The NewsHour with Jim Lehrer

GWEN IFILL: Good evening. I'm Gwen Ifill. Jim Lehrer is off this week. On the NewsHour tonight, Kwame Holman and Ray Suarez look at the arguments for and against more trade with China; Susan Dentzer reports on an Indiana health insurance program for kids; South African President Thabo Mbeki discusses the AIDS epidemic, among other things; and a Massachusetts school teacher recites her favorite poem. It all follows our summary of the news this Tuesday.

NEWS SUMMARY

GWEN IFILL: The China trade fight went down to the wire today in the House of Representatives, both sides lobbying the undecided. The vote is set for tomorrow, and it's expected to be very close. At issue: Whether to extend permanent normal trading benefits to China. We'll have more on this story right after the News Summary. Israel stepped up its troop withdrawal from South Lebanon today. As it did, fighting erupted along the border, and pro- Israeli militiamen sought asylum in Israel. We have this report from John Irvine of Independent Television News.

JOHN IRVINE: Tonight, thousands of Lebanese are fleeing their country. The Israelis are taking them in. These people, soldiers from the South Lebanese Army and their families, were allies of the Israelis during the 18-year occupation. They do not want to stay in Lebanon at the mercy of Hezbollah. The Islamic fundamentalists and their supporters continue to surge forward.

CROWD: Hezbollah! Hezbollah!

JOHN IRVINE: These were some of the celebrations today as civilians reclaimed the villages lost to them since 1982, but armed Hezbollah units are here as well, and for the Israelis, they are uncomfortably close. From the ground and from the air, the Israelis have been attacking guerrilla positions. We saw a moving car being hit by a single tank shell. We saw no one get out. The Israelis have also fired on positions that they abandoned. They do not want Hezbollah getting their hands on weapons and equipment left behind. Israeli soldiers we filmed leaving Southern Lebanon were clearly delighted to be doing so. The occupation has cost 1,200 lives. But two miles away, inside Israel, the residents of this town were once again ordered into their bomb shelters. This is now the front line, and these people are vulnerable to attack from their new neighbors, Hezbollah.

GWEN IFILL: In New York, the U.N. Security Council endorsed a plan to monitor Israel's withdrawal. It called for increasing the U.N. peacekeeping force in Lebanon, and helping the Lebanese government regain authority in the region. George W. Bush today outlined some of his national security goals. The Republican presidential candidate said he'd reduce the U.S. nuclear arsenal to its lowest possible number, without compromising security. He spoke in Washington, accompanied by retired General Colin Powell and former Secretaries of State Schultz and Kissinger.

GOV. GEORGE W. BUSH: We should not keep weapons that are military planners do not need. These unneeded weapons are the expensive relics of dead conflicts. And they do nothing to make us more secure. In addition, the United States should remove as many weapons as possible from high alert, hair-trigger status -- another unnecessary vestige of Cold War confrontation.

GWEN IFILL: Bush also reiterated his support for a national missile defense system. On Wall Street today, interest rate worries sent stock prices tumbling late in the day. The NASDAQ Index fell 199 points, or nearly 6% to close at 3164. That was a new low for the year. The Dow Jones Industrial Average dropped 120 points to finish at 10,422. That's it for the news summary tonight. Now it's on to trading with China, insuring kids, South Africa's president, and another favorite poem.

FOCUS - CHINA TRADE DEBATE

GWEN IFILL: Kwame Holman begins the China trade story.

KWAME HOLMAN: A day before the House is scheduled to decide whether to extend permanent normal trade status to China, neither side in the debate could say for sure which way the vote would go. An overwhelming majority of Republicans say they favor normalizing trade with China while just as many Democrats say they're opposed. The latest associated press survey of House members showed 194 would vote, or were likely to vote, for normal trade with China. 169 said they would vote no, or were leaning that way. That leaves about 72 members undecided or unannounced. If all 435 House members vote tomorrow, a simple majority-- 218-- would be needed to approve or defeat the measure.

SPOKESMAN: The Rules Committee will come to order.

KWAME HOLMAN: This morning the House Rules Committee met to decide the length of debate on the trade bill and whether any amendments would be allowed. The hearing also served to preview the positions the opposing sides will argue. Committee Chairman David Dreier said he believed the significance of this bill was unmatched.

REP. DAVID DREIER, Chairman, Rules Committee: May, in fact, be the most important vote cast in the 213 year history of the United States of America.

KWAME HOLMAN: Ohio Democrat Tony Hall, however, said he was troubled by the momentum the bill appeared to be gaining.

REP. TONY HALL, (D) Ohio: This makes it look like we're kind of rolling over for the sake of trade, for the sake of business. And the fact is -- is that every agreement we've made with the Chinese, they've broken.

KWAME HOLMAN: Massachusetts Democrat Joe Moakley got into a frank discussion about the potential effects of the bill with Illinois Republican Phil Crane, who was seated with his back to the camera.

REP. JOE MOAKLEY, (D) Massachusetts: I agree with you that by should trade with China. It's a potential gold mine, and I vote every year for trade with China. But I think that we shouldn't do it every year. I think if we give it permanent status, then we're not going to have any leverage when we talk about human rights abuses.

