The MacNeil/Lehrer NewsHour

INTRO

JIM LEHRER: Good evening. In the headlines this Friday night, wholesale price figures show inflation still very much under control. Nicaragua took it's "an invasion is coming" complaint against the United States to the U.N. Security Council, and a new statue was dedicated to honor the veterans of the Vietnam War. Robin?

ROBERT MacNEIL: Here's your guide to the NewsHour. We start with a summary of the day's news, then our focus sections. First, the African famine. We have a documentary report and an interview with a top U.N. official. Next, are President Reagan and the Grace Commission right about money the federal government could save? We have a debate between the commission's head and a leading critic. Then Charlayne Hunter-Gault examines the impact of Geraldine Ferraro on Tuesday's voting. And we wind up this momentous week with the views of analysts Gergen and Baron and the nation's political cartoonists.

LEHRER: All the economic numbers continue to come up roses. Today it was the tally on wholesale prices for October. They showed a 0.2% drop. That marks the first time in 17 years prices have gone down three months in a row. The Labor Department, which released the figures, said it was the wholesale prices for cars and trucks that led the way down, countering increases in food and energy prices. Robin?

MacNEIL: It was a busy day today in the escalating war of rumor and charge between the U.S. and Nicaragua. Nicaragua mobilized 20,000 students used to harvest coffee for defense against an American invasion the Sandinistas claim is imminent. They appealed for blood donors. The U.S. denied any intention to invade. The Pentagon said military and naval exercises in preparation in Georgia and the Caribbean Sea were not a preclude to military action against Nicaragua. Nicaragua appealed to the U.N. Security Council for an emergency meeting, and there'll probably be one on Monday. And, to go back to what started all this, the Soviet ambassador to the United Nations, Oleg Troyanovsky, denied that Moscow had shipped MIG warplanes to Nicaragua. There were more sonic booms over Nicaraguan cities. Sandinistas say they're caused by U.S. spy planes; the Pentagon refuses to comment. For the scene in Nicaragua, here's a report by John Simpson of the BBC.

JOHN SIMPSON, BBC [voice-over]: Corinto is a poverty-stricken little town which is nevertheless the place where 80% of Nicaragua's imports come in. Punctually at 8:22 this morning, the same time as yesterday, and American spy plane broke the sound barrier overhead. The possibility of American intervention is regarded here with special anxiety with American frigates just over the horizon. Gangs of dockers hang around the port entrance waiting for work, but they won't be needed today. The most important ship in the harbor is still being unloaded, but not by civilians. During the night the troops here went on full alert. Roberto Martinez, a senior figure in the port administration, denies the whole thing. He tells me he had seen the Bakuriani's cargo and it was just agricultural machinery.

[interviewing] The Americans say there are helicopters on board.

ROBERTO MARTINEZ, Corinto Port official: It's a liar. It's a lie. Never!

SIMPSON [voice-over]: In Managua the tension was converted by the authorities into a carnival in celebration of a Sandinist hero, but one of the revolution's military leaders announced that the 20,000 young people recruited to help with the coffee harvest would be given arms and used for the defense of Managua instead. For the government to imperil its main cash crop in favor of security shows how seriously it is taking the situation.

MacNEIL: After the Soviet Union joined Nicaragua's charge that the U.S. was preparing to invade Nicaragua, there was a formal denial from State Department spokesman John Hughes.

JOHN HUGHES, State Department spokesman: The fact is that there is not an invasion planned of Nicaragua. That stands there. That is not to say tha we have not expressed concern specifically about the question of high-speed jet aircraft arriving in Nicaragua.

LEHRER: The famine in Ethiopia and many other countries in Africa continues, and today the head of the U.S. Agency for International Development said there is an urgent need for a more coordinated approach to the relief effort. AID administrator M. Peter McPherson spoke at a news conference following his return from Ethiopia.

M. PETER McPHERSON, U.S. Agency for International Development: The U.S. government, as you know, is doing really just an enormous amount. We've provided some $60 million in a period of less -- just over 30 days. And I have absolutely no doubt that because of the food that we have shipped from here there are children alive today. I have no doubt about that. What needs to happen now is that the donor community and the Ethiopian government need to agree upon a logistical plan, and that plan, along with the total need, needs to be presented to a donor meeting and an Ethiopian government meeting in the next very few weeks for people to agree upon who's going to do what.

LEHRER: We'll have a major focus segment on the drought and famine in Africa in a few minutes. Robin?

MacNEIL: In Boston today a federal jury ordered the Boston Symphony Orchestra to pay the actress Vanessa Redgrave $100,000 for canceling her appearance in a series of concerts. Ms. Redgrave was engaged to narrate Stravinsky's "Oedipus Rex." The orchestra canceled her, fearing a violent reaction to her support for the Palestine Liberation Organization. Ms. Redgrave claimed her civil rights were violated and sued for $1 million. After eight hours of deliberation the jury awarded $100,000 because the orchestra violated its contract. The award is not final. A federal judge will decide within two weeks whether to approve the award, increase it, decrease it or throw it our. Jim?

LEHRER: Our final story in the news summary is about a Washington ceremony. Two years ago a memorial to the Americans who died in Vietnam was dedicated. The memorial was two black granite walls with the names of those who died. Some veterans objected to that design, and today a statue addition was unveiled. Reporter Jeff Goldman attended the ceremony.

MODERATOR: Ladies and gentlemen, we shall now unveil the statue for the Vietnam veterans memorial.

JEFF GOLDMAN [voice-over]: The newly unveiled statue depicts three Vietnam-era soldiers, one white, one black and an hispanic. The seven-foot tall bronze figure stand in a grove of trees. It overlooks the two-year-old black granite memorial wall displaying the names of more than 58,000 soldiers killed or missing in the Vietnam conflict. Dignitaries attending today's ceremoney say the statue adds a new dimension to the now-completed memorial.

Gen. MICHAEL DAVISON, retired: The statue, the flag, the walls, the trees and grass combine to say to all who served in Vietnam, those who returned as well as those who did not, we fellow citizens respect you. We admire you. We honor you. And we offer you our profound gratitude.

