that they can be held together in this fragile compromise that they have now with the President leading the effort. This is a time of national crisis. Why would we force on the President a vote of no confidence?

SPOKESMAN: And I have heard many of you say that it will be painful for you to vote for this bill. How painful was it for President Bush to accept the fact that there would be substantial new taxes, and how painful of him to have to come to ask each and every one of us personally if we could come to give us his vote, he who has worked so hard and suffered so much for us?

MR. MUDD: Finally around midnight, the indefatigable House Republican leader Bob Michel of Illinois who standing with his people was also on the line rose to speak. The House gave him the first of two standing ovations.

REP. BOB. MICHEL, Minority Leader: Difficult decision. But I wish you'd give a little bit consideration to the trauma your negotiators had to go through over all this period of time. Give us some credit for having some sense in what you can do in a very practical way with the mathematics that we've got to contend with, the divided government, and all the rest. I hope you'll give us an affirmative vote on this one. It's not the last day because you've still got an opportunity at reconciliation to do what you'd like to do. I'd appreciate it if you could vote for it, help us out on this one.

MR. MUDD: It was an exhausted and emotionally depleted House that watched the final speaker, Tom Foley, go to the well just before 1 AM.

REP. THOMAS FOLEY, Speaker of the House: And although the hour is late and although the debate has been long, and although the passions have been real, and although the divisions are sincere, we have an opportunity to stand together in at least the decision to go forward, at least the decision to give an opportunity for a decision, at least a chance to make this process work for ourselves, for the President, for the parties, and for the American people. And we must ask ourselves this question, if not now when, if not us who? [Applause]

MR. MUDD: At 1 AM, the talking was over and the voting began by electronic device, as they refer to it. Many Democrats were wary and did not want to vote for the agreement unless and until a majority of Republicans had done so. During the first few minutes of the vote, the agreement had an easy lead. But with 10 minutes to go, more Republicans were voting no than were voting aye, and with just under 90 seconds to go, a majority of Republicans hadgone against the agreement. The fight was over. In the remaining seconds, 39 Democrats rushed in with their votes, 31 of them against the agreement.

SPOKESMAN: The ayes are 179, the nays are 254. The conference report is rejected.

MR. MUDD: On the final vote, only 40 percent of the Republicans and 42 percent of the Democrats supported the budget agreement. For the record, Carl Pursell, the Michigan Republican we watched the other night agonizing over the issue on his way down to the White House, voted against the agreement last night.

MR. MacNeil: Two others who voted against the agreement last night are Democrat Robert Obey on the House Appropriations Committee and Republican Dick Armey on the House Budget Committee. They are both authors of two different and alternate budget proposals. On the Pro budget side are two members of the House Budget Committee. Leon Panetta is Chairman of the House Budget Committee and Bill Frenzel is the ranking Republican. Mr. Panetta first of all what is going to happen. It appears that you can not forge a new budget deal before midnight when the current authority runs out. The White House says that it won't sign a continuing resolution. What is going to happen this weekend?

REP. PANETTA: I think that we have an obligation to move forward to see if we can't put together the forces we need to pass a budget resolution and put the budget back on track. I don't think that we can walk away from that challenge particularly since we enter this period of dequestration, the possibility of the Government shutting down. I think that we just have to role up our sleeves and get back to work to see if we can put the votes together to put the budget resolution through. It is not going to be easy. It is obviously very difficult.

MR. MacNeil: And it is not going to happen by midnight tonight?

REP. PANETTA: It certainly is not going to happen by midnight tonight but I think that perhaps some time over the weekend if we can get these forces together we can try to get a budget resolution through before the sequester really hits.

MR. MacNeil: Mr. Frenzel, Congressman Frenzel what do you think is going to happen? Do you think before the end, before midnight tonight the President will sign an emergency resolution.

REP. FRENZEL: Only the President knows that for sure but my judgement is that he will not sign it and we will work through the night here and probably through most of the weekend trying to put a more, acceptable budget resolution together. Like Congressman Panetta I am hopeful that we will be able to do it but like him I look upon it as a very difficult task.

MR. MacNeil: So the real effect of the technical shut down would not be felt until the Columbus Day Holiday is over when most Federal Workers would be going back to work on Tuesday. Is that what is in your mind?