REP. PHIL CRANE, (R) Illinois: This is a vote that is required if we are going to enjoy all of the WTO trade advantages with a new member of WTO, namely the People's Republic of China. And if we do not approve this, and we go back to simply renewing our annual trade relations, normal trade relations with China, they continue to access our market, but we are locked out of theirs, as we are at the present time.

REP. JOE MOAKLEY: Yeah. We'll argue on the floor.

REP. PHIL CRANE: Okay. But please, we need... Joe, we need your support. We desperately need your support.

KWAME HOLMAN: Late this afternoon, the China trade bill was brought to the House floor and the first of what's expected to be several hours of debate got underway.

REP. NANCY PELOSI, (D) California: We have been told over the last decade that human rights in China would improve if we had unconditional trade benefits for China. Not so. More people are in prison for their beliefs in China today than at any time since the Cultural Revolution.

REP. SANDER LEVIN, (D) Michigan: We must be activists in this process of change. We, the United States, cannot isolate China and its one billion, 200 million people. And we must not isolate ourselves from impacting our China's future direction.

KWAME HOLMAN: A final vote on the China trade bill is expected late tomorrow afternoon.

GWEN IFILL: Ray Suarez samples opinions outside congress.

RAY SUAREZ: And for that, I'm joined by Richard Trumka, secretary- treasurer of the AFL-CIO; Harry Wu, a human rights activist imprisoned in China for two decades before being released in 1979 -- he is a research fellow at the Hoover Institution. Christopher Padilla, director of international trade relations at the Eastman Kodak Company. And Xiao Bo Lu, Assistant Professor of Political Science at Columbia University -- he was born in China and lived there for 25 years before coming to the United States.

Christopher Padilla, we just heard how many people are avidly awaiting this vote. What's at stake for Eastman Kodak? Why are you hoping for a yes vote for PMTR?

CHRISTOPHER PADILLA, Eastman Kodak Company: Well, Ray, China is the second largest market in the world for photographic products after the United States. That's up from just five years ago. The Chinese have agreed to enter the World Trade Organization and make some unprecedented new reforms in their economy to open their market, throw open the doors of their market in ways that have never been done before. They will open Internet services. They will open distribution services. They will open to U.S. products and farm goods in ways they never have. Chinese goods already have access to the U.S. market and have for 20 years. The vote tomorrow is not about whether China's goods will be allowed in the U.S. They already are and still will be nomatter what Congress does tomorrow. The vote tomorrow is about one thing only: Whether or not American companies and made-in-the-U.S.A. products will have access to the Chinese market. The other guy is opening their market in this trade agreement. It's a one-way deal, all in our favor. And we need to take advantage of it by approving PMTR.

RAY SUAREZ: Harry Wu, what's at stake for the people you're worried about, the workers in China?

HARRY WU, Human Rights Activist: Let me respond to the gentleman from Eastman Kodak. I think that Eastman Kodak business in China is an immoral whiz because they don't treat the Chinese workers as the American workers in America. The Eastman Kodak business in China, their business partner is the Chinese government. So economically, not only, you know, the benefit go to the American business and also benefits some Chinese workers, but major beneficiaries in this trade is Chinese government, Chinese Communist government. Secondly, thinking of a moral, moral standard, Americans is all the time thinking about the moral, ethic standard. I don't think they apply the same standards to Chinese workers. And the last question is security. We have to know China is a Communist regime. For example, last August I was Far East of Russia, Vladivostok. I saw, you know, Vladivostok is the headquarters of the Pacific fleet of Russia. I saw the submarine and battleships lined up in the port because they don't have money to operate. They got a purchase order from China, and they did. Last February there was a missile destroyer. You know, this destroyer was designed by the Soviet Union to attack...

RAY SUAREZ: You're taking this a little far afield. Xiao Bo Lu, how do you answer hard by Wu's concerns about the common rank and file Chinese citizens?

XIAO BO LU, Columbia University: Let me take up the labor rights issue. Are their labor rights abuses in China? You bet there are. Are they cases of labor law violations such as child labor, sweatshops and poor working conditions, you bet there are. But I think what this agreement, PNTR will do, is to enhance, improve the labor conditions in China, not to make them worse. As a matter of fact, in the last two decades, the Chinese government has done much to improve the labor conditions of China. For example, in the last decade also, China has passed a series of labor legislation, including the 1995 labor law, laws on minimum wage. Incidentally, all major cities now in China have minimum wage regulations, including the city of Shanghai, the hometown of Mr. Wu. You know, I think the further... what PNTR and WTO. Membership is going to do is going to subject China to higher standards of labor practice according to the WTO rules.

RAY SUAREZ: Well, let me turn to Rich Trumka at that point. Doesn't that sounds good to you as a labor leader?