GOLDMAN [voice-over]: From its conception the Vietnam memorial has been embroiled in controversy which almost mirrored the war itself. Many felt the stark black wall was an antiwar statement which did not honor the heroism of those who served. At the very least they felt its meaning was ambiguous. Veterans groups lobbied for a less abstract tribute, and the addition of the statute was the compromise. With or without criticism, the black granite wall has already become one of the most popular monuments in the nation's capital, attracting an average of 12,000 visitors a day. In its simplicity it evokes a wide range of emotions and, according to veterans at the memorial today, the statue complements the nearby wall.

1st VETERAN: The wall versus the statue is one is memorial to the ones who surrendered their souls, and the other statue is to the gentlemen who also surrendered their souls but also came back.

PAUL PENKALA, Chicago: At first I was somewhat upset, but now you have the soldiers guarding the wall, as I see it. They're overlooking the wall.

3rd VETERAN: That statue and that wall is going to be here after I'm gone, and my kids are going to come by it some day and see it. That's all I could ask. Report on Famine

MacNEIL: Our first focus section tonight takes us vividly into the immense problem of the famine in Ethiopia and other drought-stricken parts of Africa. It's not only a terrible moral problem, but a very real practical problem for countries willing to help. Even those ready to provide massive medical and food assistance are finding it very difficult to get it to the people who need it, not least because of the civil war raging in northern Ethiopia. We see these problems in this extended report from Ethiopia by Brian Stewart of the Canadian Broadcasting Corporation.

BRIAN STEWART, Canadian Broadcasting Corporation [voice-over]: All the world has really seen of the great Ethiopian famine is just the most visible part. That's bad enough: the crowds of hungry on the roads, the pathetic scramble for a few grains to survive and, above all, the jammed relief camps like Korm, where more than 100 are dying every day.

[on camera] It has been said that Koram is now the worst place on earth, this year's ultimate mightmare, but it is not the worst and, incredibly, thse people may be regarded as the lucky ones in northern Ethiopia. They've at least had the strength to make it into a camp. Back in the countryside, many don't have that strength. There is mass famine. Little aid is getting through, and aid workers don't like to imagine what that nightmare is like.

[voice-over] The most isolated part of the north is difficult to get into or out of. Much is held by secessionist rebels. But relief pilots, like this Canadian, can get an awful sense of what's happening below. Millions down there are subsistence farmers who must eat their crops to survive, but everywhere the land is brown; there are no crops, so they're starving. And roads are few, so the starving must walk two or three days to find relief. Unknown thousands just aren't making it. This woman carried her sick son for two days to a shelter, but often the weakest must be abandoned.

Sister JEAN HARRIS, British relief worker: I can't imagine how many must be dying in the countryside that we don't know of. Some of these people have come -- there's a couple here, they've got twins and they've left four children behind them. Those children are too sick to accompany them. It took them two days to get here. So unless they can get food to take back to those children, those children will surely die.

STEWART [voice-over]: An Irish priest 17 years in the north says the world was warned famine was coming and should have pre-stocked relief supplies inland months ago, but didn't.

Father KEVIN O'MAHONEY, Irish relief worker: Once the disaster became catastrophic, then they woke up. But if the outside world and the Western European countries had acted, let's say even six months ago, it might be true that this diaster in Ethiopia today could have been avoided. But they were asleep.

STEWART: So it makes you rather angry that this is the case?

Father O'MAHONEY: Oh, desperate. Desperately angry.

STEWART [voice-over]: There's simply no way of knowing the death toll yet. Relief is only getting to a few centers by road or airlift. It may be months before it's known how many set out to reach help and never made it. Throughout northern Ethiopia aid efforts are overrun by the sheer mass of the starving, malnourished and the sick. For aid volunteers, it's not only a question of daily tragedy, but of numbing fatigue as well. Refugees from the famine are crammed into whatever shelter is available. Everyone who can be saved is, but numbers keep growing and supplies are always short. At Koram, chaos is a part of famine as much as suffering and death. For French medics here it's a major effort just to avoid despair after months of growing famine. Some are clearly now on their last reserves.

Dr. MARIE MANUELLA, French relief worker: What is wrong here? Look around!

STEWART [voice-over]: And in isolated Makele, too, the hardest part is deciding who can be fed when everyone is desperately hungry, or medically treated when so many are sick. For everyone here, so many deaths can be numbing. But all are touched by some moments of tragedy. Some faces stand out.

RELIEF WORKER: The child is dying?

Sister OLIVER YOUNG, Irish relief worker: I think so.

STEWART [voice-over]: Bertani Woldio, five-year-old Tigrean Mountain girl, carried for eight hours by her father to a Catholic aid center in Maccalade. But it appeared too late. The sisters did all they could, but they had seen so many cases like this before.

Sister YOUNG: There isn't anything we can do really for this child. The child is too far gone. The child will die very soon. The child has pneumonia; also, as you can see, the child is very malnourished. She probably wouldn't have died if the child had had food. You know, this is as a result, indirectly, of malnutrition.

STEWART: So no feeding, no injection at all can save her life?

Sister YOUNG: Can save this child, no. No, the child is dying, and nothing will save this child now. She will die. You know, there isn't anything we can do at this point for the child. Maybe within 15 minutes.

STEWART [voice-over]: But, amazingly, this was not to be the end of the story of Birtani. Even amidst all the awfulness of drought and famine there are occasional sparks of hope. After hours of covering other tragedies we returned to the Catholic mission and were surprised by what a sister called a small miracle.

Sister YOUNG: She's had an injection, she's had some rehydration pills. This afternoon we'll give her another injection and hopefully she will survive.

STEWART [voice-over]: So in Birtani's case at least, one more was saved from death and given shelter from famine outside. In much of northern Ethiopia famine is caught in the midst of an ending guerrilla war. In the harsh mountains of Tigre Province, almost incredibly, government troops battle secessionist rebels during the worst famine in living memory, the last thing these people need. So all aid efforts at Koram, a contested zone, are severely handicapped. To their anguish, medical staff are ordered to leave these shelters for the desperately ill before dark. The government feels Tigrean rebels will kidnap them to publicize famine in their own areas. It's happened before. Only during the day can order be restored and the mercy effort resumed, as many as possible saved. Ethiopia's own relief agency has been criticized for inefficiency and delay. Given the obstacles, it's remarkable it functions at all.