REP. FRENZEL: That would be our hope but there will be effects felt. Whether they will be wide spread, whether they will be serious, whether they will be a big effect on people's lives I am not certain at this time.

MR. MacNeil: Congressman Armey as a Republican some are calling what the President is doing a game of chicken and some conservative Republicans are saying that the President should shut the Government down and keep it shut down until the Democrats agree to more budget cuts. What do you think about that?

REP. ARMEY: Well I don't know. It is very hard to tell what is the best. My thinking is that we ought to take ten days or so of a continuing resolution at freeze levels, allow the members of Congress to spend the weekend to get some relaxation and perhaps cool tempers a little bit and then come to terms with the fact that Summit package, even though it was the best they say they can do is not acceptable to the majority of the members. Look at other packages, bring more people involved in the process. Keep it in the Congress where it belongs and work it out. We have ten days to do that in if the President would accept a continuing resolution at zero increase in outlay levels. I think that we can do that. The Summiteers would have to concede their priveldged position and accept more involvement by a wider group of the members of Congress.

MR. MacNeil: Congressman Obey do you think the White House tactics are going to discipline you dissidents or you people who opposed the budget plan. Are they going to scare you by seeing the prospect of the Government shutting down in to changing your positions?

REP. OBEY: Well I think that we regret very much the fact that it may happen but my view is if the President is angry with the Congress take it on Congress. If he wants to chew us out chew us out. But I don't think that he should chew innocent bystanders. It seems to me that sooner or later the President has to understand that a lot of members in the House last night felt that it was fundamentally unfair to push a package which would provide twice the hit in terms of percentage of lost income on some one who makes between 16 and 25 thousand dollars a year as it did for somebody who made 400 thousand dollars a year. It is fundamentally unfair and I think that is what most of the democrats were trying to say that this was a fundamental belief that Government should be based on fairness especially on the question of taxation.

MR. MacNeil: I'll come back to the substance of the budget in a moment. Just on the tactics for this evening and over the weekend. Congressman Frenzel is it likely that Republicans in the House go along with a continuing resolution tonight and accept if the Democratic Leadership offers one.

REP. FRENZEL: I think that we have to know how the negotiations on the budget resolution are proceeding and I think that we also have to know what the continuing resolution looks like. My inclination is not to vote for a continuing resolution but there are too many external factors to be able to say what I am going to do at this minute or what the Republicans are going to do.

MR. MacNeil: Congressman Panetta as a Democratic Committee Chairman do you expect there to be enough votes to pass a continuing resolution tonight?

REP. PANETTA: I think there will be because I think there is real concern about the impact of suddenly shutting the government down and the impact that it is going to have on people, the impact that it is going to have on this country. We are in a situation where our economy is on the brink right now. You just saw the unemployment figures that came out. You are seeing inflation going up. We are seeing the impact of the oil shock. We are seeing the possibility of a recession. I don't think that we ought to play games here with shutting the Government down and causing an even greater stress on our economy at the present time.

MR. MacNeil: Congressman Armey as a Republican who voted against this resolution, many people are astonished and surprised that so many Republicans would vote against the most popular Republican President since that began keeping these kind of polls and you heard one of your colleagues say in the debate we just seen it is a vote of confidence and how the world will see it. Would you explain why you felt that you should do that?

REP. ARMEY: Well, of course, every member of the Republican conference that voted against it had his own analysis of the budget. I should say first nobody should have been surprised. In July we passed a resolution in the Republican Conference whereby 2/3 to 3/4 of the members said they would vote against a budget package with these kinds of taxes in it. Therefore no one should have been surprised at the vote. My own personal reaction was to the extent that I got the information by which I could make an evaluation of the real economic impact of this package on own real economy and subsequently its ability to fulfill its billed potential deficit reduction. The package failed. It simply in my estimation would not do what they said it would do for deficit reduction but instead do a great deal of harm to the economy. Therefore I voted against it and I encouraged others to do the same.

MR. MacNeil: Where did the President's prestige and influence come in as a factor to you as a rank and file Republican?

REP. ARMEY: Again every member of the Republican Party has to answer that for himself. I was elected by the people in my District to vote on the merits of every issue before me with the respect to its impact on their lives and the lives of their children. Not concern myself to the extent that the President's prestige is increased or decreased by my vote.

