The MacNeil/Lehrer NewsHour

Good evening, I'm Jim Lara in Washington. And I'm Margaret Warner in New York. After the new summary tonight, we look first at the political impact of a new cost assessment of the Clinton health care plan. Then a report on the insurance industry's leading Capitol Hill lobbyist. And finally, Connor Cruz-O'Brien talks about nationalism with Charlene Hunter-Gault. New York life is proud to provide funding for the McNeil-Lera news hour. Yet another example of New York life's wise investment philosophy. Funding has also been provided by PepsiCo. And by the Archer Daniels Midland Company, ADM supermarket to the world. And by the corporation for public broadcasting, and by the annual financial support from viewers like you.

The Congressional Budget Office dealt a blow to the Clinton health care reform plan today. The respected nonpartisan agency said the plan will increase the federal deficit by $70 billion over the first six years, not cut it by $58 billion as the White House has maintained. The CBO did forecast that the Clinton plan would start saving the country money after the year 2000. But in another setback for the White House, the CBO said mandated insurance premiums should be counted as part of the federal budget. Earlier in the day, the president made a pitch for his health care plan to a group of auto workers. At a General Motors plant in Shreveport, Louisiana, he talked about who will pick up the tab. There are some tough choices. If you have 39 million people without any health insurance, and you're going to require people who are working, who have no health insurance, and their businesses to pay, well, they're going to be paying something, they weren't paying. And then if you have to find a way to cover the people who aren't working, but who aren't pouring out to be on Medicaid, we have to find some money for that.

So it's not easy. How do we propose to pay for it? We believe the fairest way is to ask every employer and every employee without health insurance to make some contribution. We think that's fair. Later in the day, the president dismissed the CBO report as a, quote, Washington policy won't deal. He said, no serious person in the real world will worry about it. We'll look at the political fallout from the CBO assessment right after the news summary, Jim. The United States will outline a plan for Bosnia at a NATO meeting in Brussels tomorrow. White House spokeswoman D.D. Meyer said it will include, more U.S. involvement in peace talks and will more precisely spell out the NATO air strike threat. The plan was prompted by the killing of 68 civilians in a weekend mortar attack on Sarajevo's main market. Joint Chief Chairman John Shalekash-Bili once said, air strikes would have limited effectiveness. At a Capitol hearing, Capitol Hill hearing today, he was asked whether he still thought so.

My statement, then, that it is its effectiveness is considerably limited, still holds. I don't walk away from the statement, nor do I walk away from the statement that was that air power alone cannot bomb someone into a peace treaty. I don't disagree with that at all, and I know I've said it, and I stand by it. I think the issue, however, Senator McCain, that is being debated here in the next day or two, is whether you can use limited air power, not to stop, but to help reduce the chance of a tragedy that occurred in Sarajevo the other day. Other NATO allies also discussed taking a tougher line on Bosnia today while Russia cautioned against it.

Well, we have more, in this report, narrated by Vera Frankl, worldwide television news. Stung into action by the latest horrors in Bosnia, Britain has called for immediate pressure on the Serbs to end the siege of Sarajevo. That could include air strikes, but Prime Minister John Major said the objectives must be clear. But I do think the United Nations may need to use force for specific purposes to carry out its mandate and to protect its own people in Bosnia. It may need tactical air support from NATO. We have always been prepared to see air power used for these purposes, provided the commanders judge it appropriate. And the West is increasingly at odds with Russia, which has always been an ally of Serbia. A Kremlin spokesman condemned the UN Secretary-General for giving NATO a mandate to launch air strikes. Russia could force the issue back to the Security Council and use its veto. Meanwhile international pressure seems to have had some effect. The leader of the Bosnian Croats Marte Boban has resigned until further notice.

He gave no reason when he announced his decision, but it appears the move was to appease his political backers in Croatia who have been threatened with international sanctions. The Serbs shelling of the Bosnian capital dropped dramatically today. The UN observers had only 34 rounds fell on Sarajevo in the past 24 hours, a fraction of that on a normal day. The productivity of American workers increased sharply in the last quarter of last year at an annual rate of 4.2 percent. With the Labor Department reports that the increase for 1983 as a whole was only 1.6 percent because of declines in the first two quarters. A one-day strike against the United Parcel Service is over. The Teamsters Union called the walkout yesterday to protest a UPS plan to hike its maximum package weight from 70 to 150 pounds. Under the settlement no Teamster will have to lift any package over 70 pounds without help from another employee. A Navy judge dismissed tail hook charges against three naval aviators today. He said he did so because Chief of Naval Operations Admiral Frank Kelso manipulated the