[interviewing] Are you getting anything like the number -- amount of food you need here?

YESHITICA DEMIREW, Ethiopia government relief worker: We didn't get as much as we can. Now maybe more arrive. This morning we have one truck, which is American donation.

STEWART: That's one truck for the whole camp?

Mr. DEMIREW: No, one truck only we have received. Maybe tomorrow it will come.

STEWART [voice-over]: Food shipments have to move in convoys for fear of capture. Rebels, too, face starvation. Even without attacks mountain roads are treacherous enough and take their toll of the very limited number of supply trucks. And the airlift, too, is restricted. Secured landing strips in the north are few and pathetically ill-equipped for large-scale operations. Despite risks and massive obstacles, relief work does go on. Famine workers still hope the catastrophe will enforce a de facto truce around mercy supplies at least. Whatever happens they say they'll stay on to distribute any food received, wherever they can and as far as it will go.

MacNEIL: That report was by Brian Stewart of the Canadian Broadcasting Corporation. While Ethiopia has held the world's attention recently, the suffering in fact is widely shared throughout Africa.The United Nations Food and Agricultural Organization also reports serious food shortages in Morocco, Mauritania, the Gambia; Bourkina Fasso, formerly Upper Volta; Senegal, Mali, Niger, Chad and the Sudan, as well as in tiny Djibouti on the Red Sea Coast. Also on the list: Somalia, Kenya, Tanzania, Ruwanda and Burundi, Zimbabwe, Mozambique, Zambia, Botswana, Lesotho and Angola. For more on the African famine situation we turn to James Grant, executive director of UNICEF, the United Nations International Children's Emergency Relief Fund. UNICEF has projects operating in 44 African nations.

MacNEIL: Mr. Grant, first of all today, as we heard on the news summary, Peter McPherson of US AID said an emergency meeting is necessary to solve the logistical problems in Ethiopia. Does the U.N. agree with that?

JAMES GRANT: Well, I personally agree with that. At the moment I think to get a U.N. response on this, Secretary General of the United Nations Perez DeCuellar happens to be in Ethiopia at this moment.Today he was at one of the big camps where a hundred or so people have been dying each day, Koram, and he has just appointed, on the recommendation of a number of the agencies, including UNICEF, an emergency coordinator, assistant secretary general forithe Ethiopian emergency operations. I think basically something extraordinary ss required. Things are beginning to happen on a large scale and special coordination measures would be most useful.

MacNEIL: You heard what the Irish priest said in the film we just saw, that this could have been prevented if six months ago some food had been stockpiled, and there were plenty of warnings. Is he correct about that?

Mr. GRANT: Absolutely right. Now, the warnings were there, but the governments didn't respond.

MacNEIL: Why not?

Mr. GRANT: Well, this is a question that many people have to ask. In the Ethiopian case it was a country that's caught up in a matter -- of some of the international political disputes, made it more isolated than some of the other countries might be, and the international community, preoccupied with other things, did not respond. UNICEF, for example, was one of several agencies that a year ago began warning about this. I myself went there in August of 1983; we issued appeals. And this summer we issued another extraordinary appeal for $45 million for all of these most-affected areas in Africa. And so far for that $45 million request we have received $12 million.

MacNEIL: Is that the total aid, of all this rush of aid to go into Ethiopia, is that the total so far, $12 million?

Mr. GRANT: That's the total for UNICEF.

MacNEIL: Oh, I see.

Mr. GRANT: Now, obviously, the totals are much larger.

MacNEIL: Through other agencies.Have you an estimate of the adequacy and the timeliness of the aid, now that it's started to arrive in Ethiopia, to solve the problem there?

Mr. GRANT: We are beginning to get a really adequate response, and I think for the short term, looking for the next three to four months, the world community is responding. You have aircraft pouring into Ethiopia from half a dozen different countries and includes the USSR as well as the United States and Italy and the U.K. The food tonnage is being stepped up. We are going to have a mammoth distribution problem inside the country with the food coming in; some 3,000 tons a day are needed. We can get that into the ports; the real problem is going to be the internal distribution. We saw the pictures of the lack of roads, the fighting that's going on. And even with the airlift and additional trucks that are coming in, there will be serious problems. My guess is that it will be easy enough to get 3,000 tons of food a day into the country; it'll be hard to get 2,000 tons a day out to those who really need it.

MacNEIL: What about the other countries on the list we went through? Is there any other country or other countries where the situation is anything like as acute as it is in Ethiopia?

Mr. GRANT: Yes. Not on this same scale.

MacNEIL: Meaning numbers?

Mr. GRANT: Numbers. Because Ethiopia is a big country; it's 32 million people and 12 of its 14 areas are affected. But if one goes to Chad, Mozambique, Angola, you will find in the northern part of Mozambique situations very close to this where it's a combination of drought and civil strife. You go to the highlands of Angola, it'd be very similar, and in Chad also quite similar.

MacNEIL: Now, what is being done in those countries?

Mr. GRANT: Well, utterly inadequate responses are coming. Let's face it. It was just three weeks ago, on, I think, about the 22nd of October, not quite three weeks ago, that the media -- BBC came; NBC teams, ABC teams -- captured this thing on film. Now, this has been going on for weeks and months, and suddenly it is just like a spark in a gas-filled room. It's exploded across Europe, Japan and North America.

MacNEIL: Is this the way to handle these situations, to try and create a very big, dramatic media situation every now and then and then have the whole world galvanized and rush in tons of supplies? Is that the way to deal with this?

Mr. GRANT: No, but sometimes it takes things to get darker before the world community will respond. We remember at Kampuchea that it really had to get very bad and then the world community responded and we saved a people from disaster. Hopefully this marks the beginning of a similar response here. Now, the response for Africa has to be much broader than just drought relief, because it's these countries that have been the most heavily hit in the world by the global recession. You go down to Zambia, their per capita income is one-third less. You have civil war. You have a lack of trained people. Governments have had poor policies.