MR. MacNeil: Congressman Obey the reasons you have a moment ago about the substance of the budget and why you were against it. What about as a Democrat rejecting the argument of your own Leadership that this would plunge the country in to chaos. How did you feel about those dire warnings?

REP. OBEY: I think that we have tremendous leadership in the House of Representatives and I obviously do not want to see chaos. But the fact is that the President set this up because he backed us in to a deadline at one minute to midnight almost. He thought given the pressure of that deadline we would ignore substance, ignore concepts of fairness and instead just buy anything that was sent us. And I don't think that is what we are supposed to do. No Congress since 1946 has changed any President's budget by more than 2 percent and it seems to me that Presidents are Presidents and not kings and we should look at the substance not just the politics.

MR. MacNeil: How easy, Congressman Panetta, is it going to be to put together a substitute for the deal that was rejected. Is it going to involve Committees like yours in long hearings and lots of lobbying by all the interest groups and everything?

REP. PANETTA: No not at all. I think that you are basically looking at an in house process where there is going to have to be a lot of one to one discussion to members about their concerns in the package to try to determine what needs to be adjusted in this package and try to see if we can get their vote for the budget resolution.

MR. MacNeil: So it is really going to be taking this package and see how you can improve it enough to get a majority. Is that it?

REP. PANETTA: That is the basic effort right now is to see if we can get enough votes to see if we can get a budget resolution adopted. The problem is that if we don't get a resolution adopted we can not even take the next step which is to try and implement what is called a reconciliation bill which is the implementation of the budget. That is where the changes in law are valid and that is where the battles are going to go on in Committee. We haven't even gotten to that stage because we haven't put a budget resolution in place. That is our first order of business.

MR. MacNeil: Congressman Frenzel is that how you see the tax ahead that it is going to be taking this deal and see how it can be approved?

REP. FRENZEL: That is the easiest way to begin. A lot of work has gone in to this but we can not simply tinker around the margins. We have to make, I hope, understandable but some fairly basic changes in it to attract enough votes to make it a majority. That is the quickest way we can get the job done.

MR. MacNeil: Congressman Armey are the Republicans who think like you ever going to vote for a budget deal that includes the tax increases or something like the tax increases and no capital gains tax reduction?

REP. ARMEY: Obviously if they think like I do no. I would not vote for any package that included repressive taxes and excluded those kind of tax changes that could encourage growth in the economy. We tried to tell this as clearly as we could and as often as possible. The fact of the matter is that the major encouragement to maintaining the size of the deficit to no greater increases than we have given the wild spending patterns of Congress has been the growth of the private sector of the economy that has held up the Government's budget to some kind of pace with the spending. Now if we put in repressive taxes and give nothing to the concessions of the taxes that encourage and sustain that growth we destroy the only thing that has maintained the budget deficit with in anything near a manageable proportion.

MR. MacNeil: Congressman Obey are Democrats who think like you ever going to vote for a deal, an amended deal, which puts principle part of the burden on middle and lower income tax payer and social security and medicare recipients?

REP. OBEY: Our goal is not to bring down the deal, Our goal is to change it make it fair to the middle class. The middle class bears most of the burdens in this country already for paying for programs and services. We are perfectly willing to vote for increased taxes on all Americans. I think that one of the rules of the next budget ought to be that whatever taxes come out of the final agreement there should be no tax reduction for any income group. I say that because if you don't have those rules in you run a great risk of greatly reducing the tax burden of very high income people. People with income upwards to $700,000. If you were to trade capital gains for instance for the removal of the notorious bubble. My understanding that for people at the million dollar level you would actually reduce their effective tax rates by about 3 to 4 percent. That is not what I call essential action to reduce the deficit. Those people should be paying more. We wanted to support the package. We wanted the burden to be distributed relatively fairly between the middle class, the poor and high come groups and I think that every American has the right to expect that of us.

MR. MacNeil: Congressman Panetta what do you feel about the argument that one of the speakers made on the floor. We heard it. That by voting this down there is a danger of bringing down the Government in disgrace and disaster. Discuss what happen last night in terms, as Mr. Foley's terms does this process actually work any more?

REP. PANETTA: Well there is a real crisis in confidence obviously with the Congress and our ability to try and run the Government and we try to fulfill the budget process and we try to make it work. I think that if there is anything that people are distrustful of now it is our ability to do our job to get things done and we failed topass a budget resolution, one that was worked on by the President and the Leadership of the Congress when we failed to move this process forward, when we shut down the government, when we have sequestration and these cuts across the board taking place. It only confirms people's suspicions that we can not do the job.

