The NewsHour with Jim Lehrer

MR. LEHRER: Good evening. I'mJim Lehrer. On the NewsHour tonight, the party chairmen, Barber and Dodd, debate the campaign money issue, Paul Solman explores the income gap in American, two experts explain the Japanese election results, and David Gergen talks about gays in the Christian right. It all follows our summary of the news this Monday. NEWS SUMMARY

MR. LEHRER: Bob Dole and President Clinton both campaigned in the Midwest today. The President spoke about the government's direct student loan program in a speech at Cuyahoga Community College in Ohio. He said he had more plans for improving education.

PRESIDENT CLINTON: I propose to give every family a $1500 tax cut. That's the cost of a typical community college tuition, a dollar for dollar reduction on their tax bill, if they're going to a community college, or another two-year institution. Will you help me do that? [cheers from audience] And I propose to give every family a tax deduction of up to $10,000 a year for the cost of any college tuition, undergraduate, graduate, you name it.

MR. LEHRER: Bob Dole spoke to the governor's economic summit at a heavy engine manufacturing plant in Detroit. He said his 15 percent tax cut plan would spur job growth and balance the budget.

SEN. BOB DOLE: I have a lot of confidence in America's governors. They know what to do. They're here every day. They understand the people. They understand the state better than any bureaucrat, Republican or Democrat, in some agency somewhere in Washington, D.C., so we're going to work on that, along with our economic package. Send more power back to the states, and back to the people, where the people will have an opportunity to participate, not just to keep paying taxes and keep saying yes or keep complaining, where you actually can participate. I'm the most optimistic man in America, and Clinton will be the most surprised man in America on November 6, 1996. Thank you.

MR. LEHRER: Afterwards, Dole began a two-day bus tour of Michigan. We'll have more on the campaign right after this News Summary. The U.S. Supreme Court today rejected a challenge to the gays in the military policy. The "don't ask, don't dell" mandate was intended to let homosexuals serve as long as they kept their sexuality private. Today's case was brought by a former Navy officer who was discharged after notifying his commander he was gay. The high court ruling let stand an appeals court finding that the man's free speech and other rights had not been violated. The Canadian Auto Workers Union and General Motors continued negotiations past their noon deadline today. The president of the CAW said the Toronto talks have produced tremendous progress. Twenty-six thousand workers have been striking for twenty days at General Motors plants across Canada. More than 18,000 other workers at GM plants in the United States and Mexico have also been idled as a result. Japanese Prime Minister Hashimoto worked to build a coalition government today. His Liberal Democratic Party won a near majority in parliamentary elections yesterday, gaining 239 of the 251 seats needed to govern alone. We'll have more on this story later in the program. Heavy rains and flooding hit New England for a third day today. Gov. William Weld declared a state of emergency in Eastern Massachusetts this morning. Thousands of children there and in Maine and New Hampshire got the day off from school because flooding made roadways impassable. Major sections of Boston's subway system were shut down after one underground station was submerged under 20 feet of water. One small dam gave away in Massachusetts, and officials were concerned about another. And that's it for the News Summary tonight. Now it's on to the new fight over campaign finance, the income gap, the Japan elections, and a David Gergen dialogue. FOCUS - UNDER THE INFLUENCE?

MR. LEHRER: We go first tonight to money, the new issue of the 1996 presidential campaign. Margaret Warner has the story.

MS. WARNER: The issue of campaign finance abuses and reform has suddenly emerged as an issue in the presidential campaign. It was triggered last week by press disclosures that the Democratic National Committee had raised hundreds of thousands of dollars from wealthy Indonesian families and an Indonesian conglomerate called the Lippo Group. And earlier the DNC returned a $250,000 contribution improperly donated by a South Korean company. Republicans have demanded an investigation into whether the administration's export and trade policies were manipulated to benefit the foreign contributors. The Democratic National Committee responded to the charges by suspending the DNC official who has raised most of the questioned contributions from Asians and Asian companies, former Commerce Department official John Wong, who once worked for the Lippo Group. But the Democrats have also accused Dole and the Republicans of hypocrisy. They note that the vice chairman of Dole's Finance Committee during the primary season was a non-citizen and they note that other Dole Finance Committee members have run afoul of the law for their fund-raising methods. The dispute has focused renewed attention on the entire phenomenon of so-called "soft money," donations to political parties and House and Senate Committees that aren't limited under federal law. But President Clinton has not spoken on the issue. Yesterday, on NBC's "Meet the Press," White House Chief of Staff Leon Panetta was repeatedly asked why the President hasn't.

SPOKESMAN: Why doesn't the President speak out and condemn what has been illegal fund-raising by the Democratic Party?

LEON PANETTA, White House Chief of Staff: [NBC News - Meet the Press] Well, the reality is that the President has said, look, uh, we are obviously raising millions of dollars, just like the Republicans are raising millions of dollars. Democrats are raising that kind of money. Republicans are raising that kind of money. The reality is that under the rules you can take money from foreign subsidiaries of, of corporations, or domestic United States subsidiaries of foreign corporations. That's, that's legal under the law. About 1 percent of these are called into question. The President has said we are--what we really need to do in order to deal with these kinds of problems--because you can't do a background check on everybody who gives you a contribution, you can't go after everybody's background in terms of determining when you're raising millions of dollars what's involved here. The answer to this ultimately is campaign finance reform.

MS. WARNER: Yesterday, campaigning in New Hampshire, Bob Dole unveiled a campaign finance proposal of his own.