MacNEIL: Briefly, you're right at the center of this. What is your own idea of what the right way in the long run of dealing with this -- this isn't going to be the only time there's going to be a massive drought in Africa on the continent. What is the right way to deal with it?

Mr. GRANT: Well, the important thing to remember is that Africa itself is a very rich continent. It's a vast place. A little place like Mali, where -- I called it a "little place like Mali" with its seven million people. It's twice the size of France with a great river -- Stretanesia [?] River runs through it. It's a country with great potential, but it has people starving to death today. And so really what we need first and foremost is a developmental response that focuses on getting the food production up, getting income into the poor people's hands, getting roads built. And, looking ahead 10 years, one can look forward to prospects of dealing with this. Few people would realize that the death rate in a country like Denmark 100 years ago among children was about the same as it is in Ethiopia today, or in Mali. So that Africa has a great potential, but the world community has to come to its rescue and, on the economic front, on stop supplying arms to the groups helping to foment -- the outside world is helping to foment much of the civil strife that's going on in these countries. And, in the meantime, respond on the immediate front, which is not just the question of food, because over half of the malnourished children that are dying in Africa, some 4 1/2 million small children die every year quite apart from this problem. And the majority of them die of the dehydration that comes from diarrhea. Over a million have died because they haven't been immunized with 50" worth of vaccines for life. And this counterattack on what we call the silent emergency that takes these 12,000 to 15,000 small children every day needs to go hand in hand with the response, as Peter McPherson said, to the loud emergency that we see on our screen. When you realize that Ethiopia, without this drought, some 350,000 small children would have died this year anyway, about 1,000 a day. So that what the world needs to do is respond to both of these emergencies, to be honest to itself. And I myself believe the world can.

MacNEIL: Well, Mr. Grant, we have to leave it there now. Thank you very much for joining us.

Mr. GRANT: Thank you.

MacNEIL: Still coming up on tonight's NewsHour, the Grace Commission and President Reagan say billions can be cut from federal spending by business efficiency. Tonight, a debate between the head of that commission and a leading critic. Then Charlayne Hunter-Gault examines the impact of Geraldine Ferraro on the Presidential voting. Judy Woodruff discusses that and looks back on the week with our political analysts Gergen and Baron, and we sum up the election with the saucy opinions of the nation's political cartoonists. Budget Cutting: Grace Commission How To?

LEHRER: The election is over but not yet forgotten. There is still much analytical and debate work to be done, sorting through loose ends and trends, pretentions and intentions. Tonight we devote an election week's end focus section to a few more of them. First and foremost being an answer Mr. Reagan gave at his morning-after news conference Wednesday. The question was, 'Now that you have won, sir, who will you reduce the federal budget deficit?" Mr. Reagan said there were 2,478 ways to do it, all contained in a report from the Grace Commission. The Grace Commission. It was formed in 1982 to find ways to save government money. J. Peter Grace, head of W.R. Grace & Company, was in charge. Its conclusions: $424 billion could be saved if its 2,478 recommendations were followed, including $59 billion from Social Security, Medicare and food stamps; $61 billion from pension; and $45 billion in defense purchasing. The White House loved it, but not everyone else did. The Washington Post, for instance, called it "nonsense" when they were announced last January and, in an editorial yesterday, repeated it, saying, "Most of these alleged money-saving ideas are pure hokum." The Congressional Budget Office and the General Accounting Office both have questioned Grace's figures, too. But this week Chairman Grace launched his own television campaign for his commission findings, and here's one of the commercials.

NARRATOR [voice-over baby crying]: If federal deficits continue at their current rate, it's as if every baby born in 1985 will have a $50,000 debt strapped to its back.

"OFFICIAL," over baby's bassinet: Let us review these figures for you.

NARRATOR [voice-over]: At W.R. Grace & Company we're not looking for someone to blame. We're too busy crying out for help. Write to Congress. If you don't think that'll do it, run for Congress.

"OFFICIAL," with forms for baby: Now if you'll just sign here.

NARRATOR: The last thing we want now is our kids following in our footsteps.

LEHRER: Well, let's go to Mr. Grace.He is with us tonight from public station KLRU in Austin, Texas. He is not alone here tonight. Here in Washington is Congressman Pat Williams, Democrat of Montana, a member of the House Budget Committee, whose opinion of the Grace Commission findings are similar to those of the Washington Post editorial page. Congressman, the Post used the word "hokum" to describe Mr. Grace's commission's findings. What word would you use?

Rep. PAT WILLIAMS: Well, I think smoke and mirrors might be a better indication of the Grace Commission findings. We're not going to balance the budget by simply trying to find one pea under three thimbles that are moved around. If we're going to really balance the budget we have to do better than that, and we have to do it fairly.The difficulty with the Grace Commission, it seems to me, is not that they didn't do a yeoman's task -- 47 volumes -- of trying to find ways to balance the budget. The problem with it is that they pretend, and President Reagan pretends, that all they've done is say you can cut a little fraud, waste and abuse, and then you'll have the budget balanced, so why doesn't the Congress go ahead and do it? And these are major policy changes, not just a little fraud, waste and abuse here and there.

LEHRER: Mr. Grace?

J. PETER GRACE: Well, that's the same thing that Congressman Williams said on the Today Show, and it's obviously his opinion. He's on the House Budget Committee, as you said, but Chairman Jones is on our Citizens Against Waste group, so I think the chairman disagrees with the member of the House Budget Committee. As far as The Washington Post is concerned, they haven't looked at a quarter of the 2,478 suggestions. This is a cultural problem. Business people don't let people cut a quarter of a billion dollars in free timber off government lands; they don't tow in rich yacht owners off the Pacific Coast or off Cape Cod when they have non-life threatening situations and there are commercial towing companies. They don't charge 3% for national parks of what the costs are, etc., etc. There are thousands of ways to do this. Their computers are obsolete. They don't have the information needed to make this a properly costed government, and I stand by each and every one of the 2,478 suggestions. I applaud Chairman Jones' support, coming on Citizens Against Waste; I applaud the President's support that he gave us yesterday.