tail hook investigation to cover up his own involvement. The judge concluded Kelso witnessed sexual misconduct while at the 1991 convention of Navy and Marine aviators in Las Vegas. Kelso has denied that. Los Angeles residents are trying to contend with yet another natural disaster today, this time mudslides. Winter storms sent mud cascading downhill sides, closing the Pacific Coast Highway, and inundating many ocean side homes below. The worst damage came in areas hard hit by last November's wildfires like Malibu. The denuded hillsides couldn't hold against the torrent of heavy rain. No injuries or deaths have been reported. Heavy snow is the culprit elsewhere in the country. A fierce winter storm made highway travel dangerous from the plain states to the east coast. At least five traffic deaths have been blamed on the storm. Many airports reported delays. New York's JFK airport was closed altogether because of near-white-out conditions. And at Washington's National Airport, an American Airlines jetliner skidded off an icy runway.

None of the 140 passengers on board was injured. The federal government issued new guidelines for milk labeling today. The Food and Drug Administration said labels can tell consumers if the milk comes from cows treated with a genetically engineered hormone. But they cannot say milk from untreated cows is any better. A hormone makes cows produce more milk and went on sale last week after the FDA declared it's safe. Some stores and dairies have refused to carry such milk on grounds of possible consumer resistance. That ends our summary of the day's top events. Now it's on to health care's bottom line, insurance industry lobbying, and Connor Cruz O'Brien. The rollercoaster ride of health care reform is our lead tonight. The president was on the hustings today defending his plan against business critics. Last week, three major business groups came out against the plan.

Mr. Clinton answered them in a speech to auto workers in Louisiana. Most of what you hear in this debate is about a world that doesn't exist. They say, oh, Bill Clinton is going to take choices away. That's not true. We're going to guarantee more choices to most workers. So don't let people put that kind of smoke out there. They're saying we're getting the government in the health care. That's not true. We're moving the insurance companies out of the driver's seat and letting the people and the businesses have more influence. And that's what we ought to do. Look, I know there's a lot of money in this, and there are a lot of good people who work for those companies. But you just have to ask yourself whether we can afford to continue to spend 40% more than everybody else and not cover everybody. You're going to hear how, well, inflation in health care costs has gone way down because of the competition. It has.

It goes down every time there's a serious threat to reform the health care system. And you let them kill my bill and you watch what happens to medical inflation for the rest of this century. It'll go right back up again just like it has every time in the last 50 years as soon as the interest groups could kill a serious plan at health care reform. But this afternoon, his plan took another hit when a long-awaited cost analysis by the Congressional Budget Office came out. The president has been insisting that his plan could give universal coverage to all Americans and cut the deficit at the same time by reducing health costs. Today the CBO said that's not the case, at least not initially. It said Mr. Clinton's plan, in fact, will add $70 billion to the deficit over the first six years. The CBO said the plan will require more government subsidies for employers than the White House projected. The CBO also said that Clinton's mandatory employer paid premiums should be included in the federal budget. Something the White House has been resisting for fear its opponents could characterize those payments as a tax.

We'll assess the political impact of today's report in a moment. First here are excerpts from today's testimony in the House Ways and Meats Committee by CBO Director Robert Reishauer. I have appeared before committees and subcommittees of the Congress well over 100 times. On each of these occasions, I have started with some customary remarks concerning how pleased I was to have the opportunity to testify. I did not start off that way today. I did not because I have considerable foreboding that the information contained in my statement and in the CBO report might be used largely in destructive rather than constructive ways. That is, it might be used to undercut a serious discussion of health reform alternatives or even to gain some short-term political partisan advantage. Let me ask you a word then about costs. As I added up roughly, when you look at the 10-year period, you come out about 125 billion greater than the president estimated it.

With respect to budgetary costs. Right, yes. At the first five years, what's the order of magnitude of the difference between you and the president just roughly? Talking about at five or 10 percent differential in terms of overall costs are smaller than that. I think an overall cost meaning if we're taking the health care and spending all of Medicare and Medicaid and all of that, we're well below that, I would think. Well below five percent. Let me then ask you this question. If that differential isn't very great, and you project 10 years, and there are stories that these programs are always underestimated, why should we trust your figures? Are you quite confident? Well, I spent the first five minutes here, I think, saying to you that this was our best shot.

This is as good a job as we can do, but there's certainly a great deal of uncertainty that surrounds our numbers and every other set of numbers relating to this plan or to any of the other systemic reform initiatives that are before you. Are you quite sure you're within the ballpark? We're within the town the ballpark's in, I'm sure of that. The health care ball is in Congress's court, and that's where we turn now for reaction to the CBO report. Senator Tom Dashill is a Democrat from South Dakota, and a key backer of the administration's health plan. Senator John Chaffee is a Republican from Rhode Island who's sponsored one of the key Republican alternatives. Rather than require employers to buy coverage for all workers, he would make all Americans by their own insurance. On the House side, Congressman Jim McDermott is a Democrat from the state of Washington. He's the leading sponsor of a single pair approach, setting up a government financed health system similar to Canada's.

