The NewsHour with Jim Lehrer

ELIZABETH FARNSWORTH: Good evening. I'm Elizabeth Farnsworth. Jim Lehrer is on vacation. On the NewsHour tonight, the latest on the big tax bill in Congress, hard times on the nation's farms, the millennium bug infects the health care industry, and four police chiefs on the issues they want debated in Campaign 2000. It all follows our summary of the news this Thursday.

NEWS SUMMARY

ELIZABETH FARNSWORTH: The House approved the final version of the Republican tax cut today. The vote was 221 to 206. The Senate moved toward its vote as both chambers readied for summer vacation. The legislation cuts taxes on income and capital gains, and phases out taxes on inheritances. The reductions amount to $792 billion over ten years. President Clinton vowed to veto the bill. Republican leaders say they won't send it to him until September so they can drum up support for it during the recess. We'll have more on the story right after the News Summary. The Clinton administration offered help today to the ailing U.S. steel industry. It included a pledge to block international loans if borrowing nations use them to subsidize production of cheap steel. Such foreign steel imports have driven down U.S. prices. President Clinton is also expected to sign legislation making special federal loans available to steel makers. Labor costs far surpassed productivity last quarter, the federal government reported today. Worker output rose at an annual rate of 1.3 percent , while wages surged 3.8 percent, the largest jump in three years. Analysts said that was a formula for inflation. Two weeks ago, Federal Reserve Chairman Greenspan warned Congress the Fed would raise interest rates, if necessary, to ward off inflationary pressures. The F.B.I.'s investigation of alleged nuclear espionage by Chinese agents was flawed from the outset; that's the conclusion of a Senate committee report released today. It said investigators failed to build a strong case against Los Alamos weapons lab scientist Wen Ho Lee even after he failed a polygraph test. The committee's ranking Democrat, Joseph Lieberman, said the events were troubling.

SEN. JOSEPH LIEBERMAN: When our government suspects espionage, we have a right to expect that investigative and law enforcement agencies will vigorously pursue those suspected. And they will do all that with a high degree of thoroughness, competency, and urgency. Unfortunately, as we discovered during our hearings, there was what was to me a shocking lack of thoroughness, competency, and urgency in the government's investigation of this very important and critical case.

ELIZABETH FARNSWORTH: Wen Ho Lee was fired from his job at the lab last March. He had been under suspicion since 1996. Attorney General Reno told reporters today she had not had time to review the Senate report. The Senate confirmed Richard Holbrooke today as ambassador to the United Nations. The 81-16 vote came 14 months after his nomination. Holbrooke's confirmation was delayed by a review of his finances, and by several Republican Senators who put a hold on his nomination to try to win concessions on other matters from the Clinton administration. There was another workplace shooting today, this one in Pelham, Alabama, 12 miles South of Birmingham. Three people died when a gunman opened fire at two businesses-- a welding shop and an air conditioning firm. Police said they arrested a man who worked at one firm, and had formerly worked at the other. The shootings came a week after a stock trader shot and killed nine people in Atlanta. A citywide memorial service was held there yesterday. And that's it for the News Summary tonight. Now it's on to a tax bill update, hard times for farmers, hospitals and the millennium bug, and Agenda 2000.

UPDATE - TAXING DEBATE

ELIZABETH FARNSWORTH: Republicans in Congress put their tax cuts up for a final vote. Kwame Holman reports.

KWAME HOLMAN: It's become something of a tradition on Capitol Hill. Whenever Congress is about to vote on an major issue, proponents and opponents stage competing rallies to hail their respective positions. And, in the case of the Republicans' $792 billion tax cut plan, the rallies went ahead even though the issue has dominated political debate for weeks.

REP. DENNIS HASTERT, Speaker of the House: We have a good deal for the American people, and it's the tax relief bill that we intend to vote on today. It's a fair, responsible and balanced tax relief bill. It's fair, because it gives every American tax relief.

KWAME HOLMAN: The Democratic rally was held indoors and featured President Clinton.

PRESIDENT CLINTON: We ought to figure out what is it we have to spend to educate these kids here, to provide for the national defense, to invest in medical research, to do the basic things. Then we ought to ask ourselves how much is left, and whatever it is, we ought to give it back to the American people in a tax cut. That's the way we ought to do it. (Applause)

KWAME HOLMAN: Details of the tax cut plan were negotiated by House and Senate Republicans. They include a one percentage point reduction in each of the three-income tax rates, a reduction in personal capital gains tax rates, a reduction in the so-called marriage penalty tax, and a phase out of inheritance taxes.

REP. KAY GRANGER, (R) Texas: This bill isn't really about numbers and figures or phase-in and credits. This bill is about the American people, their hopes for the future and their dreams for their children.