SEN. BOB DOLE: And if you're not eligible to vote in America, you shouldn't contribute to politicians in America. That's No. 1. [applause] No. 2, abolish what they call soft money. No donations from corporations or unions to federal candidates or to parties to influence federal elections. No. 3, no American should be compelled against his will to give up a portion of his weekly paycheck to finance an organization's political agenda. That will happen. And No. 4, this would apply to all of us, curtailthe influence of Political Action Committees, and let the commission determine the best way to limit the effect of PAC's on the political process.

MS. WARNER: Democrats responded by accusing Dole of killing or delaying campaign finance reform legislation several times while he was in the Senate, most recently, they said, this past summer on a bipartisan proposal by Republican Senator John McCain and Democratic Senator Russell Feingold. That bill would sharply limit PAC contributions and soft money donations to political parties. The bill finally died in the Senate two weeks after Dole left.

MS. WARNER: Now the two party chairmen, Haley Barbour, head of the Republican National Committee, and Sen. Christopher Dodd of Connecticut, the co-chairman of the Democrat National Committee. Welcome, gentlemen. Mr. Barbour, what, if anything, illegal have the Democrats done?

HALEY BARBOUR, Chair, Republican National Committee: [Washington, D.C.] Well, it appears that they've not only skirted the law, but they've broken the law by soliciting through a real unheard of major practice of going out and soliciting foreign contributions, but that they have received contributions from a couple who lived in the United States for a brief period of time and gave $427,000, of which nearly $300,000 was given while they were not living in the United States, while they were living in Indonesia. They have had a pattern and practice, Margaret, of using administration officials. Let me just quote David Broder of the "Washington Post," the dean of Washington political journalists. I think when you have the involvement with official appointments to the Commerce Department post, we have meetings with the President, you're dealing with something else. What drives me crazy is that these folks just seem to think, so what? This is the most morally lax standard I have ever seen imposed on an administration by its own people, and they have a practice of raising money that's not legal to accept. We don't--campaign finance reform has nothing to do with this. A lot of this is illegal under the law today if, in fact, it is true this couple contributed hundreds of thousands of dollars when they were not living--and at this Buddhist temple in California, you had people who were given money and then asked to write a check back, that they were not giving their own money--this is against the law today, Margaret.

MS. WARNER: All right. Mr. Dodd, Sen. Dodd, your response on that.

SEN. CHRISTOPHER DODD, Chair, Democratic National Committee: [New York] Well, this--you talk about desperation here, fourteen, fifteen days to go before the election, and Bob Dole has discovered campaign finance reform as an issue. It's estimated by Common Cause that he has raised, aside from running for the presidency, $100 million over his career as United States Senator, been called by Fred Wertheimer, the former head of Common Cause, the single biggest obstacle to campaign finance reform in the last decade, now announcing all of a sudden on this sort of political deathbed conversion that he's all of a sudden for campaign finance reform. Even John McCain, one of his top advisers, offered campaign finance reform in this Congress. Everyone but one Democrat in the Senate supported John McCain's bill. Only about eight Republicans did, and Bob Dole opposed it. We could have had campaign finance reform in this--in this Congress. So let's--let's look through the transparency of this all of a sudden newfound concern about the issues. Secondly, we're looking at a party that has already received $2.4 million in the last year and a half from foreign companies through illegal means, as far as I know.

MS. WARNER: Through legal or illegal?

SEN. DODD: Illegal as far as I know, because if it's a U.S. subsidiary of a foreign corporation, as long as the dollars are coming from U.S. activities, then that's under the present law legal. The Ryadi family, which I presume Haley is talking about, supported Bob Dole financially in his '88 race for the presidency.

MS. WARNER: All right. Senator, let me just ask you--and then I want to turn the tables on the Republicans. Could you answer Mr. Barbour's charges, that, in fact, this one Indonesian couple were not even still U.S. residents when a lot of this money came into your party.

SEN. DODD: Well, let me say first of all, we as a party now have asked the Federal Elections Commission to examine all of this and to do it on an expedited fashion. The Republicans have not made a similar request. So they'll look at all of this and go through each one of these contributions. If any one of them are wrong, the money goes back, we'll do whatever has to be done here. As far as we know--and I'm not an expert in the law--I don't claim to be here, but as far as I know, if a person is a permanent resident of the United States, they pay taxes here, they've achieved that status, then under the law, they can make campaign contributions. The fact that they're not exactly residing at that particular moment they make a contribution, as far as I know, is not illegal. Now, there are lawyers who will argue about this, and you could make a case that you want to change the law, but under the law, the Republicans have received a lot of money under this means, as well as Democrats. It's legal. Now Jack Kemp is arguing with Bob Dole over whether or not they want to change the law to the extent he's recommended.

MS. WARNER: All right. Let me get--let me get Mr. Barbour back in here. Is it possible, Mr. Barbour, that, in fact, all of these different instances were entirely legal?

MR. BARBOUR: Well, it's possible that I'm going to lose 30 pounds between now and Thanksgiving, Margaret, but, uh, but it's highly unlikely. What we have here is a pattern and practice. And in Indonesia, the common practice is they pay off, that this is what they do. And let me just show you what's going on here. You have- -here's a chart. You have the Werthen Bank, which was owned at one point by this family in Indonesia. They give $3 + million in loans to Clinton in 1992, when his campaign is in the, in the very lowest days of Genifer Flowers, draft-dodging charges, lowest point, this, this group comes through with $3 + million. They've contributed over $1 million. They've got this gardener, you know, who contributes four hundred some thousand dollars; at the Buddhist temple, where people take a vow of poverty, they say these people have contributed $5,000 each. That's the quid. What's bad is the quo. The quo is billions, F-16 fighters for Indonesia; the quo is a billion dollars of business contracts for the cronies of all of these people; the quo is the United States turns its back on awful human rights abuses, genocide in East Timor when--

SEN. DODD: Well, Margaret--

MR. BARBOUR: When Bill Clinton was running for President, when Bill Clinton was running for President, he said, George Bush is terrible for not having done something about what the Indonesians were doing for East Timor. Now that all these millions have gone through, Mickey Kantor stops the investigation of human rights abuses in East Timor, which has been taken over, invaded, and captured by Indonesia, and a third of the population, 95 percent Roman Catholic population, has been exterminated--

MS. WARNER: All right.