RICHARD TRUMKA, AFL-CIO: Well, first of all, let many go back and correct a lot of the miss information that's been perpetuated about this. We're against this agreement because, one, it's permanent. And we're rewarding China for the most outrageous conduct. They've closed markets, they've signed an agreement with us to open markets. And they've violated those agreements. Second of all, this is not about sending products to China. This is about sending manufacturing facilities to China. Now, the gentleman from Eastman Kodak told you that we have to do this, they're opening up their market so it's a one-way street. This is really good for us. Several years ago, China agreed with us. They signed an agreement that said they would open up their markets. They violated it. They signed another agreement with us saying they would give us most favored nation status, so if they grant it to anybody in the world, they have to give it to us unless they violate their agreement. And let me quote from you. This is from Eastman Kodak, these are two quotes from Eastman Kodak. This will demonstrate what this is about. It's about sending manufacturing capacity to China, not products. Two quotes: In a market such as China, where the value of business is expected to grow rapidly, local manufacturing is simply a better business model. Quote, Eastman Kodak. Two, China's manufacturing operations reflect Beijing's determination to create professional enterprises which could displace U.S. imports and boost tax revenues.

RAY SUAREZ: Let me turn at that point to Christopher Padilla.

CHRISTOPHER PADILLA: First of all, let me reject categorically the charge Mr. Wu made that we're conducting amoral business in China or immoral. As a matter of fact, Kodak and other U.S. companies are a model for Chinese labor practices in China. For example, at our facility in Shaman, which is on the coast near Taiwan, we recently exceeded five million safe working hours in that facility, which is a record for any company in China. Not only, that we are not a partner with the Chinese government. We purchased from the Chinese government the assets of their state-owned photographic industry. And in doing so, we increased wages. We now pay between two to four times as much as workers could get in the Chinese government-owned factory. So we have worldwide environmental standards as well as worker standards that are the highest in the world, and that's why jobs in American companies in China are among the most sought after, because we pay well, and we treat people right. We're not rewarding China, as Mr. Trumka says.

RAY SUAREZ: But absent PNTR, without PNTR, you mentioned that China's become the second largest market for photographic materials for Eastman Kodak. What would permanent status do that this arrangement that you're already prospering under...

CHRISTOPHER PADILLA: That's a good question. Permanent status would ensure we continue to have a level playing field because China is going to throw open its market later this year when they enter the WTO, no matter what Congress does. The vote is only about whether American companies and made in the U.S.A. products will be able to benefit from this agreement we exported $175 million worth of products last year, made in U.S.A. products in China. That was up 75% from the year before. If we can't get access to the Chinese market on the same terms as our German and Japanese competitors, it hurts workers in the United States. And that's why...

RAY SUAREZ: Let me turn to Harry Wu, because you've mentioned you don't want us to lose... the United States to lose its leverage in these conversations. But the most favored nation status agreements that were reviewed yearly became... they were never rejected. China was never turned down for this status. They were eventually seen by their critics as a rubber stamp. What leverage do you lose if you go to PNT, Permanent trading status?

HARRY WU: Permanent means we don't have leverage. Let me respond to the Kodak representative, because he rejects so-called immoral. Two questions: Is Chinese workers in your company in China, in Shaman, if they want to go to organize a free union, these people go to jail. Do you... are you aware of that? Second, a woman working for Kodak in China, if they give birth without a government permit, theyare fired by the company. Are you aware of that? In China, the birth control policy is applied to every single woman, and according to Chinese policy, if they give birth without a permit from the government, the company will fire them. Is Eastman Kodak American boss aware of that?

RAY SUAREZ: Let me get a quick response to those two questions? Are you aware of either of those things?

CHRISTOPHER PADILLA: No. It's simply not true. I would challenge Mr. Wu to provide specific evidence. The fact of the matter is that American companies are leading by example in China, which is why so many Chinese would like to work at American companies, because we provide safe working conditions, and it's a fact of the matter that by engaging more with China, by trading more with China, we're helping to sew the seeds of political reform. That's why respected Chinese... respected opponents of the Chinese regime, like the Dalai Llama, like Martin Lee, the chairman of the Democracy Party in Hong Kong, like Renwan Bing, the man who spent 11 years in jail for his activities in the democracy movement in 1979 have all said the same thing, which is if you want the trade... If you want the change China, you should trade with China.

RICHARD TRUMKA: But we do trade with China. We trade with them every year. This isn't about trade with China. Under the current system, we trade with them. We have most favored nation status with them. And you have to agree...

CHRISTOPHER PADILLA: We don't have access to mare markets.

RICHARD TRUMKA: We do. If they don't, they've violated another trade agreement with us, because they said to us, "we'll give you most favored nation status. They've signed that agreement since 1979. Let me ask you this one other question. I think this is an important question. Now you say that doing this trade with them is going to change China. There's little Burma over here. Burma was a charter member of the WTO. Every year the State Department and the ILO accuses Burma of being... of crimes against humanity. They have executions. They torture people. And we haven't changed them, even though they've been in the WTO since they started, and do you know why is this because human rights and labor rights and environmental rights and religious rights are specifically excluded from the WTO. We can't enforce them. So when we sign this, and make it permanent, we will lose our section 301 rights to unilaterally sanction them, and that threat, even though it went used, kept them modestly in line.