LEHRER: But you don't applaud Congressman Williams, right? Congressman, how do you --

Mr. GRACE: Well, I disagree with him, that's all. He's a fine guy from Montana. He led the fight last summer -- the power, public power marketing commission -- they had a, for instance, all this power sold in those four states where he comes from, Montana, for 2.45" a kilowatt hour. People in San Diego pay 12 1/2"; people in New York pay seven or eight cents. They extended that for 30 years, and this doesn't even expire until 1987. And the cost of that over 30 years is 86% of a trillion --

LEHRER: And you just --

Mr. GRACE: That's the kind of stuff they're doing in Washington, and it has to stop.

LEHRER: Congressman?

Rep. WILLIAMS: Well, look. Here's the difficulty. You're not going to balance this budget by pretending to cut out a little fraud, waste and abuse. What the Grace Commission does is make major, significant and, for the most part, unfair policy changes in the way the people want the government to do business with it and the government does do business.

LEHRER: Give us an example.

Rep. WILLIAMS: Well, they're going to cut 96% of all food stamp beneficiaries off of food stamps.They're going to take 400- to 500,000 households that receive food stamps and eliminate it. They're going to increase taxes in this country, primarily on benefits. That is, if you receive Social Security benefits, unemployment benefits; if you're a farmer and you receive agriculture benefits or a small-business man who receives some minor federal subsidy, the Grace Commission is going to tax it. When the President says if you want to know how to balance the budget look at the Grace Commission, what he's saying is what he wouldn't say in the campaign, and that is, "I, Ronald Reagan, am for raising taxes $75 billion." And the interesting thing, Jim, is this.

LEHRER: Seventy-five billion dollars of tax raises?

Rep. WILLIAMS: Seventy-five billions over a three-year time period, and the interesting thing is this. Of the $75 billion, $60 billion of it comes from people who receive means-tested entitlements. Now, that means people of modest income. If Mr. Grace and the other 159 corporate executives that put this Grace Commission together were really sincere about being fairas they moved toward balancing the federal budget, they should have recommended that corporate executives and major corporations in this country that are getting away with murder without paying their taxes start paying them. But there isn't one single suggestion in the Grace Commission report that the wealthy and the large corporations in this country begin to pay their fair share. I can understand it. The commission report was written by 159 corporate executives.

LEHRER: Mr. Grace?

Mr. GRACE: Well, the first place, we weren't asked to look at taxes, and that's a typical red herring. These congressmen are great at debating. They've got great personalities, but they don't know what they're talking about. We never said that we'd tax any of these benefits. We said that if you're going to find out how to control the cost of government, when President Kennedy was the president, social programs were $38 billion a year, and he was called Camelot. Now they're $413 billion, and we say we're still not paying enough. So what --

LEHRER: Well, let's be specific --

Mr. GRACE: -- we've said is, get a W-2 form and find out who gets what and how much people are getting or making before they get it. We never said to tax that. That's an untruth or a misunderstanding, whatever way you want to call it.

LEHRER: All right, what about the congressman's specific thing that you want to take what percentage of people off food stamps?

Rep. WILLIAMS: Well, it'd take about 400- to 500,000 households that now receive food stamps and eliminate them.

LEHRER: Is that correct?

Mr. GRACE: Out of how many? Out of how many households?

Rep. WILLIAMS: Well, it's 400- to 500,000 people, Mr. Grace --

Mr. GRACE: Out of how many --

Rep. WILLIAMS: -- that deserve food stamps.

Mr. GRACE: Out of how many?

Rep. WILLIAMS: Well, you'd eliminate about 96% of the food stamp beneficiaries in this country.

Mr. GRACE: That's untrue, completely untrue. I deny it. And I challenge you to prove that.

Rep. WILLIAMS: Well, they'd lose -- 96% of the people that now receive food stamps would lose benefits.

Mr. GRACE: They would not. They would not.

Rep. WILLIAMS: You'd close --

Mr. GRACE: That's untrue. That's an untrue statement.

Rep. WILLIAMS: You'd close 7,000 post offices. You see, here's the point.

Mr. GRACE: We would not. We'd close -- what we said that 12,000 post offices serve less than 100 people. That's not efficient. We didn't say we'd close any. There are ways and means of doing that on a more efficient basis.

Rep. WILLIAMS: Well, you show a dollar savings, sir, for about 7,000 post offices to be closed in this country. The point -- the point is this. The difficulty is not whether or not we should balance the federal budget or move toward doing it. Of course we should do that. The problem is that your commission report and the reports about it -- the news reports about it -- seem to indicate that just with a little paring here and there, without any pain for the public, we're going to be able to balance the budget. But when you begin to look into your report, sir, what you find is that you want to make major changes, you want to cut benefits to Social Security recipients, to Medicare recipients, to farmers, to small-business people and to veterans all across this country. I'm just saying that the American people need to understand that if we're going to balance this budget there's enormous pain involved. One other thing bothers me about your suggestions, Mr. Grace. You don't make one major policy change recommendation for the Defense Department. You make some accounting and procurement changes which are pretty good and some of which the Congress has adopted -- $3 1/2 billion worth, but you don't --

Mr. GRACE: Out of 103. Big deal.

Rep. WILLIAMS: -- make a single major policy change.

Mr. GRACE: Big deal! Three and a half billion out of 100. You dare to stand up and claim credit for that? We've got $103 billion in the Defense Department. Big deal! You took $3 billion. This is typical of the whole attitude of Congress.

Rep. WILLIAMS: Well, we can get $30 billion if you'll agree to cut out the MX missile. Do you think we ought to do that, sir?

Mr. GRACE: I'm not touching specific weapons systems. I'm showing how you can run the --

Rep. WILLIAMS: Well, you can touch -- you don't mind touching specific food stamp benefits.