MR. BARBOUR: --by these people to the point that the Nobel Peace Prize this year was given to people in East Timor for standing up to what the Clinton administration is turning its back on.

MS. WARNER: Okay. Sen. Dodd, are--was there a quo here, as Mr. Barbour puts it?

SEN. DODD: Not at all. In fact, Bob Dole is--when the legislation came up on human rights in Indonesia, Bob Dole voted against it. Russ Feingold offered the amendment. Bob Dole all of a sudden, the Republicans claim--their newfound interest in human rights is rather remarkable, quite stunning, in my view. Here, they received $400,000 from Brown & Williamson Tobacco Company based in London at the very time we're dealing with the tobacco issue, receive as a party major contributions from Japan automobile dealers at the very time we're trying to access those markets with our own automobile producers, to be lectured by Haley Barbour on quid pro quo and political contributions is, is just remarkable to me. I'm willing to--in fact, supported the McCain bill. The President supported John McCain's bill. The President shook Newt Gingrich's hand in New Hampshire on campaign finance reform. The President appointed the commissioners which Newt Gingrich never did to deal with campaign finance reform. This is a desperate campaign, in trouble with 14 days to go, have run out of issues, and so all of a sudden decided this is a newfound issue for them, when frankly their record in this area is abysmal, to put it at best.

MS. WARNER: All right. Mr. Barbour, could you respond to the bill of particulars now about the Republican Party that Sen. Dodd just laid out?

MR. BARBOUR: Well, let me say--

SEN. DODD: And let me add, by the way, when Newt Gingrich in 1990 speaks at GOPAC fund-raisers held at the Saudi Arabian Embassy and the Russian Embassy, I don't recall the Republican Party being outraged over the Speaker or the likely Speaker of the House all of a sudden engaging in that practice.

MS. WARNER: Okay. Let me get Mr. Barbour to respond to those.

MR. BARBOUR: Well, Margaret, your first question was the right question. What is illegal about this? The fact of the matter is, this has nothing to do with campaign finance reform. This is against the law now. This is against the law today. There's no-- there's no need to change the law to make it illegal for foreigners to give in American elections. Yet, the Democratic National Committee through a deputy Democratic finance chairman, who had been at the height of being an insider on trade at the Department of Commerce, they have a program to go out and solicit foreign contributions. They say he's raised $5 million.

MS. WARNER: All right. But, Mr. Barbour--

SEN. DODD: Margaret, if I could--

MR. BARBOUR: Mrs. Ryadi--

SEN. DODD: --just say right here--

MS. WARNER: Gentlemen, gentlemen.

SEN. DODD: --here you've got Mr. Fireman, who's paying $6 million in fines for laundering money in Hong Kong.

MS. WARNER: Senator, we're just confusing our viewers. We're confusing our viewers. They don't know who Mr. Fireman is. Let me get Mr. Barbour.

SEN. DODD: Well, tell 'em who he is.

MS. WARNER: Would you please respond, just as I asked Sen. Dodd to, to the charges he made about the Republican Party, not by saying the Democrats have done the same thing, but what about the charges that he just made, that the Republicans have also raised a lot of money from foreign-related sources?

MR. BARBOUR: The Republicans have not raised money from foreign corporations that's against the law. Mrs. Ryadi, the family that gave over $1 million through their business interest to Bill Clinton, bought a $1,000 ticket to a Dole fund-raiser nine years ago. We reported it. It was perfectly legal. They were living in the country, and they want--you know, Margaret, you made the point, Chris is trying to confuse your viewers. They want to get off the point here. The Republicans didn't come up with this story. The "New York Times" came up with this story, the "Wall Street Journal" came up with this story. We didn't know anything about it. We have learned since then that our Republican Governors Association sold a table at a dinner a couple of years ago to a Canadian company. When it came to their attention, the Republican governors gave it back, to which I say, if the Democratic governors did what our governors do and abided by the federal law, we'd know if they'd done that or not. Do I think it's wrong if one guy slips through, or five guys slip through in ten years? But this is a pattern where they have a practice of soliciting these contributions, and the people giving the money have good reason to believe they're getting something in return: F-16's, East Timor, business deals in China. And this is the way they do business in Indonesia. We want to make sure it never becomes the way we do business in the United States.

MS. WARNER: All right. Sen. Dodd, do you want to respond to that?

SEN. DODD: Well, again, I mean, it's here. Why doesn't the Republican Party do what we've done? We've asked the FEC, the Federal Elections Commission, the agency that's responsible for monitoring campaign financing, to open up its books, as we have, and go through them. The allegations affect 1 percent or less of all the campaign contributions. If they find additional ones, if there are problems here, then it certainly ought to be brought to the people's attention, and deal with it accordingly. Haley's acting as if he's judge and jury on these matters. The allegations have been made. No one has proved it. The only proven allegation involves the vice finance chairman of the Republican National Committee, Mr. Fireman, who solicited and laundered $69,000 from Hong Kong, for which he has paid a $6 million fine and is likely going to do six months in jail. Now that's the vice chairman of the Dole presidential race. No allegations like that have been proven against anyone on the Democratic side. We have returned the dollars that we've discovered that they were improperly collected, and we've invited the Federal Elections Commission to go through all of our books. I would like to know whether or not Haley was willing to subject the entire, the contributions to the Republican National Committee through similar scrutiny by the FEC, so both sides will be subjected to that kind of investigation.