RAY SUAREZ: Xiao Bo Lu?

XIAO BO LU: Yes. I think as a scholar, who has no ties with Kodak, I'd like to comment on the argument about how immoral Kodak Company has been doing in China. I think... I understand that Harry Wu has a lot of concerns for labor rights in China, and I just hope that he has done some research in China itself and to interview people and to find out the truth. I have done some research on the labor...on the labor rights in the foreign companies in China. And I find that the... as a matter of fact, the ford companies have the best labor practice, especially the large multinational companies from the United States in China. I can give you an example of collective bargaining. You know, 20 years ago, such a term never existed in Chinese vocabulary. You know, there's no... of course, there's no contract. There's no collective bargaining. And starting in 1994, the government actually started to pilot, experimenting collective bargaining in the foreign sector. And now, last year, the government started to implement it in all sectors. So the foreign sector, foreign investment sector provided models for labor... good labor practice, and a testing ground for more improvement of labor governments in China.

RAY SUAREZ: Then, Mr. Xiao, let me jump in there. Might it be that you're both right -- that those workers who are still in the old state industrial sector or down on the farm and waiting for the blast of American agricultural imports have more in common with American workers in marginal or outdated industries than they do with their own industrial leaders, just as in the United States there are winners and losers, as well? Are we making a mistake by looking at this as a Chinese-American binary, yes-no question, rather than there being winners and losers in both societies?

XIAO BO LU: You're absolutely right. I think any drastic structural change would create losers and winners. Indeed you're right to point out some workers in the state sector will lose out in this... as a result. And some farmers in China may suffer, too. But in the long run, as China's inefficient economy, inefficient state sector being restructured, and that would benefit workers, eventually create more jobs for the Chinese working population, which is, you know, it's 100 million large.

HARRY WU: Well, I don't have a crystal ball talking about the long-term future. But we have to come back to thinking about the present. What would happen right away we give the Chinese permanent NTR? Listen, just recently the Chinese government said, "well, we're going to have a war games against Taiwan." Why does a country have... Why does this regime have such a powerful weapons system? Why does this government today have such a, you know, big capacity to do all kinds of threats to the democracy of Taiwan? Where's the money from? The hard currency comes from where? It comes from our pocket. The Communist regime everywhere, in Moscow, in everywhere, in Havana, the lack of money. Why Beijing communist have such a big money to do everything they want?

RAY SUAREZ: Well, Mr. Padilla, can you look at this issue in just... As just an economic question and take away these threats of security and workers rights?

CHRISTOPHER PADILLA: No, I think it's an important foreign policy question. That's why this vote in Congress tomorrow is so important. I think that's why people like retired General Colin Powell and the newly elected president of Taiwan have come out in favor of this, because they recognize...

HARRY WU: That's not right.

CHRISTOPHER PADILLA: ... That increasing the engagement with China is the best way to moderate China's political behavior. If the Congress tomorrow votes against permanent normal trade relations, the people who will be cheering the loudest in Beijing are the generals and the People's Liberation Army and the communist party bosses in the state-owned industries who don't want reform. If we turn our back on reform, if we isolate China, it will be a mistake of gargantuan proportions, not only economically, but more importantly, from a political standpoint.

RAY SUAREZ: We've only got less than a minute.

RICHARD TRUMKA: No one is saying isolate China. That's the smoke screens they blow out because they don't have the facts. Looks, we have a $70 billion trade deficit with China. The U.S. International Trade Commission came out with a study yesterday saying, if you give them permanent, permanent NTR status, two things will happen. We'll lose one million jobs, and the trade deficit will increase.

CHRISTOPHER PADILLA: You're up to one million now? You started at 600,000.

RICHARD TRUMKA: His company has told you what they want to do. They want to produce there locally. That's what this is about. I think you have to go back and ask yourself, you know, if it's so good, why don't we just continue the way we are right now, because no one but no one is saying isolate China. We're saying keep the only lever that we have, and that's the annual vote. You lose nothing if we maintain that annual vote.

RAY SUAREZ: And gentlemen, we'll have to stop it there. Thank you very much.

FOCUS - INSURING KIDS

GWEN IFILL: Now, part two of health correspondent Susan Dentzer's report on the uninsured. Last week she presented a portrait of several uninsured adults in Indiana; tonight, a program in that state aimed at children. Our health unit is a partnership with the Henry J. Kaiser Family Foundation.

SPOKESPERSON: Don't go too high.

SUSAN DENTZER: In the category of harried parent, few Americans have anything on Reginald Roberson of Gary, Indiana.

REGINALD ROBERSON: I get up sometimes like between 6:00, 6:30 in the morning, you know, get their breakfast done.

SUSAN DENTZER: Roberson is a single father who juggles caring for his children, Renee and R.J.

REGINALD ROBERSON: I load them up for school. If there's any medical attention or appointments or anything I need to call and make for the kids, I get that done. The time goes pretty fast, so then it's almost like 2:00, time for me to go pick him up first. Then I pick her up from school so I can go right in to work.