REP. DAVID BONIOR, Minority Whip: What they're doing is playing Russian Roulette with the whole U.S. economy, and it's our money that they're gambling, our Social Security, our Medicare, our education, our future.

KWAME HOLMAN: When the tax cut debate began in the House today, some members looked for new and different ways to make their arguments. Visual aids were a popular choice.

SPOKESMAN: I yield one additional minute to the gentleman -

SPOKESMAN: The gentleman is recognized for one additional minute.

SPOKESMAN: -- with a chicken.

SPOKESMAN: Social Security and Medicare don't enjoy the benefits of the chicken manure producers. They get plucked clean.

KWAME HOLMAN: And some members, having heard the same arguments repeatedly over the past three weeks, resorted to good-natured ribbing.

REP. CHARLES RANGEL, (D) New York: I have seen a lot of political things, but I've never seen a sham like the one that we're trying to pull on the American people today. There is not a Republican in this House of Representatives that can look into their constituent in the eye and say that this bill is going to become law.

REP. DAVID DREIER, (R) California: I am convinced that there is no better expert at putting together a tax increase bill than my friend standing in the well, and I want him to know that, Mr. Speaker, if we ever, ever on this side were to consider any kind of tax increase, my pal from New York is the first person to whom I would look for direction and advice and counsel on doing just that.

REP. CHARLES RANGEL: Everybody wants a tax cut.

REP. DAVID DREIER: They're ready for you.

REP. CHARLES RANGEL: Everybody wants a tax cut, but some of us believe that you pay off your debts first.

REP. DAVID DREIER: And that's what we're doing.

REP. CHARLES RANGEL: You can't pay off your debts, take care of Medicare, take care of -

REP. DAVID DREIER: -- in the next five years - by a six to one ratio --keep fighting for those tax increases, Charlie.

KWAME HOLMAN: No matter which direction the debate took, it always seemed to return to an argument over who would benefit most from the tax cuts.

REP. JOHN INDER, (R) Georgia: The top 1 percent of the income earners in this country earn 17 percent of all the income and pay 32 percent of all the taxes. The bottom 50 percent of the income earners pay 4.8 percent of all the taxes. We now have 40 million American families that pay no income taxes. And that's who the Democrats want to help.

REP. JOHN OLVER, (D) Massachusetts: The one million, one million wealthiest families whose income is greater than $300,000 per year will get about $1,000 a week of tax breaks. But for the 120 million American families whose income is under $125,000 a year, they're going to get enough to buy a cup or two of coffee a week so that they can stay awake while they're working their double jobs.

SPOKESMAN: This is a five-minute vote.

KWAME HOLMAN: Republican leaders had assured themselves of the support of most party moderates by including a provision in their bill making the tax cuts dependent on annual success in reducing the national debt. With that, the Republican tax cut bill passed on an almost straight partisan vote. But on the Senate side, a much closer vote was expected. Republican leaders weren't sure they could hold the support of their moderates. And Bob Kerrey, one of four Democrats who voted for an earlier version of the tax cuts, today announced he would vote against the revised plan.

SEN. BOB KERREY, (D) Nebraska: If Republicans want to change the law, then they've got increase the tax benefits that will go to people with lower income taxes right now. We're not trying to come in here with any kind of social engineering package, Mr. President, we're trying apply a standard of fairness. So as I have said, I have great respect for the chairman of the Finance Committee. I believe that he did attempt to try to apply a standard of fairness, and that, in my judgment, his package passed the test, and I voted enthusiastically, yes. But the Conference Committee report, Mr. President, does not pass that test. It does not pass the test of fairness. And so I enthusiastically and confidently vote no on it.

KWAME HOLMAN: In fact, all four previously supportive Democrats appeared ready to vote against the plan. But Republicans seemed to be holding just enough of their own votes to pass it.

SEN. DON NICKLES, (R) Oklahoma: Are we going to allow one-fourth of the surplus, are we going the allow the taxpayers to keep it? Or are we going to insist on that money going to Washington, D.C. and Washington spending it? And there's no limit on the amount of demands that we have on spending other people's money. We can spend it all. It would be quite easy. It's the easiest thing to do. Or we can say, "we have a significant surplus. Let's allow people to keep more of it." And we do that. And we've come up with a bill that I believe is fair. It's balanced. I think it's a good tax bill. It's a tax bill for taxpayers.

KWAME HOLMAN: The Senate vote on tax cuts was scheduled for later this evening.

FOCUS - DOWN ON THE FARM

ELIZABETH FARNSWORTH: The Senate yesterday passed a $7.4 billion farm aid package designed to help ease the plight of American farmers. Fred De Sam Lazaro of KTCA, St. Paul-Minneapolis, reports on what's going wrong.