REP. OBEY: Congressman Obey can I make a point?

MR. MacNeil: Yes.

REP. OBEY: I would like to say this. We have to remember that this is not only a COngressional budget crisis. The President starts the budget process. The President has 90 percent of the resources of the Federal government to put together a budget and the President starts with a budget that is based in fundamentally unsound assumptions. When everyone knows that it will not achieve the deficit reduction that it is supposed to achieve. When everyone knows that the hard decisions have been delayed in that. Then I think that it is expecting too much for the Congress in the teeth of that walk away from it all in the walk away kind of budget for Congress to be able to put the process back together. For the Congressional budget process to work the President has to be involved from the beginning with real budgets, real numbers, real deficit reduction. The reason we have been such a delay on this score is because the President for over a year hid his actual budget decisions. He had the little black box in his first budget that hid the unspecified cuts and if you don't have Presidential leadership, if you don't have the President defining what he thinks the country should do in specific terms you can not expect the Congress to do that on its own.

MR. MacNeil: Congressman Frenzel let me ask you this. We just have 30 seconds left here. Can this divided Government work after what we have seen last night or is it going to take real economic catastrophe to freighted everybody in to some kind of agreement.

REP. FRENZEL: We saw the difficultly of a divided government working at the Summit. We also saw the difficulty of inter jurisdictional squabbles at the Summit. It has given us stalemate and grid lock and until the Congress solves those two problems we are going to have to have some kind of cliff to fall off before we will get stirred to do some real work. Otherwise we can never come to a conclusion and we can argue for years and years?

MR. MacNeil: Well Congressmen Frenzel, Panetta, Armey and Obey we thank the four of your for joining us. Roger.

MR. MUDD: Still ahead the political analysis of Gergen and Shields and a Charlayne Hunter-Gault conversation with an Army Captain in Saudi Arabia. FOCUS - GERGEN & SHIELDS

MR. MUDD: Next tonight we turn to the politics of the budget disagreement with our regular Friday night analysis team of Gergen & Shields. David Gergen is an editor at large for U.S. News & World Report, and Mark Shields is a syndicated columnist for the Washington Post. Well, we all know, or do we know that nothing can happen by midnight?

DAVID GERGEN, U.S. News & World Report: Well, the Congress can pass a continuing resolution, but I think, Roger, as revolving as this mess is, I think there's some grounds for believing the government is not in a total disarray, that something's going to happen. I think we're going to see a temporary shutting down of the government, but the President will continue emergency services, planes will be flying next week, meat inspections will continue and that sort of thing. Secondly, and perhaps more importantly on the substance of this, while this package went down, I'm reasonably optimistic that another package could be cobbled together in the very near future that will win the approval of the House and that will go through.

MR. MUDD: You mean not just a continuing resolution but the new budget agreement?

MR. GERGEN: I think that a new budget agreement is in the offing. There is going to be a lot of work this evening. Clearly, there was a decisive defeat last night for that agreement, but there is, I think there are a lot of serious people both on Capitol Hill and in the executive branch who are working very hard right now to put something together that would enlarge the coalition they have to get enough votes to win.

MR. MUDD: Do you believe that, Mark?

MARK SHIELDS, Washington Post: I'm not as optimistic as David. I'm really not. I don't think that -- I think that it was a stinging, devastating defeat last night, but I think it was a reflection that the American people got the government we voted for. We've consistently voted for Republican Presidents who've promised an anti-government essential message of cutting government, limiting government and no taxes. And at the same time, we've continued to vote for Democratic majorities in the Congress that have promised that we will preserve and protect you, first of all those programs, Social Security, Medicare, that are popular, and we will make sure that widows and orphans are not hurt by those anti-government tax cutters in Washington, and I think the gridlock stalemate, the inevitable collision occurred last night.

MR. MUDD: So all the Congress is asking for, it appears, is just one more week. So what's the point of refusing to give the Congress one more week?

MR. GERGEN: You mean why isn't the President going to sign the continuing resolution to keep the government in operation?

MR. MUDD: Yes.

MR. GERGEN: Because he thinks it will, in fact, keep the pressure on the Congress for a few more days.