Mr. GRACE: I did not touch food stamp benefits. We said that the formula was obsolete and they didn't credit the school lunch programs. Answer that. Did they credit it or didn't they?

Rep. WILLIAMS: No.

Mr. GRACE: No. Okay, why didn't they?

Rep. WILLIAMS: Well, I don't know.The accounting procedure, I suppose.

Mr. GRACE: Well, we could get together and have a nice, friendly discussion --

Rep. WILLIAMS: Sure, well, we have.

Mr. GRACE: You're a good guy. You didn't answer the power marketing thing. How do you have the government charge 2.45" --

Rep. WILLIAMS: Well, let me answer the power marketing thing.

Mr. GRACE: -- in four states? Why don't you go out on a national referendum and see whether the people in the other 46 states want to pay that?

Rep. WILLIAMS: Well, Jim, let me answer the power marketing thing. There is a perfect example of what the Grace Commission wants to do. They want to sell off -- to private industry, by the way -- the hydroelectric facilities that -- the federal hydroelectric dams in this country, and then they want private industry to charge the consumer whatever the market will bear. Now, that means that in the Pacific Northwest rates are going to double. It means that you're going to have a massive depression because of electricity costs in the Pacific Northwest. That's the way they'd balance the budget.

LEHRER: Is that what you want?

Mr. GRACE: Why should you have a cost of 2.4" when San Diego wilts on 12" and the national average is 7"? And ask the American people in 46 states whether they want to subsidize that at a cost of $19 billion. Why should 46 states subsidize four states?

Rep. WILLIAMS: Well, 46 states aren't subsidizing four states. You're going to sell power plants all across this country, aren't you?

Mr. GRACE: Most of them are in those four states. That's where the rates are 2.45". Ask the American people. Ask the median American family whose taxes has been raised 246 times in the last 30 years whether he wants to do it. Put it up to a national referendum, and I'll lay you 10 to one you lose.

LEHRER: I'll lay you both 10 to one we gotta go.

Mr. GRACE: Okay. Thank you. Mr. Grace, thank you very much for being with us in Austin tonight. Congressman, thank you very much.

Rep. WILLIAMS: Thank you, Jim.

LEHRER: Robin? Geraldine Ferraro: Victorious Loss?

MacNEIL: Another feature of this election that politicians will be debating for a long time was the impact of Geraldine Ferraro. Did she help the Democratic ticket or hurt it? An NBC exit poll found that she may have hurt the ticket, while the New York Times-CBS poll did not find that evidence. Ms. Ferraro received a tribute from the enemy camp today. Republican campaign director Ed Rollins said she was a tremendous candidate, but that Mondale had so many factors against him that no running mate could have swung the election in his favor. Charlayne Hunter-Gault has this report on the Ferraro factor. Charlayne?

CHARLAYNE HUNTER-GAULT: Robin, even before Walter Mondale made his historic decision to select a woman as his running mate, women were trying to influence that choice by insisting that women, the majority of the electorate since 1980, could make the difference.

[voice-over] When, after much pressure from both women political activists and women elected officials, Walter Mondale did indeed choose Geraldine Ferraro, women enthusiastically reiterated that promise, claiming that her selection would really motivate the troops. The troops may have indeed been motivated, but not enough to fulfill the promise made back in July. They did not make the difference for Walter Mondale in November. In the wake of Ronald Reagan's landslide victory, women supporters moved quickly to mitigate the damage. Ferraro aide and political veteran Anne Wexler.

ANNE WEXLER, Ferraro aide: She added a tremendous amount of excitement and intensity and enthusiasm that was reflected in every rally and every event in her schedule for the whole time she was campaigning, and I think she did a great deal for this party. No one could ever call her a liability.

JEWELL McCABE, president, Coalition of 100 Black Women: America has to come to grips with the fact that there's no monolithic bloc anywhere around.

HUNTER-GAULT [voice-over]: While voter registration among women seems to have gone up as activists predicted, the political phenomenon known as gender gap, that showed a distinct difference between women and men in their presidential voting in 1980, narrowed this year.Women voted for Ronald Reagan 57% to Mondale's 42%.

WILLIAM SCHNEIDER, polling analyst: There was a gender gap in the election on Tuesday, because men voted for President Reagan by over 60% and women by somewhere around 55%. So women were less likely to support Reagan than men; that's the gender gap. But on the other hand, a majority of women did support Reagan.

JUDY GOLDSMITH, president, National Organization for Women: There was a gender gap in the presidential election. It did not make the decisive difference. It was there.

HUNTER-GAULT [voice-over]: The whys of the failure to generate more support for the Democratic ticket among women will probably be the subject of debate in post-mortems all over the country for some time to come. Women and other analysts at least agree that the problem over Ferraro's finances didn't help.

BELLA ABZUG, former Congresswoman: Right out of the gate I think there was an effort to undermine her. The attack upon her finances, the constant reference to her husband's business, which really was irrelevant.

Mr. SCHNEIDER: I think that the financial problems that she had created the sense that she was picked hastily, that she was in over her head, that she may not have been as really qualified for the job.

HUNTER-GAULT [voice-over]: Jewell McCabe is among those who see another, more fundamental problem.

Ms. McCABE: I think clearly this is a signal to those people that have been fighting to organize and fighting for parity and equity for women that there's a lot of homework that still has to be done.

HUNTER-GAULT [voice-over]: The one thing about which there seems to be little or no debate is the long-term implications of the Ferraro candidacy.

GERALDINE FERRARO, Democratic vice presidential candidate [Election Night]: Campaigns, even if you lose them, do serve a purpose. My candidacy has said the days of discrimination are numbered. American women will never again be second-class citizens.

CAROL BELLAMY, New York City Council President: I was thinking this evening, and I've said this before, that Al Smith was the first Catholic to run for office. He was not successful; he lost. But in a sense he paved the way for a John Kennedy election subsequently, which was successful. Gerry Ferraro, I believe we will see in the future, has paved the way for many people that will come after her.

Mr. SCHNEIDER: I would say that there are two lessons in this experience from 1984. One is, there is no reason why a woman should not be qualified to run for vice president or president. In that sense, the mold has been broken, the precedent has been set. On the hand, I think that it is risky for a candidate to select a woman as a running mate simply because she's a woman.