FRED DE SAM LAZARO: Big agriculture shows are a summer ritual in farm country, a chance to showcase gleaming new equipment. But at Minnesota's Farm Fest this week, very few people were seriously kicking the tires.

MAN: Just looking.

SPOKESMAN: You looking or buying today?

MAN: Just looking. Waiting for my wife.

HOMER SCOTT, Vendor: Well, the people that are coming in are just sightseers. They're not actually dealing. They're not even interested in finding out where our dealer is. You know, they're just -- it's kind of tough, you know. Of course, then you've got to listen to their sad story. And you then have to tell them your sad story. (Laughter)

MAN: It wasn't set up right, didn't help the right people.

FRED DE SAM LAZARO: In the big tent, more sad stories and little hope things would change for the better anytime soon.

DEAN KLECKNER, President, American Farm Bureau: This is truly a free market. We don't like it now. I despise it now. We're losing sales because of our strong currency, which is a reflection of the good U.S. economy. Agriculture is not, we give you that. The economy of the country is great. Our currency is strong. Other currencies are weak, and we're in trouble.

FRED DE SAM LAZARO: The strong dollar is only one of several factors that's devastated farmers in recent years. They've had to endure drought, floods, crop disease, fewer exports to Asia and global competition, all at a time when federal farm subsidies are being phased out under reforms passed by Congress in 1996. Many experts say the current crisis dwarfs the hard times seen here in the 1980's when high interest rates drove thousands of farmers out of business. Paul Gruchow is an author and historian.

PAUL GRUCHOW, Author: Maybe 50 percent of farmers, some people tell me, will go out of business this time around. And it's inconceivable to argue that those are farmers who just are not very good at what they do. This is a group of farmers who really are -- who survived. The average age of farmers is pretty old. They're people who have survived all the previous crises, they're pretty good, and they know what they're doing.

FRED DE SAM LAZARO: Some will survive again, but not as farmers this time around.

AUCTIONEER: Bid $500? What do you think, guys? Last call. Will you give $475? Sold for a mere $450.

FRED DE SAM LAZARO: One year ago, we attended the auction at the farm Don Taus' grandfather began at the turn of the century.

DON TAUS: We are living with the same prices that we lived with in the early 1980's in the dairy business. And you could buy a pickup then for $4,000 or $5,000. You can't touch one for $20,000 today.

FRED DE SAM LAZARO: Today the 61-year-old Taus works in a kitchen cabinet factory. His job is to keep its many machines running, the first job in years to guarantee him an income.

DON TAUS: I don't have the pressure of having to make sure that that crop comes in, and if it doesn't come in, that I'm going to be able to come up with dollars from other sources to keep my livelihood going. I've had no formal training, but I guess to me, a machine is machine. It's usually run by an electric motor, and it's run by shafts pulling belts and chains, and pretty similar to any equipment that I've run all my life. So it wasn't a hard adjustment.

FRED DE SAM LAZARO: A booming non-farm economy across the upper Midwest is helping many farmers make that adjustment. Bob Grzadzelewski was forced out of farming by the record 1997 floods. Today, he owns a thriving construction firm, taking advantage of a boom in rebuilding.

BOB GRZADZELEWSKI: There's probably a job for everybody. There's a time when you can't see it, as a farmer you can't see it. You sell yourself short until you look at the big picture and what you've done and what you've accomplished in your lifetime and how many things you've learned doing the job. You're a mechanic. You're a financial person. You're a marketer. You're an agronomist. You're a whole package in one. So, yes. Yes, there's jobs for everybody.

LUCIEN BOLL: I'm not worried about a job. There's jobs out there. There's jobs all over, and I realize that.

FRED DE SAM LAZARO: Lucien Boll says his problem is not finding a few job, but getting out of the one he's had all his adult life. When we visited him a year ago, Boll thought he might be swatting his grain for the last time.

LUCIEN BOLL: I think this is it. I mean, if we don't get some prices, this is it. Equipment's getting old. Repairs are going up. I mean, we just can't, you know, cut corners and cut corners. We can't do it any more.

FRED DE SAM LAZARO: A year later, Lucien Boll is still tinkering with old equipment. Bailing out, he discovered, was not an option.

LUCIEN BOLL: If I got completely out of farming and just threw up my hands and said, "to heck with it," I'd have such a big tax burden, I couldn't pay it. And the banks, they got rules that they can't come and take your home quarter and your house. You know, you file bankruptcy, you get out and that's it. But the government can. The government can come in and take everything you've got to pay the taxes. How do I go pay a tax lien of $100,000 on an $8-an-hour job?