MR. MUDD: Well, Obey said it won't.

MR. GERGEN: Well, I think there is some feeling here -- if the government is shut down, there is a greater sense of emergency, as we all know. There's a greater sense that the eyes of the world, the eyes of the nation are focused on Washington, we have to get our act together. Now, Roger, at this very hour, Republicans are talking on the House side. A lot of Republicans that voted against this package are talking about a new package that would raise the taxes on the wealthy by bursting the bubble, as it's called, in return for doing something on capital gains. This was the deal that was rejected, of course, during the budget negotiations, but there are a lot of Republicans that are saying they might be more willing to vote for that now. There were Republicans who voted against this last night because they agreed with the Democrats on the fairness point. They agreed that this was unfair and they are willing to take the hit now, some of them, not all of them, not the conservatives, but the moderate Republicans are getting us to talk that way. If there were enthusiasm on their part, I think the White House might go along with it. On the Democratic side they're talking about changing the Medicare package and trying to make it less of a burden on the elderly. Now if you can put together those elements in a way which the White House can accept or there'd be something in it for the White House, I think you could get a majority in the House.

MR. MUDD: Is that the secret, burst the bubble?

MR. SHIELDS: Burst the bubble. I'd say welcome to those converts to the tax justice argument which is something new. It really is. It's an old Democratic refrain, but it's been absent from the dialogue of American politics as far as taxes are concerned for a long time. We were guaranteed a hit on middle income and working class families as soon as you eliminate the tax increase. The White House rejected any increase in income taxes. All right. The only tax that we have in the country that is based on the ability to pay is the income tax. Once you rely slowly upon excise taxes, sales taxes, or any of the sort, you're going to hit lower and middle income people harder than you're going to hit people earning over $200,000, so it's a little late in the conversion scheme to come now to the tax furnace. I think, however, David is absolutely right that it's now in play in American politics, justice as far as distribution of burden is concerned. There really hasn't been. We've been talking for 10 years in this country about tax cuts. I think the other thing that hasn't been touched on and is all of a sudden brand new is that for 10 years the deficit has been something that isn't going away. Deficit really isn't a problem. We've been assured that it's painless, ouchless prosperity. George Bush wasn't able to turn it around in a five minute speech to the nation. He wasn't able to go to the nation and say, hey, that deficit that really isn't a problem, it's a serious problem, it's a cancer, it's termites in the woodwork, and you know, that message has not gotten across.

MR. GERGEN: I agree with that. I think the politicians in Washington were trying to make a U-turn in the deficit and they went off the track in their U-turn, they just sort of skidded off the road. Now they're trying to get back on the road.

MR. MUDD: Now you mentioned the President's speech, and I can't remember a Presidential speech which produced such an opposite reaction. Who's the fall guy for that speech?

MR. SHIELDS: Well, David -- it was Gergen's idea.

MR. MUDD: Gergen's idea, seconded by John Sununu?

MR. SHIELDS: Oh, absolutely.

MR. MUDD: Now who's going to take the blame for that?

MR. GERGEN: Well, the White House, of course, would like to put the blame on the Republican House members who came to them. But, on the other hand, the White House knew what it was going to do. Here's what happened, Roger. The President started sitting down with the Republican Congressmen. The Republican Congressmen said, Mr. President, we have a hard time voting for this as it is, if you can give us some political cover on this, we'll go for it. Could you make a speech? He agreed to make a speech that night. They went on the air that night with very little preparation. Frankly, they misjudged the country on it. I have never seen a Presidential speech or a President who went on an appeal for help and the next day the calls came flooding into Washington 20 to 30 against the President. That is unforgivable to put the President, from a staff point of view, put the President on the air for that reason.

MR. MUDD: Tell me about the future of John Sununu, I mean, not only his role in that speech, but his role as a budget negotiator.