SUSAN DENTZER: Roberson just started a new job working about 40 hours a week in a restaurant near his home. Unlike his former jobs, this one comes with health insurance. But the coverage is expensive, and Roberson can afford it only for himself. That would leave his kids uninsured.

REGINALD ROBERSON: You know, when they get sick, I have to go, like, to the local Walgreen's drugstore or something and just "over the counter" it and try to get them well.

SUSAN DENTZER: Now a two-year-old Indiana program is helping Roberson obtain health insurance for his kids. Aimed at children from low- and moderate-income families, it's called Hoosier Healthwise.

LISA SALARY: I spoke with DCFS And...

SUSAN DENTZER: Lisa Salary is a Hoosier Healthwise outreach worker and a key soldier in the highly successful program. Her job is to find eligible families and help them apply for benefits. To speed up enrollment, salary's been equipped with high-tech tools, like a laptop computer and cellular phone.

LISA SALARY: Excuse me, ladies, can I talk to you for a second about Hoosier Healthwise? Do you have health insurance...

SUSAN DENTZER: Salary tracks down prospective enrollees at shopping malls, daycare centers, church services, or any other place she thinks she can find them.

LISA SALARY: She can call that number. I can come out to her, or she can come to me. We can enroll her on that day and get her insurance, okay, right away.

WOMAN: Okay.

SUSAN DENTZER: Hoosier Healthwise came about because of the creation in 1997 of the joint federal and state Children's Health Insurance Program, or CHIP. Proposed by President Clinton and later enacted by Congress, CHIP offered the states $24 billion in federal grants over a five-year period. All 50 states, including Indiana, now have their own CHIP programs. That's resulted in more than two million children receiving coverage in the past two years. And of all the states, Indiana's CHIP program grew fastest from 1998 to 1999. Indiana's Democratic governor, Frank O'Bannon, wants all of Indiana's uninsured children covered.

GOV. FRANK O'BANNON, (D) Indiana: Well, you know, I came in as governor and we started looking at early childhood development, and it told us all, this is the basis to build on. If we're going to have a better education system, the child has to be healthy, it has to be stimulated, it has to be loved. So it's the basis. Everything else comes off that-- a good education, a good job, a good family, a good community.

SUSAN DENTZER: With an infusion of state and newly available federal dollars, Indiana developed a two-step plan. First, it expanded its existing Medicaid program so that it covered children in families earning up to 150% of the federal poverty level. That means a family of four earning $25,600 a year. Then, just last January, it added a separate package of health coverage for children from moderate-income families, earning as much as $34,000 for a family of four. Families in the first part of the program pay nothing for the coverage. Families in the second part pay modest monthly premiums and some low co-payments.

AD SPOKESPERSON: All children deserve good healthcare. But what about the children who don't have medical and dental care because their parents can't afford it? That's why the state expanded Hoosier Healthwise, the healthcare coverage program for children 18 years of age and younger.

SUSAN DENTZER: Nancy Cobb, Indiana's CHIP program director, says in order to reach all eligible children, the stigma surrounding public health insurance programs had to be eliminated. That attitude is a carryover from the days when these programs were tied to welfare.

NANCY COBB, CHIP Program Director: It's very important to eliminate the stigma of welfare and of considering health insurance welfare, because families who are working are very proud of what they are doing. And while they want to provide health care for their children, they don't want to feel like this is public assistance. We want to invite them into the system and be sure that they get the treatment they need and with the respect that they need.

SUSAN DENTZER: That's why the state replaced the old Medicaid cards with new ones that look like those issued for private health insurance. Then it named the whole program Hoosier Healthwise. It also launched an outreach effort to alert as many families as possible about the newly available coverage.

SPOKESPERSON: I need to ask you a few questions about your application.

SUSAN DENTZER: The state then created simple procedures for enrolling in the program, including one-page applications instead of the 30- page forms states have typically required of Medicaid applicants.

SPOKESPERSON: If you fax those tomorrow, I would have their coverage started.

SUSAN DENTZER: More than 500 Hoosier Healthwise enrollment centers were also set up at schools, Head Start programs, and other sites across Indiana. Although the state originally expected just 91,000 children to enroll in the first phase of the program, eventually more than 115,000 signed up. Another 40,000 children are expected to enroll in the second phase this year. Surprisingly, many of those who enrolled would have been eligible for coverage under Indiana's old Medicaid program. But for various reasons, they had fallen through the cracks.

NANCY COBB: We know that an awful lot of those children were needing care and simply weren't enrolled. We weren't reaching out. We weren't actively seeking them, and now we are.

SPOKESPERSON: Michelle? What's that?

SUSAN DENTZER: Indianapolis pediatrician Nancy Swigonski says Hoosier Healthwise has already made a huge difference. For example, many previously uninsured children can now benefit from so-called well-child care.

DR. NANCY SWIGONSKI, Pediatrician: We know that children benefit remarkably from preventive care. We know that many things that... many of the morbidities of childhood are, in fact, preventable, and that by giving immunizations, by screening for leads, by performing some of these other things, we can insure the long-term health of children.

DR. NANCY SWIGONSKI: (talking to patient) I want to see your ear. Where's you ear?