HUNTER-GAULT [voice-over]: Democratic political consultant Gregg Schneiders thinks that the next beneficiary of Ferraro's historic run may in fact be a Republican.

GREGG SCHNEIDERS, political consultant: I think that the Republicans, if they see a continuing problem with women in the polls between now and then, may be very inclined to try and put a woman on the ticket, and they have several good ones to choose from.

HUNTER-GAULT [voice-over]: Meanwhile, women who supported Ferraro and her promise are figuring out how to deal with what many see as a kind of bittersweet victory.

LETTY COTTON POGREBIN, editor, Ms. Magazine: I think we'll probably need a little while to nurse our wounds. I'm feeling very burned out at the moment. But tomorrow morning or next week we'll have to wake up and decide how we're going to use our energies in the next four years -- pick our issues with great care.

SANDY SILVERMAN, Ferraro campaign: But I think that people are saddened, but we're also very determined that, you know, this is just the beginning.

HUNTER-GAULT: Many of the women we interviewed in the days since the election point out that the results that will give them the full picture of what happened on November 6th are still being analyzed, and it is in those results, particularly in elections at the state level, that they expect to see a more decisive gender gap emerge. Already they are pointing to the Senate races in Iowa and Illinois and the Vermont governor's race where the women's vote was decisive. They believe they'll find more in time. Jim? Pundits Ponder the Election

LEHRER: We end this week of the 1984 election now with three wise people of politics. They're the three people who were at the center of our coverage throughout the campaign. One of them is named Judy Woodruff. She will introduce the other two. Judy?

JUDY WOODRUFF: She said modestly. Jim, the candidates may have gone on vacation, but as you're hinting, our team of Gergen and Baron is always at work for us. That is, Republican David Gergen, former communications director for the Reagan White House now with the American Enterprise Institute, and Democrat Alan Baron, editor and publisher of the biweekly political newsletter, The Baron Report. Gentlemen, you just saw the report on Ferraro and what kind of an effect she had. Was she a plus or a minus for Walter Mondale? Alan?

ALAN BARON: Oh, I think it was a plus, the decision to name her. She turned out to be, I think, a good candidate for vice president.She had some weaknesses, but it was a plus. I happen to think that he might have had a bigger plus if he'd have named Gary Hart, but I think she was a plus.

WOODRUFF: David?

DAVID GERGEN: Well, you know, the report said NBC found that she was a bit of a negative around the country. The CBS analysts have looked at it, and they've decided that she was the factor that carried him over the top in Minnesota. So that the one state that he got he salvaged with Geraldine Ferraro. I think more than any thing else she was a plus for the country. I think both parties are going to more seriously consider women candidates in the future for national office, and I think that's good for everybody.

WOODRUFF. You think that's her legacy?

Mr. GERGEN: I do indeed.

Mr. BARON: Judy, I think that these polls -- I must say there's some questions you just can't get a very good answer to. You go up to someone, they're walking out, and, "Were you more or less likely to vote for Walter Mondale because Gerry Ferraro was vice president?" My guess, if they asked that question to Bella Abzug, she'd say, "Oh, I was more likely," and Bella Abzug was going to vote that way, and Phyllis Schlafly would say, "Oh, I was less likely." And I want to tell you something --

WOODRUFF: So you're saying --

Mr. BARON: -- they could have named anybody vice president and Phyllis Schlafy was going to vote for Reagan and Bellas was going to vote for Mondale --

WOODRUFF: You're saying the minds were made up.

Mr. BARON: -- and therefore the polls, I don't think, mean too much.

WOODRUFF: All right, let's talk about the presidential result. Does Ronald Reagan have a mandate, and if so, what is it for? What is it to do? David?

Mr. GERGEN: I think he absolutely has a mandate in the economic area to continue his economic policies. The people in the country were very clearly for continued cutting in spending and against higher taxes. One of the things that has surprised me so much this week is that I think the White House and the Reagan team, having won the election, is in danger of losing the interpretation, that they are not asserting a mandate.And I think -- and the Democrats, in that vacuum, are asserting there is no mandate. And the Reagan people are going to lose much of the significance of this election, deflate the significance of it, unless they come back and argue, yes, there is something here that is very powerful. There is a powerful message from the country.

WOODRUFF: But isn't that all part of what appears now to be an emerging strategy to work out some sort of compromise with the Democrats on the Hill because they don't have enough support among Republicans?

Mr. GERGEN: Well, of course they want to work out a strategy and work with the Hill; I think that's a good idea. I think they need to rebuild and reestablish the bipartisan spirit that existed in the early part of the administration. But along with that, they need to mobilize public support and grass-roots support for the idea that this President was elected with a huge number of votes -- six million more votes than any American has ever received for president in the United States, an electroal landslide -- and they ought to mobilize that in favor of getting their program through.

Mr. BARON: Well, you know, this morning I think it was, or yesterday, Mr. Rollins, who was his campaigan manager, they said, "What is the mandate?" and he said, "It's a mandate to do two things -- to bring the deficit under control and to bring about arms control negotiations." And I thought that was a nice mandate, but if Jim Johnson -- if Mondale had been elected and they'd asked Johnson, his campaign manager, "Well, what was Mondale's mandate to do?" he would have said precisely those two things. The point is I think they were part of the mandate. I think the mandate was to keep things going about like they are and to keep this economic program going as long as it works.

WOODRUFF: Do you think that --

Mr. BARON: If it doesn't work, get a new program.

WOODRUFF: Do you think that, given the fact the Republicans didn't do as well as, of course, the White House would have liked in these elections, that it makes sense for them to come in with a confrontational attitude toward the Congress, or they ought to be talking compromise?

Mr. BARON: I think he's stressing the very things that he stressed during the campaign. They did make one thing clear at the White House, that they're going to take these minor issues, like abortion, and put them off for awhile and deal on the really important issues like tax reform. And we'll have to wait a few years before we can deal with this "killing of millions of innocent babies." That's -- we're going to have to wait awhile until we can get to these really important things, like adjusting the college loan program.