The Congressman Fred Grandy is a Republican from Iowa. He's the Republican co-sponsor of the Cooper bill, which wouldn't require anyone to buy or provide coverage. Senator Dashill, let me start with you. Is this a political body blow to the Clinton health care plan? Not at all. I don't think that this means a lot to Americans all over the country. In fact, Mr. Reichauer said there was small potatoes in the differences between his projections and ours. Key questions, the things that the American people care about are universal coverage, cost reduction, and choice. In those areas, Mr. Reichauer said that this plan is very good. We establish universal coverage by the year 2000 at lower cost. We increase choice. Those fundamental issues the American people care about are really the issues upon which they're going to make their judgments on health plans. But wasn't one of the major selling points of the Clinton plan that it was going to save money? Well, I think that is one of the key areas and what the CBO says is that over this period of time, we save $150 billion a year by the end of this 10-year period of time.

That actually, we save money in the budget in the out years. Obviously, during the start of time, during the transition, I don't think anybody realistically expects to save money. Keep in mind, that $70 billion ought to be looked at in context. The context is $1.1 trillion. So it really is small potatoes. It matters very little, whether it's $70 or $50 or $30, the bottom line is we save money in the out years when it really matters. Senator Chafee, what do you think is going to be the political impact of this report? Is this small potatoes politically? Well, where I come from, $130 billion difference isn't exactly small potatoes. I think there are two blows that the administration suffered as a result of Mr. Reichauer's testimony. I don't think either of them are fatal. First, the difference in the cost, or rather substantial, we're talking $130 billion difference. The second point is that Mr. Reichauer confirmed what we've been saying that these massive alliances that the president has included in his plan constitute a new federal bureaucracy.

That's why he said these health expenditures through the alliance go on budget. Now, whether it's unbudget or off budget, it isn't all that important. But what it really means is that this is a massive federal program, and he doesn't rely the president, doesn't rely on competition to bring down the costs. He relies on this massive federal structure. And finally, I think the key point is what Mr. Reichauer said, in that we're moving and we're very, very unknown territory here. He said, and I'll just quote, many complex changes to an industry that encompasses one seventh of the economy are highly uncertain, and that's why I believe so strongly that one of the great virtues of our legislation is that we proceed with some caution. We pause at the end of each year, see what the expenditures are, see whether we can afford it, see what tack to take. We get to universal coverage, and that's a very important point, which the president has in his bill, and we have an hour bill.

Congressman Grandi, you're the co-sponsor of the Cooper Plan, which has been dubbed Clinton Light. Is this the kind of thing you've been waiting for to be able to pitch your plan as opposed to the president's? Well, the cumulative weight of the Reichauer testimony today, coupled with the business round table endorsement of Cooper Grandi last week, the National Governors Association embracing the tenets of the bill, although not the title, and the Chamber of Commerce coming against the Clinton Plan. In a town where perception is reality, yes, it does seem as though what's happening is the cost of government is becoming a very big factor in this deliberation. And really, the fact that it's scored on budget or off budget is inside baseball for policy makers, to the guy sitting out with a small employment force. This is either an unfunded mandate or a huge new tax. What's the difference? It's a huge cost shift. And that's really where the fault lines are being drawn now. Cooper Grandi has no employer mandate to pay.

And I think that's going to be one of the major sticking points, and maybe ultimately a bargaining point if the president begins to move in our direction. Congressman Dermatt, your plan, of course, goes ahead and sets up a government insurance plan. What do you think today's report does to the political prospects for all of these different plans, but particularly the Clinton Plan? Well, I think today we got out of the slogan season that we now have hard numbers. And the single-payer plan, which provides more benefits, including long-term care, which the president doesn't even touch, is provided by our plan for less cost. We save $100 billion a year in administrative costs. So if you look at the plans and evaluate them on the same basis, you have our plan giving universal coverage in the first year, and saving money in the third year, and everybody has a more generous package. The Cooper Grandi Plan has 25 million people still uncovered in the year 2000. So that isn't even on the screen.

The only plans left are the president and the single-payer plan because we have the universal coverage, which the president said they must have, or they will not be considered. One point that Robert Raishauer made today, and I think this was something every member of Congress knows in his or her heart, is to get health care passed in this administration or any administration. It takes hard work and bipartisanship. Our bill is the only bill that has a significant complement of Republicans and Democrats. And that's what it's going to take. And Congressman Grandi, it's only fair for viewers and voters to ask you what would be, could you survive this same kind of analysis? If CBO was looking at the Cooper bill or the Cooper Grandi bill, what would they find about your bill? Well, first of all, we never promised that the Cooper Grandi bill was going to reduce the deficit. This is a health care bill that's market-driven, so most of our costs are off budget. What we don't do is we don't cut Medicare by $125 billion. We cut it by $40 billion, and we put most of the price controls at the consumer level. We cap the deductibility of an individual at the basic benefit.