SUSAN DENTZER: It's long been known that children without health insurance are far more likely to show up in a hospital emergency room instead of a doctor's office for treatment of common childhood conditions like ear infections. They're also more likely to be hospitalized for conditions, like pneumonia, that could have been successfully treated at an earlier stage. But now, with Hoosier Healthwise, Swigonski says, parents are more likely to bring children to the doctor sooner when they're sick. These benefits, of course, have come at a price.

PATRICK KIELY, Indiana Manufacturers Association: Good morning. Any messages?

SUSAN DENTZER: Patrick Kiely is president of the Indiana Manufacturers Association, a business group that has backed Hoosier Healthwise. Even so, as a former state senator, he worries.

PATRICK KIELY: We do worry about, you know, can you bankrupt state government? Our Medicaid budget has risen by more than a billion dollars in the last four years. The majority of that is federal reimbursement, but what happens if we ever have a significant downturn in this economy again and a lot of people come back to Medicaid?

SUSAN DENTZER: But so far, Republican State Senator Steven Johnson says with state coffers relatively flush, bipartisan support for Hoosier Healthwise has remained strong.

STEVEN JOHNSON, (R) State Senator: I have not seen an erosion at all in the bipartisan support for the CHIP program, none whatsoever. The CHIP program, if designed appropriately, takes a whole generation of individuals when they are very young, and helps them understand how they are participants in their own health care.

SUSAN DENTZER: State officials have now set up a commission to determine whether CHIP should be expanded further, at least to cover the parents of children who are enrolled in the program. O'Bannon admits it could be expensive, but still thinks it's necessary.

GOV. FRANK O'BANNON, (D) Indiana: Well, I think... I think we've got to continue to push forward to cover more people who are uninsured, and hopefully, at some point, make sure no one's uninsured as far as health care.

LISA SALARY: There are 8,000 children in Lake County who need health insurance. And I'm out to find those 8,000 children, and I can't do it alone. So if I could get your help, it would be wonderful.

SUSAN DENTZER: To many health policy experts, the state's success with Hoosier Healthwise suggests a powerful lesson: Where there is a will to cover the uninsured, there clearly is a way.

GWEN IFILL: Information on programs for uninsured children in other states is available at our online NewsHour website at pbs.Org. The results of a Kaiser Foundation NewsHour poll on the uninsured are also there.

NEWSMAKER

GWEN IFILL: Now, our Newsmaker interview with South Africa's president.

THABO MBEKI: I solemnly and sincerely promise I'll always promote all that will advance the republic and oppose all that may harm it.

GWEN IFILL: Last June, Thabo Mbeki became South Africa's second post- apartheid president, succeeding a folk hero, Nelson Mandela, and assuming control over a nation of 43 million. Its black majority dominates the country's politics through the African National Congress. Its white minority still controls much of economy in this, the African continent's wealthiest nation. Born in Queenstown, South Africa, in 1942, Thabo Mbeki's life has tracked the struggle of South Africa's black majority. His parents were antiapartheid activists. They were also Communists. Mbeki's father, Govan Mbeki, ran a small store. The elder Mbeki was jailed for his activism, and spent nearly three decades in prison alongside Nelson Mandela.

MARK GEVISSER, Mbeki Biographer: Thabo Mbeki grew up in a family where his parents were in danger of being arrested and locked up at any moment. And people will tell the story about how they came to see Govan Mbeki in the shop and there was Thabo sitting behind the counter. And they would say, "we're here to see your father." And these would be comrades. And Thabo, even as a little boy at the age of eight or nine, would know he couldn't reveal where his parents were.

GWEN IFILL: Thabo Mbeki spent 28 years in exile in England, studying economics at Sussex university and mobilizing black South African students living abroad.

SPOKESMAN: Aid Africa!

GWEN IFILL: He returned home when Mandela was released from prison and the African National Congress was legalized in 1990; he became Mandela's deputy president four years later. Mbeki traveled the world meeting international leaders. His message: That post-apartheid South Africa would now move forward politically and economically. Mbeki was elected president last year, winning 66% of the vote.

PRESIDENT THABO MBEKI: Our people-- both black and white-- have mandated us to remain firm in pursuit of our vision of a non-racial South Africa, and the important goal of national reconciliation.

GWEN IFILL: The new president inherited a full plate of economic and social problems: 30% unemployment, a failing currency, rampant urban crime and violence. And in the past decade, an AIDS epidemic has ravaged the country. According to recent estimates, one-quarter of the nation's population will die of the disease in the next 10 years. Mbeki created a stir at home and abroad last month when he questioned whether there is a link between HIV and AIDS, writing in a letter to President Clinton and other world leaders that AIDS in Africa should be treated differently than AIDS in other areas of the world. "...a simple superimposition of Western experience on African reality would be absurd and illogical, "Mbeki wrote. "Such proceeding would constitute a criminal betrayal of our responsibility to our own people." Mbeki's statements, and his stature as leader of one of Africa's most powerful countries, carry weight elsewhere on the continent as well. In neighboring Zimbabwe, where President Robert Mugabe has incited black veterans to seize land owned by the white minority, Mbeki has tried-- so far unsuccessfully-- to broker a peace. But Mbeki has stopped short of publicly criticizing Mugabe who, like Mbeki, came to power after helping to overthrow a white minority government.