MR. SHIELDS: I think John Sununu, I think does a very nice job of playing good cop/bad cop for George Bush. George Bush is somebody who gets along with House members, who likes them personally, wants to have them. I mean, he had 60 House members up in the private living quarters of the White House, all right, for coffee. Now that is unprecedented for a President. That's George Bush. Now the dark side of George Bush or kind of the enforcer side is John Sununu. John Sununu goes in and the good cop says, hey, I love you, I want you to be with me. The bad cop goes in and John Sununu says, hey, if you're not with me, you're going to pay for it. And I think that's a role too. There are a lot of people on the Hill who are upset with Sununu. There are people in the deliberations who were very upset with Sununu, thought that he was insensitive, hard, unyielding, arrogant, condescending, patronizing, adjectives that have been frequently associated with John Sununu, but I don't get a sense that George Bush is -- one other quick thing and that is that George Bush was in an awful position when he went on the air Tuesday night, and that is that George Bush basically didn't have anybody to blame. All right. Ronald Reagan could blame Jimmy Carter. Jimmy Carter could blame Nixon and Ford. Nixon could blame Johnson. There was always a President succeeding somebody from the other party. He couldn't blame the Gipper.

MR. GERGEN: One of the things about it, Roger, is our politicians have been pandering to the public so long, they've been giving speeches about pleasure for so long that when you go out and give a speech about pain and ask people to write in and say I'm in favor of pain, it's hard to do.

MR. MUDD: It always has been.

MR. GERGEN: It always has been. That's why they don't like to do it. That's why they always duck it. Coming back to Sununu, there are a fair number of Republicans, particularly conservative Republicans, who are very angry at Sununu tonight. There is, one Republican who told me this is like '64 between Nelson Rockefeller and Barry Goldwater, there is that much anger and bitterness that's still there. I think it will calm down. But they feel that Sununu tried to stiff 'em in a very, very unfair way. For instance, he went out and nailed in public Trent Lott from Mississippi, the Senator, called him very insignificant. Trent Lott on two or three occasions has provided a key vote to President Bush to uphold a veto on Tiananmen Square, for instance, and to go after him in the eyes of many Republicans was unconscionable. So there is a lot of anger about this. It is true, as Mark says, Bob Haldeman once said every President needs an SOB, and Sununu is playing that role in this administration.

MR. MUDD: In a few minutes, what about the way the House of Representatives conducted itself last night, did it cover itself with glory or with shame, did were they all, did they scatter to 435 different ways?

MR. SHIELDS: Well, I thought what was missing in the whole debate really, and I watched the whole debate, was a sense of national community. I mean, David's right. For a long time we've had painless, ouchless, things are going to be terrific, sort of, I'm trying to get the best description for it. It's sort of the hot fudge sundae diet. Eat a hot fudge sundae and you'll have an 18 inch waist in three weeks and lose 18 pounds. And that's the kind of pitch we've had and last night, everybody had a personal bitch and a gripe against the package but nobody or very few were addressing the sense of we're all in this together, it is a national problem, and no, I don't think the House covered itself with glory.

MR. GERGEN: I disagree. I think the House voted down this package, it was a bad package, an unfair package. They were right to stand up. I think we've got a chance to get a better package now.

MR. MUDD: Thank you. David Gergen of U.S. News, Mark Shields of the Washington Post. Robin. SERIES - TOUR OF DUTY

MR. MacNeil: We conclude with another of Charlayne Hunter- Gault's conversations with U.S. military personnel in SaudiArabia. Tonight she speaks with an Army captain.

MS. HUNTER-GAULT: This is Alpha Company, the 24th support battalion of the First Army Brigade, a unit that handles everything from food to fuel to ammunition. And this is its commander, Captain Cynthia Mosley. When we visited this outpost deep in the Saudi Arabian Desert, Captain Mosley explained that she is in command of some 100 soldiers who are the final point in the supply chain to troops at the front. She was deployed from Ft. Stewart, Georgia.

CAPT. MOSLEY: In the desert we really have to do the PMCS equipment like we never had to do before.

MS. HUNTER-GAULT: What is that, the PMCS?

CAPT. MOSLEY: It's preventive maintenance checks & services and that's just checking the vehicle out before it moves, when it's moving, during operation, and even after. And we normally say yes, we'll do it in garrison, sure. But here it's a must, it becomes a command issue really quick, because if a vehicle stops on you here, then you know it really affects the effectiveness of, you know, you doing your mission. So when someone says, well, hey, I'm low in oil, I'm low in transmission fluid, they really need it, because stopping out here, they have to wait a long time and --

MS. HUNTER-GAULT: Because there aren't any filling stations.

CAPT. MOSLEY: You're right.

MS. HUNTER-GAULT: A native of Mobile, Alabama, Capt. Mosley has been in the Army six and a half years. When you joined the military, did you ever think that you would be in a situation that could possibly lead to war?