Now that's a critical point. That's probably as controversial on our side as the employer mandate is on the president's side. But the fact of the matter is, this is a bill that believes that markets go before monopolies and mandates. And Jim's point about 25 million people being uncovered, that's only if you don't believe that markets will help absorb the access question by allowing people to get their own insurance at prices they can afford. You're right. So I think that it's very important that we do have the kind of analytical data that is going to be required for us to compare. We don't have the current analytical data on the Cooper Grandi bill, but we do have last years. And last year said that the CBO estimated the deficit over the first five years would be about $70 billion, coincidentally. And they did say something about 22 million people left uninsured. So until we're able to compare apples and apples, it's really almost unfair to single out the Clinton bill as the sole basis upon which we make these decisions. I think ultimately that will come, and I think with that will come the kind of consensus

we're looking for. But these are the actual, all of your colleagues here are saying, and they have three different proposals, that all of theirs in different ways would cost the government and the country less than the Clinton plan. Well, that's not true. I don't think, I don't think one can say that. And it has numbers that say that. One of the others have been scored, so everyone else is selling blue smoke and mirrors until you get CBO. That's why this was such an important day. You now have two plans that have been scored, and we will compare very favorably in that kind of thing. We're going to win. Senator D'Ers. What about Congressman McDermott's point that CBO has, in fact, scored the single pair plan and found it to be the most cost-effective? Well, I think there's some truth to the fact that you can gain some efficiencies with the single pair plan that you can't with others. That's established. I don't think anyone denies it. The question is, is that what would be politically acceptable and building upon the current traditions we have in health care? I don't think that is really the case, and for that reason, what we're trying to do is to find some compromises here that allow us to achieve the greatest degree of efficiency

given the traditions we have in health care across the country. I think we can do that and come very, very close, Margaret, with the kind of proposal the Clinton administration has made. Margaret, this is not a question. Let me just say this. We've had a single pair plan in this country in connection with Medicare. And we all know that the Medicare costs have just run riot. They're up around 11 percent every year compounded. So the idea that a single pair suddenly is going to bring down costs is just nonsense. And I might say, I think the important point for us to remember in all this, and Mr. Rishau has said it, is that this is uncharted territory. Nobody knows. There's no precedent for estimating when you jerk around one seventh of the economy in the United States in estimating what it's going to cost. So that's why I think the great virtue of our plan is that we pause at the end of each year and take a look and see how we're doing. And that, I believe, is the only sensible way for the taxpayers of America to proceed. Just last week.

What about Senator Chaffee's point that Medicare is in fact a single pair plan and that costs have never stayed within the estimates? The single-payer plan of Medicare is administered at 2.1 percent. Insurance company spend 14 to 25 percent. That's why we can save $100 billion. The cost of health care, the demand, the senior citizens, of course the cost have gone up in Medicare because we have more people who are covering more people who are giving the best health care in the world. But the administration has very well done. Look, wait a minute, let's stop talking about cost for a minute. The only people that really care about costs are the four people on this panel. To most Americans, the question on health care is value. And it's not just about savings, it's about what you get for the benefit. And what Bob Rieschauer said today is one of the reasons the Clinton plan is moving into uncharted waters. It's a universal head entitlement to health care prescribed by a sovereign power. People do not at this day and age associate value with the federal government running

our nation's health care system. That's got to prove. That is not exact. That is not at all what we're doing. What we're doing here is laying out an infrastructure within which the private sector is going to work. Now, we know that. And I think all these charges about government bureaucracy and sovereign powers as just smoking mirrors the same kind of thing we've seen for a long period of time. This is a private sector system. And in that private sector, all plans are equal and that we're all into the uncharted waters. We really don't know how they're going to make our best guess. In my state, everybody would be in one health association in the administration proposal. It's just nonsense. That is not nothing. It is a message. Federal bureaucracy. Senator Dazzle, let me ask you this point. One of the reasons the president set up this system in which in fact private insurance companies would have a major role was to keep business on board. Now of course three major business groups have come out against the Clinton plan or endorsed other plans.