MR. BARBOUR: Well, as Chris--

MS. WARNER: What about that, Mr. Barbour?

MR. BARBOUR: Well, as Chris knows, Margaret, we file our report with the FEC every month.

SEN. DODD: Well, we do as well.

MR. BARBOUR: And we open up all of our contributions. The FEC is not only welcome, they perpetually, continuously audit our books. We file with them like the Republican Governors Association, not required by law; the Democrat governors refuse to do that. But, look., Chris Dodd and I are friends, and he has made and earned, in my opinion, a good reputation in this city and in this country as an honorable person who I think is above a lot of what's been going on. ButI'll tell you, I wish Chris would make this John Wang and these people, make 'em come forward and come clean. There's not anybody who works here, Margaret, that we won't make available. But they've got somebody that they're hiding because he's been the one that's running this. And I wish that the Democrats, I wish my friend, Chris Dodd, would say we're going to cut you loose, John; now go out there and tell the truth. That's all people have a right to expect.

MS. WARNER: Mr. Dodd, you suggested yesterday that John Wang, who is the DNC official who raised a lot of this money from Asian sources, would be available to reporters, but then there seemed to be a change in that. Is he going to be able to answer questions?

SEN. DODD: I'd say first of all, Margaret, I found it convenient Haley did not really answer the question I raised with him here. Of course, the FEC goes over books. We have asked the FEC to do an expedited examination of these alleged contributions. All I'm suggesting is that the Republicans submit themselves to the similar expedited investigation that goes beyond the reporting requirements every three or four or five months, the next one coming after the election, so it'll be of little use to anybody if it occurs in December or January. Putting that issue aside, and Haley's reluctance to respond, with Mr. Wang, I've said, look, if he wants to talk to the press, that's his business. Our policy, as it is at the Republican National Committee, is to make people like myself and our press people available to respond to questions.

MS. WARNER: Okay.

SEN. DODD: We do not, as a practice, have everyone in the Democratic National Committee staff, nor the Republican National Committee staff, uh, subject themselves to press conferences. Mr. Wang has not been relieved of his duties. He's still on the payroll of the Democrat National Committee. He's now focusing his attention on the expedited FEC investigation, so that they can ask him questions, and he will be available to all of them at their request at a moment's notice. But if he wants to talk to the press, that's his business.

MS. WARNER: All right.

SEN. DODD: Don't have a gag rule on him.

MS. WARNER: Before we go, let me ask you each, very briefly, Mr. Barbour, do you think this issue is helping Bob Dole?

MR. BARBOUR: Well, it's bad for the country. I don't know whose vote it's going to change. It's got to be depressing to people to see this kind of stuff going on in American politics, with it obviously being supported and promoted by the President of the United States.

MS. WARNER: All right. Let me get Sen. Dodd. Do you think it's having an impact on the presidential race?

SEN. DODD: I don't know. But I would tell you, I always find it disturbing, that here we are days away from an election, and all this great interest that he had during the year when we should be dealing with these issues, the very same people who call for these matters, where were they when they had an opportunity to do something about it. That's what I find frustrating.

MS. WARNER: All right.

SEN. DODD: And many of us have wanted to see campaign finance reform for years, but when the votes are there, and we ask for their support, they don't seem to show up.

MS. WARNER: All right. Thank you both.

MR. BARBOUR: Margaret, can I just--one point--

MS. WARNER: No.

MR. BARBOUR: --so it won't be an issue. We'd love to have the FEC come over here for an expedited or any other kind of audit.

SEN. DODD: Good.

MS. WARNER: Okay. Great, gentlemen. We'll leave it there. Thank you.

MR. LEHRER: Still to come on the NewsHour tonight, the income gap issue, the Japanese elections, and a David Gergen dialogue. FOCUS - CAMPAIGN '96 - STRETCHING THE NUMBERS

MR. LEHRER: Now to another type of campaign economics, how to solve the wage gap. Our economics correspondent, Paul Solman, of WGBH-Boston, reports.

PAUL SOLMAN: Economic inequality in America. In the past, we've used various graphic devices to depict it. Recently, we asked a glass artist, Professor Tom Kreager of Hastings College in Nebraska, to help us out with hot new visual metaphor for inequality. Now, while he's working on it, let's hear from the Republicans, who've been trying to generate some heat of their own on this issue.

SEN. BOB DOLE: What Clintonomics means is that the rich are getting richer, while the middle class gets left behind.

JACK KEMP: The affluent are doing very well in America; the haves, the have-nots, and the poor are being left behind.

MR. SOLMAN: Now, as you may recall, Democratic candidates have been the ones complaining about economic inequality for years.

BILL CLINTON: Most Americans in this country and most people in this crowd tonight are working harder for lower wages than they were making 10 years ago, is that right? [applause]

MICHAEL DUKAKIS: High paying jobs being replaced by low wage jobs. Average weekly ages down over the past eight years.

MR. SOLMAN: In the past, we've put inequality and income distribution in historical context, suggesting graphically that in ancient economies wealth and income were distributed very unequally, a broad base of workers supporting the wealthier members of society above them. The miracle of America, as we depicted it, especially after World War II, was far more equality, a diamond-shaped economy, with most folks in the bulging middle class. But the shape of America's income distribution in recent years, it turns out, is kind of like a bud vase. So let's call it the bud vase economy. Some people at the very bottom, the majority somewhat above, at the top of the distribution, people at ever higher levels of income pulling further and further and further away from their fellow Americans. MIT Economist Frank Levy is an expert in inequality.