FRED DE SAM LAZARO: So for now, Boll's survival strategy is to buy time. He plants only half the acreage he did last year, and he sold the farm equipment to his son. 25-year-old Brian Boll already has a full-time job for a computer software company, but he was able to get a low-interest loan under a federal program for young farmers.

BRIAN BOLL: In my dad's case, I know he would love to keep farming. He's frustrated now, because he's drowning in a sea of debt, basically, and can't see the light at the end of the tunnel. And it's frustrating for him, but I know he would keep doing it if he could. And that's one reason I want to farm, because I want to hang on to the land. I want to hang on to some of those things that he's worked for and that I've worked for.

FRED DE SAM LAZARO: They may have a long wait before prices rise high enough to make farming profitable again. Richard Nelson of the University of Minnesota says aside from all the weather and disease problems, farmers here face daunting competition.

RICHARD NELSON: In a country like Brazil where there's a fair amount of land in the Piedmont that goes for perhaps $100 an acre and land in this valley might be $1,500 or $2,000 and prime land in Iowa is $3,000. Now, as I said, I do think that it will come back. I do think we have some things in our distribution system and in our growing system that gives us an advantage. Whether ornot there's a future for that 600-acre family farm that will generate enough income to comfortably raise a family is another story. I think those days probably are over.

FRED DE SAM LAZARO: Nelson says the likely survivors will be large-scale farmers, planting several thousand acres, acquired or rented from neighbors who are leaving the area or leaving the business of farming.

CAROLYN WEBER: The flies are horrible, aren't they?

FRED DE SAM LAZARO: Carolyn Weber used to farm 2,000 acres around her home with husband Dan. Today, they lead only part of the farm lifestyle. In 1995, after years of financial struggle, the Webers decided to give up all but 200 of their acres. They rented their land to a neighboring farmer. It was a wrenching move that came only after Dan Weber had a heart attack at age 39.

CAROLYN WEBER: And we had gone back and forth and had discussions and many tears and some raised voices. And it got to the point, well, what the hell are we going to do then? At that point we said nothing. So this is what we'll keep doing. But when it came to the point that it challenged Dan's life, not just the lifestyle, but Dan's life itself, the stress got to be humongous.

FRED DE SAM LAZARO: Dan Weber now works as a research plant technician at a local university campus. His wife Carolyn just graduated with a degree in agriculture economics. She expects to soon have a job that will allow her to hang on to the ancestral farm home.

CAROLYN WEBER: I think just lying down and saying, "poor us" is not a quality that people here hold on to. Maybe I'm a lofty idealist, but I do believe that there's a very strong infrastructure here and that there is a strong desire and a good quality of life here - not that there that there isn't good qualities of life in other places, but the quality of life that is here is something that I desire and that I know my neighbors desire and that we're willing to work towards sustaining that, whatever that means.

FRED DE SAM LAZARO: The challenge for Carolyn Weber is she'll likely have fewer and fewer neighbors. These days, many Red River Valley counties record their annual births in the single digits as people leave an area that plays a smaller and smaller role in the U.S. economy.

ELIZABETH FARNSWORTH: And Margaret Warner takes it from there.

MARGARET WARNER: For a broader look at the farming picture nationwide we're joined by Daniel Sumner, Professor of Agricultural Economics at the University of California, Davis. He served as an Assistant Secretary of Agriculture during the Bush administration. We also hope to be joined by Leland Swenson, president of the National Farmers Union, an organization representing nearly 300,000 family farmers and ranchers. He's in Minneapolis, but we're having technical difficulties with the studio there.

Mr. Sumner, first of all, this talk about the plight of the family farm does have a somewhat familiar ring, certainly from the 1980's. Is it worse this time? Is there something new at work here?

DANIEL SUMNER, University of California, Davis: I wouldn't say it's new. It's new to some of the people that are facing it this time. Just because it's not new, of course, doesn't make it any easier for those folks. A number of the people -- and I think your piece made this clear -- a number of the people that are having a tough time this go-around weathered the 1980's. There are two or three things that make it less severe this time. One of the important ones is the strength in the non-farm economy, particularly the Midwest. Another is that we come off some very high prices in the middle of the 1990's. That didn't help everyone, but it helped a lot of people in the farm community.

MARGARET WARNER: Oh, and you said there was something else.

DAVID SUMNER: Well --

MARGARET WARNER: Well, let me just ask you this. The piece certainly suggested that the farms at greatest risk right now are the family farms. One, would you agree with that, and, two, how does one define -- what's the size of family farm versus a big Agra business concern?