In retrospect, was the Clinton White House naive about where the business community would come down and what is the political impact of those actions last week? Well, my answer is so what else is new. When was the last time businesses on the cutting edge of social change? They've always had to be brought kicking and screaming into some realistic change within our society. That is no different in this case. I think the real surprise would have been if they would have supported it. The bottom line is you've got 50 or 60 national organizations from health care, working people, professional organizations, and business who have indicated their support for the Clinton approach. That didn't get the kind of news for some reason. It was the same week that a lot of these organizations came out and supported it and door stood. But for some reason the focus was on these three groups that didn't. I think when you look at all those who are lined up and supported it far outweighs those who oppose it at this point. Congressman Grandy, do you agree that the business support, some of which came your way, doesn't really matter much? No, it matters a great deal because it's not just big business, it's small business.

And don't forget a lot of these people, the same people that endorsed the Clinton budget of last year. So they don't necessarily always line up against this administration. What they're saying is an 80% requirement to pay a premium is more than any business can absorb. And the fact that government would basically demand that business do that is something that is quickly unified, big business and small business, which by the way have traditionally not been agreed on major social engineering. Most large businesses do line up, usually with initiatives that try to lower the deficit and even raise some taxes. Small businesses don't. In this particular instant, you've got almost an entire spectrum from Fortune 500 companies down to mom and pops that say, this is more than we can handle. What about that? That is a wide house. No, it's hilarious. As soon as you've got 60% of the businesses already that provide insurance and they go away beyond 80%, what they aren't being told is that if we do nothing or if we do what some of my colleagues here are proposing, their increases in taxes will far exceed whatever increases

in premiums they're going to see. What we're trying to do is to spread the responsibility, spread the kind of risk that has been concentrated in the hands of fewer and fewer people. If we do that, if we spread that responsibility, we can lower premiums and lower taxes. The alternative, what the Cooper-Grandy approach especially and to a certain extent the chafey approach would do is increase taxes and I don't think anyone wants to see that. Senator Chafey? Yes. The answer is that the administration's bill is not going to pass in its current form. The massive federal structure it has, the tremendous regulation, price setting and all of that is just not going to prevail in this Congress and I'm confident we're going to have a health care bill by August of this year but it's going to, I believe in the final analysis so look a lot more like our bill than the administration's bill. Senator Dash, let me ask you one other thing about universal coverage because that's what the president said was his one non-negotiable item. But the White House is beginning to talk about guaranteed access for all Americans.

Is there any kind of watering down of universal coverage that we see unfolding here? Is that likely or possible to be negotiated away and part? Absolutely not. We've got to have universal coverage and really the great thing about what happened today was that the CBO said you can do it. You can provide universal coverage and reduce costs and provide better choice in those three areas and I think those are the key areas, the administration and CBO are right lockstep and I think that's the critical thing that we're going to be talking a lot more about in the weeks ahead. And which of your rival bills do you think also give universal coverage? Is it only the McDermott plan? Well the only plan that does it was certainty is the Clinton plan and the McDermott plan. All the other plans don't do it, they fall far short and we know that. Now that is not accurate. Our bill provides universal coverage, we cover everybody and we get around to it. No, we can get around to it. We do it by the year 2005, we don't do it in 1998 and by the way I'm confident the administration's figure is going to slip on that too.

We will have everybody covered under our plan. Last week we were told that we can't have cost containment unless we have immediate universal coverage. A lot of experts around the country feel that way and I think that's the point that we've got to talk more about. Congressman Grandy, let me ask you about one other thing that the president said today. He said this CBO report is just something that Washington policy wants to interest it in or I suppose the five of us and that no one out there in the country cares that there is going to be a bill and it's going to be mostly modeled on the Clinton plan. Do you think that's true? Well a lot of people will relate to $134 billion shift in what the administration says and what the cost estimator for the administration says. But ultimately I think that is not as important as the fight over employer mandates, the fight over global budgets, the flight over bureaucracy and these are lower case items that people can understand. As I said earlier, it's the collected weight of the rice hour testimony with some of the endorsements that are beginning to pull members back towards the center of this debate and that's really where it should be.

Remember what the business roundtable said last week is we want Cooper Grandy as a point of departure. Nobody has the final bill sitting in their back pocket. All we're saying is we want the Clinton bill to come back to a more reasonable starting point and then discuss things like employer mandates and global budgets. What about that Congressman McDermott? Do you see the tide shifting more towards the center which is of course away from single payer? No I think actually it shifted toward us today because it really said that there is a cost to health care and the question is what's the most efficient way to give the American people the most coverage and the single payer system today was given a real boost by the fact that the president's bill costs more and he doesn't cover long term care and there's all kinds of things that we have in our plan. Ours is very simple to explain. You take your taxable income and you multiply it by 2.1 percent and that is your obligation for your health care for the next year. Anybody can figure that out. I defy anybody to tell me what the premiums are going to