FRANK LEVY, MIT: The bud vase is a reasonable picture because what you're getting is really the top of the distribution is stretching out, and that is the thing that you see most in the numbers. If you compare 1973 say with today, you look at the middle of the distribution, the average family's income has only gone up a little bit, from about $39,000 to about $41,000, adjusted for inflation.

MR. SOLMAN: But, says Levy, the distance between the top and the bottom has widened.

FRANK LEVY: And so today if you look at the bottom fifth of families, instead of making $11,500 on average make about $10,700, but if you look at the top of fifth of families on average, instead of making $85,000, they make about $120,000. So you get a bottom falling a little, the middle about the same, and then that top kind of stretching out, stretching out.

MR. SOLMAN: Now, what was traumatic about inequality's upturn around 1973 was its subversion of the American dream--economic liberty and justice for all. And, in fact, we ran into the problem just last week in New York, when we landed at La Guardia, where private car services now seem to outnumber the more proletarian taxi cabs.

CAB DRIVER: Those limousine guys, they took, I would say, half the business.

MR. SOLMAN: As a result, tax driver income has for years been heading in only one direction.

CAB DRIVER: Down, down, down, down, down.

MR. SOLMAN: Do their fares now make more money relative to the cab driver than they used to?

CAB DRIVER: Yes, yes. I would say yes. The driver, he's making less now than he did a year ago, two years ago, three years ago, making less.

MR. SOLMAN: Okay. Why couldn't a guy like this simply get a better job? Well, in the mid 70's, when he started driving, two basic trends started working against him. First, reasonably high- paying jobs became more sophisticated, thus demanding more education than ever. Those with less education earned less and less. A second trend, a wave of low-skilled immigrants competed for the less-sophisticated jobs, driving their wages further down, as did globalization, more competition from cheap labor abroad. Further pushing down low and middle income wages, women, who entered the work force in record numbers, typically at rather unskilled levels. All this has been widely reported, but one more crucial factor is rarely talked about--the good old baby boom, whose myriad members hit the job market at roughly the same time, thus adding to inequality, according to economic historian Jeff Williamson, age 61.

JEFF WILLIAMSON, Harvard: One of the reasons why we observe inequality is that older people make more than younger people, so there's a gap simply associated with age. If you generate a glut amongst the young, they tend--the job opportunities and the wages for the young diminish, and for those of us like me, who were born in the middle of the Great Depression, we're scarce, and we're scarce, so we get relatively high income.

MR. SOLMAN: In other words, people Jeff Williamson's age moved up the job ladder; they didn't face as much competition as the baby boomers subsequently have.

MR. SOLMAN: So you mean when you and I--and I'm a year ahead of the baby boom--are entering our peak earning years, there are just fewer of us so we can demand more income.

JEFF WILLIAMSON: Absolutely.

MR. SOLMAN: You mean--but so tenured professors or TV commentators, I mean, there's just--JEFF WILLIAMSON: Absolutely.

MR. SOLMAN: There's fewer of us.

JEFF WILLIAMSON: Oh, yeah. It's much easier for you and I to get tenure, you see, than it is for our children.

MR. SOLMAN: Is that right?

JEFF WILLIAMSON: Yeah, that's right. Well, I got mine, you know, back in the 1960's, when it was very easy. There was an enormous demand for, for professors to teach the baby boomers, and so I got tenure very easily at age 26.

MR. SOLMAN: You got tenure at age 26?

JEFF WILLIAMSON: Yeah, tenure at age 26, yeah.

MR. SOLMAN: Today that would be virtually impossible, wouldn't it?

JEFF WILLIAMSON: You'd have to be a lot smarter.

MR. SOLMAN: In economic terms then, inequality has been caused by greater demand for more educated, sophisticated workers, drawing them into the top of the income distribution and a greater supply, not only of less educated, less sophisticated workers but also baby boomers at various skill levels clustering them all nearer the bottom. So both education and age have contributed to inequality, which leads us to one final rather difficult question, what can would-be Presidents do about it? Well, unable to affect the increasing sophistication of work or fluctuating birth rates, a key solution to the inequality problem over which the current candidates differ is education, a specialty, as it happens, of Frank Levy's.

FRANK LEVY: The candidates have to start making parents focus on not just what's going on in school right now, but what's going to happen to their kids when they hit the labor market and to translate that into raising the kinds of skill teaching that their kids get right now.

MR. SOLMAN: Well, but--when, I mean, Clinton talks about building a bridge to the 21st century and Internet hookup in every school and so forth, I mean, it would at least on the surface appear that he's addressing just what you're talking about.

FRANK LEVY: Those are really, to my mind, those are really add- ons. And the things that you need to start with are much higher requirements for math and for reading and for writing and for making oral presentations and for sort of being able to do written reports, the kinds of things you need to get a decent job today, and the kinds most high school kids don't get.

MR. SOLMAN: Bob Dole, for his part, insists that vouchers, allowing for complete school choice and thus competition, will make education more responsive to the job market.

SEN. BOB DOLE: Let's give low-income parents the same right that people of power and prestige have in America and let them go to better schools.

MR. SOLMAN: But do parents actually know how to pick the better schools, those that will best prepare their kids for the job market? They more often respond to obvious achievements like cleanliness, discipline, enthusiasm, according to Frank Levy.

FRANK LEVY: All of these things are important but none of them really speak to this question about what are you teaching vis-a- vis what the economy demands.

MR. SOLMAN: But the real cure for inequality, according to the Dole-Kemp campaign, is renewed economic growth.

JACK KEMP: We should double the size of the American economy. This means more jobs, more wealth, more income, and more capital, particularly for our nation's poor and those left behind.