Mr. BARON: I'm surprised the Republicans are bickering among themselves and pointing fingers at each other for not doing better on the House side. They only got 14 seats. But they ought to be saying," Look, we got 50% of the votes for national candidates, and we only got 42% of the seats in the House. There's something wrong with the apportionment system in this country when we get 50% of the votes --"

Mr. BARON: But, David, it's not proportional representation. You know, Walter Mondale can say, "Look, there's something wrong with this electoral College. I got 40% 41% of the vote for president, and I didn't get 40% of the Electoral votes."

WOODRUFF: You're saying the White House can get what it wants, given the fact that they're not --

Mr. GERGEN: I think that the White House has a stronger case to make than it has been making this week. I think it can assert a mandate and it should assert a mandate.

Mr. BARON: I think it needs a new communications director is what I think.

WOODRUFF: All right, if the Democratic Party decimated? Alan, a quick thought on that.

Mr. BARON: Is the Democratic Party -- it has almost half of the Senate. It has a lot of House members. It has the same number of governors it had in 1960, I noticed; after all, that's two-thirds of the governors. The Democratic Party decimated? No, in fact I think they probably had a little bit of reality therapy, and that's good for people once in awhile.

WOODRUFF: David, any thoughts from you on the Democrats?

Mr. GERGEN: Oh, I think that they've got --

Mr. BARON: They may need a new communications director, too.

Mr. GERGEN: They need a new strategy, Alan.

Mr. BARON: You think so.

Mr. GERGEN: A lot more than just -- yes.

Mr. BARON: The problem is their strategists become analysts and communications directors.

WOODRUFF: Thoughts on the campaign overall?

Mr. GERGEN: Overall? Well, I'd say -- closing thoughts? Well, I would have to say that I think we really ought to join tonight in saluting Alan.I have admired the way he's handled himself here. All this time he's been at this severe disadvantage with the arguments; he's been at this severe disadvantage with the candidate. And there's an old saying in politics that to the victor goes the spoils, but I think we ought to have a new saying; that is, "to the gracious loser goes the cake" [passes candle-lit cake to Mr. Baron] and here's the cake.

Mr. BARON: To the gracious loser. Thank you.

Mr. GERGEN: Alan, you've done well considering what you've had to put up with.

Mr. BARON: Thank you. I'll tell you what.

WOODRUFF: Even though he didn't sign on with Mondale to the end.

Mr. BARON: I think the Democratic Party did very well considering what it had to put up with.

WOODRUFF: You get to blow out the candles. Think you, gentlemen, for being with us --

Mr. GERGEN: Thank you.

WOODRUFF: -- throughout this campaign. Robin?

MacNEIL: In all the analysis of this momentous election week there is one constituency that has not yet been heard from, the nation's political cartoonists. But it's now Friday, and it's their turn. Poking Fun at the Pols

REAGAN AIDE [Bill Day cartoon, The Commercial Appeal]: Those are the political cartoonists, Mr. President.

Pres. REAGAN [Wasserman cartoon, L.A. Times Syndicate]: Folks, allow me to demonstrate my budget-balancer carpet cleaner. First, I pour red ink all over your rug, and then, heh, oh, dear. It doesn't seem to be working.

Mr. FOLKS: That's okay. We'll buy it anyhow.

Mrs. FOLKS: Yes, you explained it so nicely.

Mr. MONDALE [Toles cartoon, The Buffalo News, Universal Press Syndicate]: Looks like four years of fishing, resting and pretty much taking it easy in Minnesota.

Pres. REAGAN: Looks like four years of riding, resting and pretty much taking it easy in California.

OBSERVER: And sawing wood!

Pres. REAGAN [Toles cartoon]: I campaigned on feeling good.

CITIZEN: It made me feel good.

Pres. REAGAN: I campaigned on optimism.

CITIZEN: It made me optimistic.

Pres. REAGAN: I campaigned on flags and balloons and happiness.

CITIZEN: It made me happy.

Pres. REAGAN: And now the American people have given me a mandate.

CITIZEN: Four more years of campaigning!

OBSERVER: "Mandate," as in "blank check."

Presidential AIDE [Oliphant cartoon, Universal Press Syndicate]: Yes, sir. Raise taxes and begin boming in five minutes. Will there be anything else?

CITIZEN: I demand a recount!

POLLSTER [Treuer cartoon, Albuquerque Journal, News America Syndicate]: Pardon me. If the election were held today, who would you vote for?

VOTER: But the election was held today!

POLLSTER: In 1988.Kennedy? Cuomo? Kemp? Bush? Baker? Or . . .?

VOTER: AAAAAIIIIIEEEE!!!

CBS News ANCHOR [Margulies cartoon, Houston Post]: And with 0.000003% of the vote counted, we can now predict the amount of snowfall in the 1996 New Hampshire primary.

New Hampshire VOTER [Jerry Robinson cartoon, Cartoonists and Writers Syndicate]: Do you realize it's only 1,259 days before the next primary?

LEHRER: Again, the major stories of this Friday. Wholesale prices went down last month for the third month in a row, the first time that's happened in 17 years, and that means inflation is doing better than fine.

And Nicaragua took its complaints about the United States to the U.N. Security Council. Finally tonight, now hear this. Secretary of the Navy John Lehman has issued an ALNAV order to all hands to talk differently, to go back to the old salt talk from the current civilian bureaucratic language that had infiltrated the United States Navy. It means, dining facilities are again mess decks and ward rooms; food is no longer cooked in kitchens, they're galleys once more. And corridors are passageways, floors are decks, stairs are ladders, Navy correctional facilities are brigs, and there are no longer any UOPHs -- unaccompanied officer personal housing. They're BOQs -- bachelor officers' quarters. The ALNAV bulletin was silent on whether bars and clubs were to again be called slopshoots.

Good night, Robin.

MacNEIL: Good night, Jim. That's the NewsHour tonight. We'll be back on Monday. Thanks for watching. I'm Robert MacNeil; good night.