be in the president's bill or the Cooper Grandy bill or any other bill before us. We put a plan out that Americans can understand and they're going to want that in the end. Senator Dash, where do you think the public is moving on this? How do you explain that recent poll show health care is no longer right at the top of their list of concerns? Well I think it depends on which poll you look at. Actually you see a lot of them are covered that show that it's one of the two top issues in the nation. And when you really look at what the numbers are, the numbers are improving for us. More and more people are saying they've looked at the Clinton plan and support the concepts that stand behind it. That's really all we want to talk about. Universal coverage, more choice, effective cost containment. Those kinds of the things are overwhelmingly the things the American people support. Senator Chaffee, do you see any shift in your constituents as economic times improve in terms of what they're looking for or how eagerly they want health care reform? Well when times are bad, as they've been in my state, the people concentrate on the economy

and jobs so that health care slips down a bit. But I still believe that health care is very, very high in their concerns and I'm confident we're going to get a health care measure. It's not going to be the measure that Senator Dash will oil soldier in the Clinton administration for us as is a backing because that has too much regulation, too much bureaucracy and frankly it costs too much, it proceeds too quickly. I believe that that's not going to pass but we're going to get a health care measure and I think it's going to combine a lot of the virtues of the various bills although I don't think single payer is going to be a player in it. So victory for everyone all around. Thank you Senator Congressman Jim. So to come on the news hour tonight, the insurance industry's top lobbyist and a conversation about the new world. Now another view of the health care battle, it is that of a man who has been through

many congressional fights but this is his first as a lobbyist, Kwame Holman reports. There he is. Sorry to go. Last Tuesday Bill Gratison went back to work on Capitol Hill one year to the day since retiring from the House of Representatives. Gratison served 18 years in the House as the Republican representative from Ohio's second district. He was a member of the Ways and Means Committee, the ranking member on its health subcommittee and considered one of the most knowledgeable members in the field of health care reform. So when the Health Insurance Association of America went looking for someone to argue its positions in the current health care debate, it went right to Bill Gratison. Well, I guess they thought this former member of Congress would be a good person to have a route and frankly it was my hope and my expectation that I would have a chance at least to be more involved on the outside rather than the inside of the Congress.

Gratison is president of the Health Insurance Association of America, representing some 270 small and medium sized insurance companies certain to be affected by changes in the health care system proposed by President Clinton and others in Congress. Congressional ethics rules prohibited Gratison from lobbying former colleagues for one year but that year ended on Tuesday and Gratison was once again on Capitol Hill at the invitation of the Senate Finance Committee. To Gratison, you are first and again very welcome. It was not however the kind of nostalgic reception a former member of Congress might expect. I will start by saying that I think that the advertising that you have instructed and that your HIAA has been putting on television throughout this country at the cost of 8 to 10 to 15, God knows where I will end up, millions of dollars, is probably the single most destructive effort that I can remember in 30 years of public life at trying to undermine

public policy that this country desperately and definitely wants. The one word that I have always associated with Congressman Bill Gratison was integrity. We would differ on issues as a member of the Ways and Means Committee, but I always felt that Bill Gratison had integrity. These ads do not have integrity. The ads in question are part of HIAA's campaign against elements of President Clinton's health care reform plan. They feature a fictional couple, Harry and Louise. Things are changing and not all for the better. The government made forces to pick from a few health care plans designed by government bureaucrats. Having choices we do not like is no choice at all. They choose. We lose. This is an issue which won't be resolved by the White House, it won't be resolved by the Congress that it will be resolved over the kitchen tables of America as people sit down and look at the alternatives and decide what they are for and what they are against.

So it was an accidental that Harry and Louise in many of our ads were sitting at the kitchen table thinking about what they wanted in the way of health care reform. Gratison says his association agrees with the President on a number of key issues. Starting right from universal coverage in a federal benefit package down to the controversial employer mandate. But opposes the President on others. We believe it is possible to have universal coverage without this new unnecessary bureaucratic employer which is the mandatory health alliances. Second, we are opposed to premium controls which we are very much concerned could affect both the quality of health care and indeed access to health care over a period of years. But when Gratison repeated his concerns and outlined his remedies before the Senate Finance Committee, Jay Rockefeller of West Virginia turned the focus back to the television ads. You hold up your paper here and you talk about all the things you would like to see.

Knowing full well that the American people of course will never see this, nor will they ever hear it. What they see is what you pay for which is that Harry and Louise know that there is a better way and you talk about giant bureaucracies and you are scaring people. Gratison has heard the criticism before. First Lady Hillary Clinton attacked the ads in November. What you don't get told in that ad is that it is paid for by insurance companies who think their way is the better way, they like what is happening today. They like being able to exclude people from coverage because the more they can exclude, the more money they can make. And your former ways and means chairman Mr. Rastinkowski says the ads were Willie Horton ads of the health care debate. Well that was a plus and a minus. The Willie Horton ads were effective and judging from the response from the last I checked we had received over 230,000 calls to our 800 number.