PRESIDENT THABO MBEKI: Accordingly we trust that ways and means will be found to end the conflict that has erupted in some areas of Zimbabwe, occasioned by the still unresolved land question in this country. Peace, stability, democracy and social progress in Zimbabwe are as important for yourselves as they are for the rest of our region.

GWEN IFILL: Mbeki arrived in Washington on Sunday for his first state visit. I spoke with him earlier today.

Mr. President, welcome.

PRESIDENT THABO MBEKI: Thank you.

GWEN IFILL: Yesterday you met with President Clinton and Vice President Gore, and you brought your concerns to them. Do you have any sense that the United States is prepared to take a lead role on the issues which you came here to discuss?

PRESIDENT THABO MBEKI: Yes, most certainly. I'm quite confident the administration, the President, Vice President, their cabinet are very, very engaged with these issues of peace and stability on the African continent, with issues of African development throughout the continent, not just South Africa. With issues of AIDS that have... these kinds of questions. There's a very great determination to assist us as Africans, to work with us, to plan with us, to think with us and to act together with us to address these problems. It's actually very... It's very inspiring to see that level of commitment from what after all is the leading country in the world.

GWEN IFILL: Do you think that commitment translates into financial aid and help and support?

PRESIDENT THABO MBEKI: Yes, indeed. We have agreed that in the event that some of these matters which require further discussion to produce an actual program of action, we will continue to interaction among ours on an agile basis, so that actually there is an actual program of action which can then be implemented.

GWEN IFILL: You came to power as a champion of the African renaissance. There are so many problems now on the continent in so many different countries from the Congo to Zimbabwe to Sierra Leone. Are you concerned at all that the African renaissance is being derailed?

PRESIDENT THABO MBEKI: No. You're quite correct. There are many, many problems, such as the ones that you've mentioned. And by their nature, I think they also tend to overshadow the positives. If you just take one question, the ending of military rule in Nigeria, the election of a government led by President Obsanju, that's an enormous change, impacting on the rest of the continent. Consistent with these issues we've been raising with the African renaissance. Take our own region of South Africa in the last... within the last year. We've had five general elections in this country of Southern Africa, all of which have been free and fair. I think... there are many of those sorts of things that are happening. I heard the other day that among the fastest growing economies in the world, three of them are in Sub-Saharan Africa. So, no, I... I'm very optimistic.

GWEN IFILL: But in countries like Zimbabwe, which is your neighbor to the North, those kinds of situations and the trauma that's going on there overshadows these other issues you're talking about.

PRESIDENT THABO MBEKI: It's true. You are quite correct. I mean, that's what happens when you get those sorts of events and incidents. With regard to Zimbabwe, therefore, we are a neighbor. And it is quite clear that we need that to engage the government as much as is possible to address those issues, the land question and then the forthcoming general elections in June.

GWEN IFILL: How are you personally engaging President Mugabe on that subject?

PRESIDENT THABO MBEKI: Well, we've been speaking very regularly with President Mugabe, as we've been speaking also very regularly with the British prime minister, Prime Minister Blair, as well as the secretary-general of the united nations, Kofi Annan. So that together we can move this situation and find solutions. I'm glad to say that the UN Secretary-General is leading a process to address the land question. There's been agreement between the principle parties to this, which is Zimbabwe and Great Britain, about how to proceed. And hopefully that will get us moving on this matter of the land redistribution, which was agreed, in fact, in 1998. And we've also been engaged with the matter of the elections. The parliaments, for instance, of Southern Africa, will be sending it over by the end of this week... to ensure we have that international presence of the size, scale, that they're able to reach all parts of the country and therefore assist in ensuring that you create this climate which would enable the people of Zimbabwe to choose whichever government they wish.

GWEN IFILL: Now, you have obviously been preoccupied to a certain degree with your own domestic issues in Southern Africa and South Africa, unemployment, crime, poverty, and also AIDS. You've said that you were mischaracterized in some of the comments you said about the relationship between HIV and AIDS, but you have also opened the door to some very controversial scientists to be part of your look at how South Africa should address the problem. Exactly where do you stand with that now do you think?

PRESIDENT THABO MBEKI: Well, yes, I don't know where these reports came from, that we're taking a position saying there's no connection from HIV -- between HIV and AIDS. I never said it. At the beginning of this month, the month of May, we -- fortunately a whole group of scientists came to South Africa, representing the different points of view with regard to these matters.-- one of the results of which was that the Centers for Disease Control in the United States agreed that they would host a process which would include all these different points of view among the scientists, so that together they can work on these matters that are outstanding with regards to scientific matters that are outstanding with regard to the HIV/AIDS because we need more information so that we can act more vigorously and more effectively.

GWEN IFILL: You have questioned, for instance, whether AZT should be disseminated to pregnant women. Why is that?