DAVID SUMNER: Almost all farms in the U.S. are family farm, 90-some percent. So I don't even find that a useful distinction. About half the farms in the U.S. are part-time. And we had a few of the part-time farmers featured in that piece. Those are folks that make most of their living off the farm and still operate moderate-sized farming operations and in good years may make some money at it. The largest operations in farming, in fact, are really quite sensitive to profitability, just like any other investor. If they don't see profit in farming, they'll move their assets somewhere else. We saw that in the 1980's. We saw that at earlier periods when very large farmers, in fact, left farming. I would say, and again, you had someone on the piece that made this point, the farms that will probably have the strongest potential to stick it out are the ones that are moderate-sized family farms. You can't use acres to measure it because it differs whether they're growing strawberries or peaches or wheat in the Dakotas, but someone with gross sales perhaps in the million dollar range, perhaps less, perhaps more, depending on the commodity, who is solidly financed and is in a position to weather ups and downs. The other group that will weather this sort of a problem are, in fact, the smaller farms who rely on off-farm income. There may be one spouse working off the farm. It may be both spouses working off the farm. Those farms are going to weather.

MARGARET WARNER: I'm told we have Mr. Swenson. Mr. Swenson, if you're there -- yes, there you. Tell me your sense from where you sit in representing these farmers how serious the situation is now.

LELAND SWENSON, National Farmers Union: It's devastating. We're losing family farmers. I equate it to almost the Great Depression of the 1930's. And I say that because as we take a look at some new factors, one is we have a deregulated agriculture that came about because of the 1996 legislation, the Farm Act. Secondly, we've got trade liberalization, free trade so to speak. These are factors that we haven't seen for about 60 years that are really impacting the economic viability of family farmers and ranchers in this country.

MARGARET WARNER: And when you say deregulated agriculture, you mean that this so-called Freedom to Farm Act, this bill that was passed and adopted three years ago, basically is phasing out the guaranteed income or price supports, is that right, for farmers?

LELAND SWENSON: Well, I guarantee it phases out tools for which farmers could adapt to their operation and try to get the best return they could in the market. And it phased out a safety net mechanism for producers when there was volatility in the market. And we see volatility today created because of a number of factors. But we don't have the mechanisms, the tools within the structure of that legislation to enable the secretary to act in partnership with the farmers to try to survive.

MARGARET WARNER: Go ahead, Mr. Sumner.

DAVID SUMNER: All of that was partly accurate and mainly not. The amount of money transferred to agriculture is at least as large now as it has been, in fact, substantially larger for the last three years than it would have been under the previous legislation. Secondly, we have something called marketing loan programs that make direct payments to farmers when farm prices fall below a certain level. What we don't do is we don't tell farmers what they have to plant. We don't tell them that they have to leave some of their farmland idle. That's not a requirement anymore. And we don't have the government acquiring stocks. What we do instead is make payments. And we've been by any measure quite willing to make relatively large payments to farmers in the face of these low prices.

MARGARET WARNER: Mr. Swenson, the bill was supposed to move, I guess, farmers toward a more market-oriented approach. Are you saying that's really not possible for American farmers of a certain size or a certain production level?

LELAND SWENSON: Well, the economic situation is impacting producers of all sizes. But what the farm bill leaves out is tools to work with when we see global volatility of the magnitude that we've seen unfold in the last three years. The farm bill that was passed in 1996 was not designed to deal with the Asian collapse, with the collapse of the Russian market and what impact that would have on U.S. producers. It wasn't designed to deal with an arbitrary political decision made by the president of Brazil to devalue its currency. And so what we need to adapt within the positive structures that was pointed out, planting flexibility, that was included in every farm bill proposal that was considered by Congress in 1996. But what is missing is some fundamental tools for the Secretary to deal with when we see this magnitude of volatility.

MARGARET WARNER: Mr. Sumner, let me move you to even a broader look. Would you say that farming globally is changing, I mean, that this is a permanent kind of a change that American farming is going to have to get used to, greater competition, more productive farmers overseas, volatile markets in terms of for our exports?

DAVID SUMNER: Farming has been worldwide, if not the most productive, most rapidly changing industry, I don't know what would be. Productivity has been growing everywhere, especially in the United States. Farmers are better at their business now than they were a decade ago or two decades ago. But let's go back to the 1970's. We were competing with Brazil and Argentina then. We're competing with them now. We were competing with the Australians then. We're competing with them now. One difference now compared to the 70's and very early 80's was that Europe used to be market, and now they're a competitor. And that's not because of free trade; in fact, that's because of the opposite of free trade. It's because of still a very large trade restrictions and export subsidies in the European Union. So I probably come down on the side of saying more trade, not less is good for U.S. agriculture. I think we really are at least as productive as anybody else out there for almost anything the U.S. produces. So it's opening these markets. Now, whenever you have markets that are open, as they are for our major farm products say into Japan or Korea, then when their economies decline, we face a dip in the market. That is a fact. And volatile prices have been around for a long time. There's one other quick point I want to make.