I think we are raising questions which are appropriate to be the subjects of some national discussion. People may agree with us or disagree with us but we think we are raising appropriate questions. And the ads continue. This one featuring Louise and her business partner Libby. I want Congress to pass health care. Make sure everyone is covered but not forces to buy our insurance from these mandatory government health alliances. You are having an effect. You are very skillful. It is an executive. You are having a very good effect. You can see the distrust of the Clinton plan coming down as your ads which are the only ones out there because we don't have the money to go ahead and try and counteract them. Bill Gratison quietly responded to the attacks on his association and its ad campaign. He went on to defend himself as well. Basically I am still the same person senator. I am a dove turned hawk. The way in which this debate got started last year not in the Congress but elsewhere was premised in part upon the notion that health insurance could be sold by blaming the current

problems on the health insurers. And I could document that at great depth in writing if it was necessary to do so. What I would hope we could do and I said this to the White House and they speak for themselves. I think there is an agreement. Is to not get into who has the first stone but get into working together to find answers for the future. And that is certainly my hope and as for our media program it is always subject to review and revision. Gratison said the questions and tough statements from Democrat senators Rockefeller and Dashow were not unexpected but he said he was surprised by their tone and when asked about his one year moratorium from lobbying on Capitol Hill, Gratison half jokingly said maybe it should have been five years. According to another conversation about nations and nationalism with an Irishman named

Connor Cruz O'Brien, Charlene Hunter-Gullt, has more. Connor Cruz O'Brien has worn many hats in his lifetime of 76 years. Scholar, diplomat, politician, playwright, newspaper editor. He is currently a senior research fellow at the National Center for the Humanities in North Carolina. A recent Atlantic monthly cover story dubbed him a 20th century witness, the only contemporary writer who can be compared with George Orwell and Andre Melrow. We caught up with O'Brien recently in Washington and pressed him on some of his views about the troubles of the world in the post Cold War era. Connor Cruz O'Brien, thank you for joining us. Thank you. I want to talk to you about nationalism and all of its manifestations today but it's just for the sake of clarity, let's begin with the definition of nationalism. Well, John, in a definition is very difficult because it's a very slippy, elastic stuff

we're dealing with. But I think at the basis of it is the feeling that people have for territory, territory associated with ancestors, their language, their religion, whatever, all coming together in a very powerful mixture. When it's calm, it's good but if nationalism is disturbed, it's denied, humiliated. It can turn into the most evil and destructive force in the world. Is that what we're seeing now? I mean, because the German playwright, Hynemühler, has written that communism may now have disappeared into history but the nationalists are merely replacing the Berlin Wall with one of their own making.

Do you accept that? Yes. I do. What is happening in Russia is I believe analogous to what was happening under the Weimar Republic in Germany, and of course that is the most ominous parallel anybody could probably draw. But what was happening under the Weimar Republic was that the nationalism of the major states and culture that of Germany had been humiliated by military defeat and the humiliation and with all the stronger, because Germans had particularly prided themselves for two centuries on their military prowess, so as to be beaten to be hammered in war, was a most gratfully traumatic thing for all Germans. And the denial, then you get the neurotic denial of the catastrophe. We were not weak.

We couldn't have been weak. We were too good to be weak. So what happened? We were stabbed in the back by the Jews. Well in Russia now, the thing in common is the feature of humiliated nationalism. This was a superpower. Almost everybody in the world stood in awe of Russia as the principle victor of the Second World War as it was, because the Russians carried most of it. And the weight of the tremendous German offensive Russians were naturally extremely proud of that. And suddenly everything goes every which way, and as I say nobody knows where Russia is or what it is, or what are we going to do with pockets of Russians scattered among non-Russian and there is a very strong incentive to say, we must pick ourselves up, we must rebuild Russian greatness.

As you look, not only in Russia and the former Soviet republics, but in Yugoslavia, Somalia, Nigeria, other places, is there a common elements coursing throughout all of these places where nationalism is on the rise? The common element I think is always the primal loyalty to kinship territory, et cetera, the forces we've we've linked to. And they're the basic bricks of the whole thing, but what happens to the bricks is very fluid. And you mentioned Somalia, that's very much a case in point. General I did is the best known of the so-called Somali warlords, and in a way the Americans by building up, I did, as the enemy, were building them up as a future, a probable head

of his reconstituted Somali nation, but it's okay if you're a leader of a small clam in the Horn of Africa, and you are seen to have taken on the United States, and it's the United States that backs away as this happening. So then you're a pretty big guy, and the eyes not only of your own clam in Somalia, but of other clams, and the red clams and sub-clams, and people rally for new institutions associations and so on. So I would expect the nation building to go on around there. Around him. Around him. Is there a parallel in the form of Yugoslavia? One of the persons who emerged as the chief leader of the resistance to the Nazis, who is Marshal Tito. He was seen as a really big guy, who had taken on Hitler and Stalin in succession, and