CAPT. MOSLEY: No, I did not, but I think especially when you're taking the oath that that does come to mind, that yes, in fact, you may one day be called on to give up your life for your country, and I think that when you hear the national anthem that that comes to mind and when you review the oath, that comes to mind, so, no, I didn't expect it, but it was always there.

MS. HUNTER-GAULT: I look around and I see that most of the soldiers in your command weren't even born or were just being born during the Vietnam War. Does any of that whole Vietnam experience resonate anywhere in any of you, or is this just another whole deal altogether?

CAPT. CYNTHIA MOSLEY: I think one of the things that the soldiers are concerned about they didn't have in Vietnam was that they didn't have the support of the country, the support of the citizens, the support of the U.S. citizens, and here, you know, we're definitely getting the support. You know, we get little cards and letters in the mail and it's addressed to any soldier in the U.S., and they're encouraging us and say, we're praying for you, and they give us little verses to read, and it's just so encouraging, and they're behind us and it's great, it's super, and it's something that they didn't have.

MS. HUNTER-GAULT: I know that everybody always asks you this question and I've been told that there have been a lot of media up there to see the woman commander.

CAPT. MOSLEY: Absolutely.

MS. HUNTER-GAULT: How do you feel about that? I mean, do you feel special as a woman commander in this Army?

CAPT. MOSLEY: Well, I think that now with the issue of women servicing in combat roles and women being forward or women being a part of the combat arms and all of this that because of this deployment it's an issue and maybe it will be settled here during this particular time, but I don't feel at all special. I'm just a person, just so happy to be a woman that's in command at this present time, but the media love it. I don't know why I'm being singled out.

MS. HUNTER-GAULT: Do you feel special?

CAPT. MOSLEY: Being a woman in Saudi Arabia or a woman in the heat, in this hot temperature?

MS. HUNTER-GAULT: How does it work here, I mean, with the culture and everything, with your own people in the command position?

CAPT. MOSLEY: Well, I think that pretty much they're used to it. The previous commander was also a woman for my particular soldiers, but for others, you know, they always look, even in the army, have a tendency to stare, but I think they're slowly getting used to the idea.

MS. HUNTER-GAULT: Is the Army used to it yet?

CAPT. MOSLEY: Absolutely, they're not, even the combat arms, men are not used to working with women. They find it very difficult when they're taking on their normal routine to have to deal with a woman, especially one that has to give them instructions, so even in the military, even in the Army, they find it, if they're in the combat arms, they're not used to working with women, they have all men, so even when my customers pull up and they find that, well, you have a female commander, what's she like, so they're even curious, even in the Army.

MS. HUNTER-GAULT: How do you after all this time here, I think a lot of people thought you would come and leave not long after that, how do you think this is wearing on the people who work with you, your troops, and how do you think they'll deal with this if it's a long-term thing?

CAPT. MOSLEY: I find that what I have to do as a commander is realize that a lot of them are without their families so we have to do special things.

MS. HUNTER-GAULT: Like?

CAPT. MOSLEY: Like we'll get 'em together on a typical evening and when one of the soldiers receives a tape from home, it's like family hour, so he plays the tape for all of us and we all listen to his kids screaming or laughing, and I encourage them to talk about their children and really talk openly about really how they're feeling. They miss them a great deal but they realize at the same time they have a job to do. I think when they call, I hear from them saying that everything's okay, and that helps them. And they can go another month or two and then they need that call. I think as commanders though, as leaders, we need to watch our soldiers carefully, and we need to try to think of ingenious things to do every now and then to get them motivated, have nice dinners for them or whatever we can think of as a nice dinner, do some special things that we may not do in garrison or back home.

MS. HUNTER-GAULT: You mentioned a few moments ago, you know, that the Army was still having to adjust to having women in the military. What do you think would happen if a shooting war broke out, do you think that would still be a problem? Would it be more of a problem? Would it complicate things, or what do you think would happen?

CAPT. MOSLEY: Well, because I have not, you know, been placed in that particular position, and I don't know how I would react personally, but I feel that, especially with my particular company, the soldiers are generally used to having females around and they know that they can carry their own weight. They train with them, they do maintenance on equipment with them, they pump fuel. And they distribute rations and they drive cranes and fork lifts, so all the things that the men do in my unit, of course, the women do.