MR. SOLMAN: Bill Clinton, meanwhile, is saying that under his watch, the income gap has at long last begun to narrow.

PRESIDENT CLINTON: We have the biggest drop in income inequality in 27 years in 1995, the average family's income has gone up over $1600 just since our economic plan passed.

MR. SOLMAN: Frank Levy, however, is skeptical.

FRANK LEVY: All the good studies suggest that inequality is about the same, or maybe a little worse than 20 years ago. There's no evidence it's any better.

MR. SOLMAN: There certainly wasn't any evidence at La Guardia last week. Back in 1970, when I drove a cab to make a living, I split my take with the owner, and cleared, adjusted for inflation, more than $100 a day. Today, a driver pays a daily fee to lease the cab and at the end of the day--

TAXI CAB DRIVER: Maybe I make $150, pay $90, $20-$25 gas, $15 eat--what do I make--$30, something like that--nothing.

MR. SOLMAN: Now, as we said earlier, the reason for lower taxi wages is more competition from limos and more immigrants. Drivers lease their cabs from those who own medallions, official licenses to operate taxis in New York, and since so many immigrants are scrambling for low-skilled jobs, they have bid up the price of the daily taxi lease, benefitting the owners at the drivers' expense.

MR. SOLMAN: How can they get away with raising the price? Cause you're willing to pay for it?

SECOND CAB DRIVER: A lot of people do it. Got to work. [laughing]

CAB DRIVER: Same story.

MR. SOLMAN: Got to work?

CAB DRIVER: Have to work.

SECOND CAB DRIVER: If you don't work, nobody is gonna be on the street.

MR. SOLMAN: Again, in economic terms, there's simply been more demand for jobs at the bottom of the bud vase. As a result, owners have moved up the neck, while drivers have moved down, unless, of course, it happens to be a pre-baby boom driver who bought a medallion before inequality took off. And we met one who, like Prof. Williamson and myself, was at the right age at the right time, and got the equivalent of taxi tenure.

MR. SOLMAN: You bought your cab--your medallion when?

UNIDENTIFIED CAB DRIVER: '61.

MR. SOLMAN: And how much did it cost you?

UNIDENTIFIED CAB DRIVER: $20,000.

MR. SOLMAN: And how much is it worth today?

UNIDENTIFIED CAB DRIVER: $175,000.

MR. SOLMAN: So you'll do pretty well when you sell it?

UNIDENTIFIED CAB DRIVER: Yeah. That's true. But out of all those years I should have something. You know what I mean.

MR. SOLMAN: Another person who, like the rest of us, has been an inadvertent part of the economic inequality story of recent years. FOCUS - STAYING POWER

MR. LEHRER: Now to the elections in Japan and to Charles Krause.

MR. KRAUSE: Yesterday's vote has already produced one historic result, the lowest turnout for Japanese elections since World War II. Fewer than 60 percent of the country's 98 million registered voters went to the polls. The outcome became clear last night, the most seats in Japans lower house of Parliament, but not a full majority, were won by the Liberal Democratic Party led by the incumbent prime minister, Ryutaro Hashimoto. The Liberal Democrats have governed Japan through much of their post-war history but were swept out of office in 1993 in an anti-government, pro-reform vote. The Liberal Democrats have been fighting to regain their old dominance ever since. Their leader, Prime Minister Hashimoto, is best known in the United States from his days as Japan's combative trade minister when he was a vigorous negotiator with American officials. But on defense issues, Hashimoto is considered more friendly, supporting the U.S.-Japan Security Treaty, which has become increasingly controversial in Japan. For more on the election results, with us tonight is Ayako Doi, the editor of Japan Digest, a daily electronic publication about Japan, and Mike Mochizuki, a senior fellow at the Brookings Institution, specializing in Japanese domestic politics and foreign policy. Thank you both for joining us. Ms. Doi, let me begin with you. Many Japanese did not vote in this election but for those who did, what were they voting for?

AYAKO DOI, Japan Digest: I think what happened was that mostly the people who wanted status quo came out to vote, and those who disagree just didn't bother because there's a pretty low hope in what the politics can achieve these days among the Japanese public.

MR. KRAUSE: Let me turn to you. Were there issues though? What were the candidates trying to say to the people? How were they trying to convince them to vote for them?

MIKE MOCHIZUKI, Brookings Institution: Well, one party, the New Frontier Party, was arguing for a major tax cut to get the economy going. Another party, the Democratic Party, a new party, was arguing for a drastic overhaul of the bureaucratic system. But, unfortunately, the voters were very confused because it seemed that all of the major political parties were arguing for some kind of administrative reform, but the voters were cynical that none of these parties really deliver on that reform.

MR. KRAUSE: So why then, in effect, Ms. Doi, did they turn to the Liberal Democrats, to the party they knew best?

MS. DOI: Well, it's economically difficult time in Japan. They are just trying to come out of a long recession that lasted more than four years. They're not sure whether they're out yet. Vote for the devil you know kind mentality worked for the LDP, I think, and also, um, all the other parties didn't, um, present any good alternative in terms of economic management, and one issue that didn't come out in the election campaign was foreign policy, and that's where there will be a real debate, a real diversity in opinion, but among the same parties and coalitions, themselves, and then they may break up if they start talking about foreign policy, and that's why we didn't hear anything about it.

MR. KRAUSE: We'll come back to foreign policy in a moment, but let me ask Mr. Mochizuki, what, um--the Liberal Democrats governed Japan for much of the post-war period. They lost in '93. Is this a return now to a period where there is really one governing party in Japan?