MARGARET WARNER: Actually, let me get to Mr. Swenson briefly. We're just about out of time, Mr. Swenson. Yesterday, as you know, the Senate passed the $7 1/2 billion emergency aid package. They passed a similar thing last year. Is that going to be useful? Is that just a short-term measure? How do you see that?

LELAND SWENSON: Well, it's very short-term, just as last year bridged us into 1999. The action they took will bridge us into 2000. It did nothing to remedy the problems and the challenges that farmers face. And I would agree we want more trade, and we want to know what the rules of the trade are going to be. And I want to clear one thing up. He said that Europe wasn't a market. Europe continues to be one of our better markets. And yes, it continues to be a competitor. But I also want to emphasize, when we deregulated agriculture, we allowed it to become more concentrated. And, Margaret, it's less competitive for U.S. farmers today to find market options for what they produce than what it was three, four, five years ago.

MARGARET WARNER: Mr. Sumner, briefly, your thoughts on this emergency farm aid and on that whole concept.

DAVID SUMNER: Well, prices are low, and Congress has decided to really add money to the Freedom of Farm. That's what was done yesterday in the Senate. That provides some added income to certain farmers. It doesn't do anything for others. The freedom-to-farm payments are being made to a handful of commodities, the grains and cotton. It doesn't help the folks in the livestock business. There are other folks that are having a tough time at it. So it does a bit. It doesn't do everything. One thing we have to recognize is farming is always going to be volatile. It's a volatile business. It's a risky business. It's a tough business. So somewhere along the line, I think we have to decide whether or not we want the government to encourage people to be in this business with payments like this.

MARGARET WARNER: Okay. Thank you Mr. Sumner and Mr. Swenson. Thanks both very much.

LELAND SWENSON: Thank you.

ELIZABETH FARNSWORTH: Still to come on the NewsHour tonight, hospitals and the millennium bug, and police chiefs on Campaign 2000.

FOCUS - Y2K - THE MILLENNIUM BUG

ELIZABETH FARNSWORTH: The latest white House report on the year 2000 technology problem was released today. It said there would definitely not be a national catastrophe on January 1, but there are potential trouble spots in the healthcare industry. Tom Bearden reports.

TOM BEARDEN: This is the neonatal intensive care unit at the medical college of Georgia in Augusta. Nowhere is it more evident than here how dependent the healthcare industry has become on computer technology.

BARBARA MEEKS, Medical College of Georgia: Did he just get the ventilator off yesterday, or today?

SPOKESPERSON: Yesterday.

TOM BEARDEN: Barbara Meeks is director of inpatient care. She's concerned about Y2K, the popular acronym for the inability of some computer software and hardware to recognize dates beyond the year 1999. Most of the devices in this ICU have embedded microchips that could potentially stop working properly when the century turns.

BARBARA MEEKS: In all of our intensive care units, we're very concerned about the patients that will be here prior to New Year's Eve, because they have the majority of the technological needs that -- and equipment on, that we're utilizing with them for their patient care that have the microchip in there that could be impacted by Y2K -- particularly our ventilator, that help the -- in this unit, the little babies breathe, and these babies are very sensitive to their respiratory status. We've been contacting all our vendors for all of our different equipment to make sure that everything is Y2K compliant.

TOM BEARDEN: But even afterthree years and $20 million, there are still non-complaint devices in the hospital, like this $24,000 bedside monitor. Jim Young is director of the college's biomedical engineering department.

JIM YOUNG, Medical College of Georgia: Because when you advance the date from 1999 to year 2000 it defaults back to 1980. I can show you that. There's the July 21, 1999, and when you increase the date, it goes to 1980.

TOM BEARDEN: If it isn't fixed, the monitor will record false data. The hospital will install a free, upgraded microchip before the end of the year, but other biomedical devices couldn't be fixed and had to be replaced. For example, modern intravenous pumps use microchips to meter dosages, and some models would simply stop working when the date rolls over to 2000.

JIM YOUNG: This particular device -- which delivers IV fluids -- has a program in it for calculating drug dose. In that calculation you have to enter the patient's age. And certainly when you want to enter age, it includes a month, date and a year. And with the millennium bug, if you don't have a four-digit number, if it rolls over to 00, you have no way of knowing whether it's the year 2000 or 1900.

TOM BEARDEN: So it would throw the device haywire in terms of trying to calculate what the correct dosage would be?