MS. HUNTER-GAULT: Do you think the women could fight and would fight?

CAPT. MOSLEY: Oh absolutely.

MS. HUNTER-GAULT: Would they want to?

CAPT. MOSLEY: I think, umw, that they know that, you know, it's what they're here for, they've been trained for, and I think they will. I don't think they will have much problems with it at all. Though everyone has a problem, of course, with killing another human being, but I think in the matter of self defense, yes, they'll fight.

MS. HUNTER-GAULT: Gen. Colin Powell has been in the area at some point and talked to the troops about their concern and things. If you had an opportunity to say to him today something, either something that you would want or some message that you would want to convey to him, what would it be?

CAPT. MOSLEY: I would let him know that I'm extremely proud of him. I would love to see him in my area. I would love to see him forward in just a supply company or just a supply battalion, because everybody wants to see the M-1, everybody wants to see the Bradley, but what's behind the Bradley, what's behind the M-1, what's behind all these tanks and systems? They yet need fuel and we're going to need some food for the team, and yet need ammunition, you can't do much for them, so we are generally left out, they want to see all the great nice things, but what's behind those things? It's almost like the mind that's really behind the President. What's behind those things or systems that keep him going, so we were generally left out.

MS. HUNTER-GAULT: You want to see him, in other words?

CAPT. MOSLEY: We want to see him. We want to see the President. We want to see him. And we want to let him know that we're behind these things and we're supporting our soldiers forward and they ought to go in the front lines and say hi to the soldiers, and when they're drinking that water, that's the water that I've supplied them with. And I feel good about that. When they're the Bradleys, when they're looking at the Bradleys or the M-1s, the fuel that's in 'em, I've supplied them with that, so when they're eating that MRE, I've supplied them with that. So I just want to see them, and I'd tell them that I'm extremely proud of them. And the only other issue I would bring up to them that I know my soldiers would want would be the simple fact that they definitely don't want their separate rats to be taken away from them.

MS. HUNTER-GAULT: The separate rations issue, why is that so important? What is it and why is it so important?

CAPT. MOSLEY: Well, it's given to soldiers that have families that are not living on post, they're living off post or off the base and it's just additional money that they're given to buy food off post or buy food at the commissary. And the money is important, because it's there for the soldier but once the soldier deploys, the family loses that money and the soldier has, let's say a typical soldier with three or four children who's on separate rations, now they're back at home and he's here in Saudi Arabia, and they're not getting that $110, 200 or how many X dollars he normally gets, and that's based on his family, they're not getting that money, so of course, it's affecting what they normally get so it's affecting the soldiers and their morale. And it's not just for that soldier. It's for the children. It's for the family as well.

MS. HUNTER-GAULT: And you said you were told that the bill was - -

CAPT. MOSLEY: Right. The soldiers are reading where in the newspaper, where the king here, King Fahd was paying for the fuel that we're using, the food, and he's giving us the water, and a lot of stuff that we're getting here, and they were saying, now, if he's paying for all of that, then why is it that they want to take my separate rations away from me, if the government is not paying for the food, and he's, you know, actually paying for the food, then why is it that they have to take my separate rations away, so that's a main issue, and that's a question that has often come up.

MS. HUNTER-GAULT: That and R&R?

CAPT. MOSLEY: That and rest and relaxation, and especially if we're going to be here during Thanksgiving and Christmas and maybe get a trip to Gardens or Burgess Gardens in West Germany or anywhere away from this desert.

MS. HUNTER-GAULT: Okay. Capt. Cynthia Mosley, thank you for being with us.

CAPT. MOSLEY: You're quite welcome. RECAP

MR. MUDD: Once again, the major story of this Friday was the fight over the federal budget. Congress moved to avert a shutdown of government spending threatened for midnight. The shutdown became more likely after the House rejected the budget agreement endorsed by President Bush and by most congressional leaders. The President has said he would let the government close down tonight if Congress does not approve a budget deal. Both the Senate and the House are expected to consider a new budget plan over the weekend. Good night, Robin.

MR. MacNeil: Good night, Roger. That's the Newshour tonight. We'll be back on Monday night with the latest on the budget crisis and another in a series of conversations with men and women in Operation Desert Shield. I'm Robert MacNeil. Good night.