MR. MOCHIZUKI: Well, first of all, I don't believe this election is a stunning victory for the Liberal Democratic Party. The Liberal Democratic Party only got 38 percent of the vote, so many more parties that were against the policies of the LDP did better as a whole. So I think it's unlikely that the Liberal Democratic Party is going to be able to go back and kind of be relaxed. They're going to have to continue to form a coalition with some of the other parties. And so I think Japan will move very slowly at a glacial pace towards some kind of change, but this really is not a vote of confidence for the Liberal Democrats.

MR. KRAUSE: Ms. Doi, let me ask you. Even though the Liberal Democrats won more seats in the Lower House, they still have to form a coalition. They didn't get a majority. Is there any doubt in your mind--do you think that the prime minister will put together that coalition and continue in his job?

MS. DOI: Well, the question is how large a majority he can get. He can continue with old coalition that existed before the election with Socialist Party and a little party called Saki Yagi.

MR. KRAUSE: Which means--tell me what that means.

MS. DOI: Something like Hapinger.

MR. KRAUSE: It's a kind of reform party.

MS. DOI: Reform party, but they are reduced to two seats now in the Lower House. Uh, so they are not going to have much say in anything, and Socialist Party, which now calls themselves Social Democrat Party, um, made a big compromise in their policy when they came into the government two years ago. Now, their new leader says that they want to go back to their originality, which is the sort of pacifist leftist stance, and so it will be pretty difficult politically, uh, policy-wise, to be in the same coalition, um--all the Japanese leaders are now talking about, you know, what coalition, how they can put together their government, and then so policy-wise, it depends very much on what kind of coalition he can put together.

MR. KRAUSE: But the likelihood is that the Liberal Democrats will form the next government with one of these parties as--

MS. DOI: Right. There's no question that the Liberal Democrats won't be in the government. They will be.

MR. KRAUSE: Okay. Now, Mr. Mochizuki, if we go back three years, there was a stunning defeat for the Liberal Democrats, and there seemed to be a mood in Japan for reform. There was corruption; there was scandal. There were a whole lot of things that came together. People voted out the Liberal Democrats. Now, it seems that they've voted them back in again. Is this a defeat for the reformers, and, if so, what does that mean?

MR. MOCHIZUKI: Well, I always felt that there really wasn't much of a reform movement in Japan. There were a lot of Japanese who were fed up with the corrupt nature of Japanese politics, but they justwanted to clean up politics, not to dramatically change it. Over the last three years, the only big reform that has taken place is electrical system, changing the electrical system, and that hasn't drummed up much excitement among the Japanese population. So I think what's going to happen is that rather than a major reform process, Japan will go back to its old ways of incremental adaptation to changing the circumstances. It's really going to be the politics of inertia.

MR. KRAUSE: The politics of inertia. Let's turn for a minute to U.S.-Japanese trade relations. Is it going to be the politics of inertia there too?

MS. DOI: I think so. There will be trade frictions, you know, between the two large economic powers like this--bound to be--but as far as the Japanese are concerned, trade is not in the top of their foreign policy agenda; security is. And, um, they--I guess some Americans are too--somewhat tired of sort of endless bickering over, um, trade negotiations, and um, I think the direction that it's going to is that more of the trade problems will be handled in a multilateral setting, rather than bilateral, because we've seen how bilateral negotiation can sort of create bitterness on both sides.

MR. KRAUSE: Okay. I'm afraid we've run out of time, and we'll have to leave it there. Thank you both for joining us. DIALOGUE

MR. LEHRER: Finally tonight, a Gergen dialogue, David Gergen, editor at large of "U.S. News & World Report," engages Chris Bull, co-author of "Perfect Enemies: The Religious Right, the Gay Movement, and the Politics of the 1990's."

MR. GERGEN: Chris, in your new book with John Gallagher, you describe an acrimonious cultural war between the religious right and the gay movement that extends back a quarter of a century. Now, I could understand why you might call these two forces the religious right and the gay movement bitter enemies. I could even understand why you might call them mortal enemies but why have you called them perfect enemies?

CHRIS BULL, Co-Author, "Perfect Enemies": Because they actually, surprisingly enough, need each other in order to propel their own movement. For religious conservatives, for example, for years they've used the threat that they supposedly posed to American families, American society as a way of raising money. It's built into the structure of the debate. Gay activists often defend themselves by doing exactly the same things, playing on the threat, the demonizing of the religious right in order to raise its own money, therefore, they've simultaneously burst upon the politician scene through opposing the other, which is--there's a big problem in that, which essentially it's not a positive vision of the values they support and their role in American society.

MR. GERGEN: And by feeding on each other, you say they've made this possibly the most divisive issue, political issue of the 1990's.

CHRIS BULL: Yeah. If you look at the rhetoric that often doesn't make it into say a presidential campaign, especially on a local level, anti-gay initiatives say in Oregon, Colorado, throughout the West, there's been a number of them, it's some of the ugliest rhetoric we've ever seen in American politics. You know, gays are accused of pedophilia, of bestiality, of being serial murderers, canards across the board. Um, and gay activists often haven't responded very well to those kind of attacks. They, again, will focus on the extremes of the religious right, rather than the kind of the middle, which often wouldn't support the leadership's attacks on gays and lesbians, therefore, Americans are left in the middle, watching the shouting match with bewilderment--

MR. GERGEN: Right.

CHRIS BULL: --having no idea where to go.

MR. GERGEN: Yeah. They really depict the gays--depict the religious right as neo-fascists.

CHRIS BULL: Yeah. They throw around words like Nazis. They've had a tendency at times to invade the sanctity of churches. At the St. Patrick's Cathedral in 1979, they actually went inside Mass on Sunday and desecrated the host. They shouted from the pews, and, you know, it's understandable the anger that gay activists might have at seeing themselves demonized regularly by people who call themselves religious leaders, but to respond by mocking religion, by mocking people of faith, um, is not the answer. It simply drives the rank and file of the religious right away from the gay movement even further.