JIM YOUNG: It would not calculate it.

TOM BEARDEN: As a result, the hospital had to replace all 525 of the $1,200 devices with new leased units.

DWAIN SHAW, Medical College of Georgia: What this represents -

TOM BEARDEN: Dwain Shaw heads the hospital's Y2K task force. He says there were literally thousands of such devices to be considered.

DWAIN SHAW: I guess everybody seems to think that Y2K is a computer problem. And if that's all it was, if that's all I had to worry about, we could have solved this problem in six months time. But it's not. It involves everything that has a computer chip embedded in it, everything that is date-dependent from a computer or an automated standpoint. So the magnitude of it becomes one that is so overwhelming that even today, I mean, five months away from the actual event itself, I still don't think people fully recognize how big the problem is, and what the impact left unattended could potentially be.

TOM BEARDEN: Hospitals all over the country are facing a similar challenge, and few of them are as far along as the Medical College of Georgia. The reason it's taken so long and so much money to deal with Y2K is the fact that computers control critical functions all through a modern hospital -- from patient records and billing, to running the elevators and heating systems. They even deliver medicine. Dr. Rusty May runs the hospital's highly automated pharmacy.

DR. RUSTY MAY, Medical College of Georgia: This is our picsus machine. It's kind of the brains of --and it's connected to all the nursing units where they have similar cabinets to these. What happens is the physician writes an order, we enter that in our computer system, check for allergies, drug interactions, appropriateness of dose, and once it's in the system, that computer talks to this computer and tells it that it's okay for the nurse to receive the drug. So the nurse will walk up into her unit, type in the patient's name, decide on the drug she wants and a drawer pops open and gives her access to that particular medication. It keeps a perpetual inventory, it bills at that time, and all that's an automated system which -- which we have to think through manual systems to handle all those, all those operations.

TOM BEARDEN: What that means is stafferswill have to fill out reams of paper for prescriptions, claim forms by the thousands, procedures that will take many more people and take far longer to complete. Not every healthcare provider has the resources available to institutions like the Medical College of Georgia. Rural clinics are believed to be the least prepared for Y2K. Janet Lasick is C.E.O. of Northeastern Rural Health Clinics in Lassen County, California. She says the clinics can't fall back on manual record and billing systems.

JANET LASICK, Northeastern Rural Health Clinics: With the volume of patient visits that we do, it's really not possible any longer to type all of these claims and send them out. And then when we did get paid, we wouldn't have a system to enter them into, so -

TOM BEARDEN: What consequences would there be?

JANET LASICK: In my mind, the consequences would be that the clinic would have to close. We don't have enough in reserves to keep operating. If you can't bill for your services, then there isn't any way to stay in business. That's where the revenue comes from.

CHILD: That tickles.

HEALTH CARE PROVIDER: That tickles?

CHILD: Mm-hmm.

TOM BEARDEN: Lasick says if the clinics close, people here would be forced to go to far more expensive hospital emergency rooms, or travel up to 100 miles for alternative care. She says the State of California has been pressuring clinics to upgrade their computer systems, but has offered little financial assistance. Lasick believes that puts the more than 2 million Californians served by 515 community clinics at serious risk.

JANET LASICK: This isn't just a couple of clinics that have this problem. This is an industry-wide problem, and they're just now getting to it. But this is now the second half of 1999, and if you haven't really made arrangements so far to take care of this and at least gotten a date to have your upgrade done, you're really behind the eight ball, and it may be likely that you will not have it done this year.

TOM BEARDEN: The Lassen County Clinic has scheduled an upgrade for its computer system, but has to raise $80,000 to pay for it first. Big city hospitals that serve the medically indigent are also worried about getting paid for their services. 90 percent of all billing for federal programs such as Medicare and Medicaid claims is done electronically. Washington says the government's computer systems are fine. But the Medicaid program for the poor is administered by states and sometimes even by counties. A General Accounting Office study indicates that serious Y2K problems at that level may prevent providers from being compensated for Medicaid patients. For most hospitals, the single biggest Y2K fear is something they can't control-- a utility failure. Most hospitals have backup generators, but can't cope for more than a few days if the water supply fails.

MARY ELLIMAN: Just a quick suction, and then we're going to go right back outside, I promise.

TOM BEARDEN: Such failures would have even more impact on what some hospital administrators refer to as the hidden vulnerable population, people like Mac Elliman. The 13-year-old has Muscular Dystrophy, and he's dependent on several medical devices installed in his home in the Denver suburb of Englewood, Colorado. Mac's mother, Mary, says the devices are critical to keeping him alive.