PRESIDENT THABO MBEKI: This is a complex question. We haven't questioned. But there are many, many problems that arise. If, for instance, you take the reductions in drugs announced by 5% -- antiviral drugs by five pharmaceutical companies working together with the United Nations.

GWEN IFILL: In price?

PRESIDENT THABO MBEKI: Reductions in price. Calculations of our health minister, if she at the reduced prices bought the retroviral that are indicated for the size... the incidents of HIV in South Africa, that would in fact consume the totality of her drug budget.

GWEN IFILL: So itself just too expensive.

PRESIDENT THABO MBEKI: Even at the reduced prices. So whatever one might say about the drugs themselves, these questions are arising: Affordability, medical infrastructure in order to dispense these medicines because it's a directive of the World Health Organization. That has to be done under very strict medical supervision because of the potential toxicity.

GWEN IFILL: Did Vice President Gore or President Clinton yesterday ask you to explain that more fully for them?

PRESIDENT THABO MBEKI: We discussed that matter with both of them, and we're agreed that it's necessary to continue to engage one another on these things. There are many issues -- some of which, for instance, include issues of opportunistic diseases -- opportunistic to AIDS. And that would include TB, Meningitis, diseases of this kind, which have to be treated. So to deal with the totalityof the situation, you need a very comprehensive program.

GWEN IFILL: Not just AIDS, but all these other diseases which also...

PRESIDENT THABO MBEKI: They're fundamental. AIDS is the... malaria is the biggest killer disease on the African continent. We have to respond to that. And malaria has developed resistance to existing drugs. That's why even President Clinton was raising this. We need to be working on new drugs.

GWEN IFILL: Is that what you mean when you say there should be uniquely African responses to uniquely African problems?

PRESIDENT THABO MBEKI: Yes. You see, the incidents of HIV/AIDS on the African continent you couldn't say is quite the same in the United States. Just take one basic factor, that among the majority of the population in the United States, the majority of your HIV-positive people will remain homosexual. There's an increasing minority of heterosexual transmission. But in Africa, it's totally heterosexual. So these are two different conditions. And we've got to respond in a way which actually makes an impact on AIDS and really results in our getting on top of this program. So we're really searching as hard and as agilely as we can to elaborate those specific responses while in the meantime, continuing with the rest of the campaigns of public awareness, safe sex, use of condoms, development of vaccines, you know, all of these things, general mobilization of the people. But at the same time, we've got to answer the question, what extra do we do to make sure we actually have an impact on what is a very serious matter.

GWEN IFILL: And how does the United States help you in that?

PRESIDENT THABO MBEKI: As I said, the initiatives that have been taken by the U.S. Government about reductions in the prices of drugs and medicines to poor countries. Fortunately, I have not just dealt with the AIDS drugs, but all of the related conditions -- the work that is being done to try and help to expedite development of a vaccine. That's an important part of this. We discussed the question of the need to strengthen the medical infrastructure so that indeed when you do dispense these anti-viral drugs, you respond to what I think the WHO is saying correctly, you then need close medical supervision, which means you have to test these people every day. To see... now, if you got a weak infrastructure, you can't. You can't just...

GWEN IFILL: Which is what your dealing with, a weak infrastructure.

PRESIDENT THABO MBEKI: Which is what we're dealing with. This is what South Africa is dealing with. You can't just prescribe and say, "take these tablets and go home." Because the person will die of toxicity.

GWEN IFILL: I have a final question, which is more about your leadership. When Nelson Mandela came the office, he was considered to be a conciliator, someone who was charged with reconciliation. You have been described as a more transformational leader. Do you agree with that, and if so, what does that mean to you?

PRESIDENT THABO MBEKI: I think to some extent it's a kind of people trying to summarize things. You know, President Mandela was, as much concerned about transformation as we are. And we are as concerned about the issues of national reconciliation as he was. These things have to go together. You know, we come out of South Africa, we come out of a very divided society. It was six years into the period of change. And as you would imagine, it's not possible in six years to have bridged these racial gaps, to have overcome the mistrusts and the conflicts of the past, and therefore of you got to continue to address this matter of building a sense of common nationhood among South Africans. That has to continue. But you've got to deal with these challenges, like the challenge of enormous racial inequalities in South Africa, in all respects. So the transformation issue becomes important. But I suppose people make sort of... they want little pockets. So this one is reconciliation. That one is transformation. It doesn't quite work like that.

GWEN IFILL: Nothing could possibly be that simple.

PRESIDENT THABO MBEKI: No.

GWEN IFILL: President Thabo Mbeki, thank you very much.

PRESIDENT THABO MBEKI: Thank you very much.

RECAP

GWEN IFILL: Our China discussion ran long tonight, so we're unable to bring you the favorite poem project, as promised. We'll reschedule it as soon as possible. Again, the major stories of this Tuesday, the China trade fight went down to the wire in the House of Representatives as both sides lobbied the undecided. And Israel stepped up its troop pullout from South Lebanon amid fighting along the border. We'll see you on-line and again here tomorrow evening. I'm Gwen Ifill. Thank you and good night.