MR. GERGEN: Now, in your depiction, you describe the religious right as much more successful than the gay movement in many ways. It's out-organized, it's out-mobilized, it's better at raising money, and it's turned itself into the most--and the Christian Coalition is now, as you describe it, the most powerful special interest group in the country. Is that essentially--and why have they been so much more successful than the gay movement?

CHRIS BULL: Because they have a long-term strategy. They've used anti-gay campaigns in various states as building blocks for further campaign. They'll take a state initiative, use it to register a number of voters, and then turn that into a national campaign, or gay activists have a tendency to set up a battle, say take the gays in the military debate, um, see it as a one shot deal, and then-- when they lose or if they win, they fold up shop and go home, when really that debate should be the starting point for what will be a long debate about, um, whether gays and lesbians should be allowed to serve equally in the military.

MR. GERGEN: How do they develop a strategy of their own then?

CHRIS BULL: They need to do essentially what Pat Robertson did quite brilliantly in 1988 when he ran his presidential campaign. It was--he had little chance of winning, but he developed a huge mailing list which allowed him to create the Christian Coalition. I think that the activists need to do the same thing, building from the--you know, the key to the whole thing is the grassroots. It's a grassroots level, bringing in new voters, bringing in support, and then on the national level devising a way in which you can reach the broad, you know, majority of Americans in a way that they can understand the role of gay people in American society, instead of just focusing on the extremes of the religious right.

MR. GERGEN: The irony that I find in the book, you describe a religious right that has been much more successful at organizing the grassroots, running these campaigns, than the gay community and yet, at the same time, you write, "It is impossible to overestimate the enormity of the strides that gays and lesbians have made toward acceptance over the past decade." If they're not doing well in these campaigns, why have they made so many forward strides?

CHRIS BULL: They've done extremely well in the cultural arena, in the entertainment industry, in the art world, and, I mean, you can see the acceptance of gays and lesbians on, you know, television sitcoms, which are viewed into--broadcast into every household in America, and that's where their strength has been. Americans understand gay people in a way that they never have before, but in the political arena because of the disenfranchisement, because of the embarrassment with which most Americans see gays and lesbians, they haven't been nearly as successful at organizing political strategies, at organizing political campaigns. I mean, Barney Frank complained incessantly during the gays in the military debate that gay people are not good at writing letters, they're not good at getting out the vote, they're not good at putting pressure, at using the system to put pressure for their own goals.

MR. GERGEN: I've wondered, in fact, whether Americans are not paying more attention to the questions of discrimination against gays, you know, come more and more to the view, let's not discriminate.

CHRIS BULL: Mm-hmm. I mean, certainly the media is more likely to pick up on incendiary clashes between the two, and they go up against each other at St. Patrick's Cathedral or whatever the anti- gay initiative is. It's the shouting matches that are appealing many times, and the problem with that is that you don't go beyond that to understand the kind of the intersection of sexuality and religion in American society and how do we deal with these competing claims in a really civil and productive way, how do we- -how are we able to get across to most Americans what gay people really are?

MR. GERGEN: Right. Let me ask you this. You say there in your book that there is no unified agenda in the gay community but there are central aims. And then you make a distinction, an interesting distinction between the question of whether Americans have tolerance for gays and non-discrimination with regard to housing, public accommodations, and jobs, which you think is very necessary, versus approval of gay behavior over homosexuality, and that approval is too much to ask. It may be admirable but it's too much to ask of society. Is that a fair depiction of your views?

CHRIS BULL: Yeah. There are a number of Americans who are always going to consider homosexuality a sin, based on their interpretation of the Bible. There's nothing gay activists can really, you know, they can argue with them until they're blue in the face, but they're not going to change their mind by and large. That doesn't mean that they can't convince those same people that even if they consider homosexuality a sin, gay people deserve an equal place in American society, that they should be--they should lead lives free from discrimination, harassment, and violence, um, which is not unfortunately usually the case, or often the case. There are a number of religious conservatives who with genuine conservative credentials, people like Tony Campolo, in Pennsylvania, who support gay rights. They support gays in the military. Some even support same-sex marriage. It's--it's--but the problem is they get caught up in the whole idea of sin. Gay activists get caught up in the idea of sin and fail to focus on, on the--kind of the more secular arguments that we can all agree upon.

MR. GERGEN: Final question. Brief response, if you can. How do the religious right and the gay community bring this cultural war to an end that ends--that's honorable to both sides?

CHRIS BULL: Um, it's very difficult, I think, but I think there are signs that things are changing as gay people have come out in every institution in American life, from the family to the church, it becomes harder to demonize, um, gay people out of existence, as- -and to the same regard, it's much harder for, for gay people to treat religious conservatives--conservatives with some kind of alliance if they're in constant communication with them. I mean, the both sides are kind of moving together, being forced together, um, through the maturity of both movements, and I think both are realizing that there's no honor in winning a culture war but losing the hearts and minds of a nation.

MR. GERGEN: Thank you very much.

CHRIS BULL: Thank you. RECAP

MR. LEHRER: Again, the major stories of this Monday, President Clinton and Bob Dole campaigned in the Midwest. The President said he would improve access to higher education, Dole promoted his tax cut and economic plan. Excuse me. And the Canadian auto workers passed a self-imposed deadline for reaching a labor agreement with General Motors. The two sides agreed to keep talking. We'll see you online and again here tomorrow night. I'm Jim Lehrer. Thank you and good night.