he was almost a god. He was himself a croat, but he had followings among the other peoples, Serbs and Muslim and so on. But on his death, the system fell upon the hero, the unifying symbol was gone, and the old rivalries, many of them dashing back to the course of the Second World War itself took over. And yet the argument has been made that Yugoslavia was a model of what a multi-ethnic society in a Balkan state could be. I mean, how did the lights suddenly go out? I think under the surface there was always a good deal more animosity than was perceptible. Within the state system, as long as the state system existed, it was formally Marxist. And one of the important things about Marxism was that it was anti-nationalist, and therefore

against it barred as politically incorrect, all forms of ethnic slurs, well, paradoxically, as that system collapsed, and freedom of expression became a value. People used freedom of expression, as they always will, it's one of the things you do with freedom of expression. And they abused it for rekindling and legitimizing inter-ethnic hostility. I am not in favor of intervention in former Yugoslavia, I think it would only make things worse. And one of the reasons to come back to our primary subject, one of the reasons why it wouldn't work is simply that nationalism is a tremendous force, a tremendous emotional force, when it's aroused as it is among these ethnic groups, among Serbs, Christ, Muslims. Whereas internationalism, internationalism, is not an emotional force at all, at least

not a force that moves people in masses. So that if you send troops, Serbs, Christ's, I think probably also Muslims, will start guerrilla war against them, they couldn't hold against an American force, but they could make us, as in Vietnam, they could make life hell for the interveners. The argument has been made that many of these countries, Germany and others, are facing an identity crisis that part of the problem is of resurgent manic nationalism, as I think you've referred to it. I think there is an identity crisis, I think those who say that German nationalism could not reassert itself are, they may be right, we must hope they are, but I think one should be prepared for the alternative possibilities.

I think one saw, the neo-Nazisism today is a small, apparently weak movement, but what is more disquieting is the extent to which Paul's show Germans in large numbers, expressing understanding of neo-Nazi attacks on other ethnic groups, and understanding can often be a cold word for approval, but I don't find it respectable to say so. Is there a failure of vision, is there a failure of values as you look across the broad spectrum of nationalistic resurgence? Well, what's happening to political theatre now is that it's speeding up, it's reaching larger and larger audiences in smaller and smaller bites, so that there's almost no overall

sense of coherence. In the 19th century, for example, you'd have Gladstone making a speech about Turkish treatment of the Armenians, and this would run column after column in the newspapers, because there was no radio, no television, but people would read, solidly read these long speeches, and okay, they had, they had there from a coherence, spectrum, not the band entirely accurate as one of us, as a matter of fact, but it was coherent, it was intelligible. Now with these snaps, snaps on the mouse television programs, people are getting emotional charges, short emotional charges, about situations which they briefly glimpse part of, and I think partly from this, that you have the sense of incoherence at the high political

level in the international community about what to do. The politicians don't know what to do, until they know how the television audience is reacting, and the television audience is reacting to something other than the stuff of what is happening out there, so this is unhealthy. Can you just tell me finally what your thoughts are about the future of Northern Ireland? I think the only way in which one can envisage possibly better future for Northern Ireland is if the majority of both Catholics and Protestants, who are not supporters of the terrorists, if they can combine together in a joint effort against both sets of terrorists and using their weight with the British government for an even-handed attack on the terrorists.

I think the emphasis has to be on security, that by break has got, breakthrough has got to be made there. The talks that started recently, do they hold out any prospect of hope? Absolutely not. Because when the announcement or the news leaked out or came out that Britain had been involved in talking, we did a program and it was great, Shirley Williams and others said that this was the beginning of an era of peace or the opening wedge. Shirley is very nice, but she's a chuckle-headed piece-necker. Well on that note, kind of grew so bright and thank you for joining us. Again, the major stories of this Tuesday, the Congressional Budget Office said the Clinton

Health Reform Plan would increase the deficit over the next six years instead of cutting it, but it would ultimately lead to lower spending for health care, and the White House said it's decided on new diplomatic steps and the Warren Bosnia backed by renewed military threats. Good night, Jim. Good night, Margaret. We'll see you tomorrow night. I'm Jim Lara. Thank you and good night. Major funding for the McNeil-Lera news hour has been provided by PepsiCo. And by the Archer Daniels Midland Company, ADM supermarket to the world, and by New York Life, yet another example of New York Life's wise investment philosophy, and by the Corporation for Public Broadcasting, and by the annual financial support from viewers like you.

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Thank you. Thank you. Thank you.