MARY ELLIMAN: That's the suction machine that stays stationary and that obviously is plugged in. And that's his ventilator that he is on at night. That has something that is called an oxygen concentrator and a compressor, which is in the other room, that both run off electricity. That's his oxygen tank that we use when he's in bed and also that we use to fill the portable that he's got.

TOM BEARDEN: No one really knows how many people receive health care at home or in nursing homes that don't have backup generators. So a consortium of Colorado hospitals is taking a census of how many people like Mac Elliman might be forced to show up on their doorsteps because of power or computer chip failures. Other regions have yet to take such extensive precautions.

HEALTH CARE WORKER: We would go back to a manual system. We would take the blood pressures, record them every few minutes --

TOM BEARDEN: As the clock ticks down to the new century, medical groups and organizations are preparing as best they can. Georgia Medical's Chief Operating Officer, Richard Bias, says there's nothing to fear if adequate precautions have been taken.

TOM BEARDEN: A lot of people are wondering, what's exactly going to happen to hospitals on December 31. Are people going to die because of this?

RICHARD BIAS, Medical College of Georgia: I'm very comfortable that there's an extensive level of preparation. I can't speak to the work that's been done elsewhere, but knowing that this is doable, I see no reason for anybody to expect that kind of problem or to be fearful.

TOM BEARDEN: But Georgia Medical's Dwain Shaw is the first to admit that the medical community won't know if they've thought of everything until midnight, December 31st.

TOM BEARDEN: How do you know there's something out there you didn't think of?

DWAIN SHAW: I would never even take that bet, because I know there's something out there that we didn't think of, and it's not going to be because we didn't try our dead level best, the thousands, hundreds of thousands, of millions of people. There is something that's going to fail. I don't think it's going to be a catastrophic failure, but something will fail.

TOM BEARDEN: And that means that many of the nation's health care workers will be celebrating the dawn of the new millennium on the job, standing by for the unexpected.

EMPHASIS - ELECTION 2000 - CAMPAIGN AGENDA

ELIZABETH FARNSWORTH: Finally tonight, another special emphasis discussion about what issues the 2000 presidential election should cover. As you regular viewers know, we are asking a variety of individuals and groups that question. Terence Smith has tonight's session.

TERENCE SMITH: Tonight we talk with five police chiefs from around the country. Joining us are Gregory Cooper of Provo, Utah; Ellen Hanson of Lenexa, Kansas, a suburb of Kansas City, Missouri; Richard Pennington of New Orleans, Louisiana; Robert Duffy of Rochester, New York; and Reuben Greenberg of Charleston, South Carolina. Welcome to you all. We appreciate your views on law enforcement issues, but other issues, as well.

Robert Duffy, let me start with you. And ask you: what would be at the top of your list of the things you want to hear the presidential candidates discuss and debate?

CHIEF ROBERT DUFFY, Rochester Police Department: If I had to pick one topic that would be at the top of my list, I would have to focus on the issue of drugs. Drugs impacts every community across this country, but here in Rochester, it is at the forefront of a majority of all of our problems, crime and quality of life issues, and I just feel in the last several years, we have failed nationally and locally with how to deal with drugs. Enforcement has to be a high priority, but also education, prevention, and especially treatment has to be given just as high a priority. And that treatment has to be available for those who cannot normally afford it. In terms of the actual drug enforcement itself, we also have to look at a way that we can draft our policies so that asset forfeiture does not become a business and does not drive our enforcement and our local and national policies. And my feeling is that if we are going to be the world's policemen, then I think we have to learn how the police our local communities first and drugs has to be at the forefront of what we face across this country.

TERENCE SMITH: All right. Ellen Hanson, in Lenexa Kansas, what would be at the top of your list?

CHIEF ELLEN HANSON, Lenexa, Kansas, Police Department: Well, I think one of the issues that we all have to be concerned about is the issue of violence, and specifically in light of a lot of what's going on around the country everywhere gun violence and school violence would have to be at the top of everyone's list. Even though we read recently about statistics that say that violence at schools is going down, we have seen from about 1993 that there is a pretty regular cycle that goes a year when we don't see a lot of that activity. The next year we see a big increase. So I think we need to be prepared to deal with more of those types of issues.

TERENCE SMITH: Gregory Cooper, we've heard about drugs, about violence, what would be at the top of your list?

CHIEF GREGORY COOPER, Provo Police Department: Well, I certainly concur with what has been said so far. But I think as we consider each of those issues, and there are a number of issues out there, that we need to focus on enhancing our ability to work together. I think one of the weaknesses that we share within law enforcement with about 17,000 different law enforcement agencies in the country is our inability at times to communicate, coordinate and cooperate with each other. I think that as we work together, we coalesce our resources, our talents, our education. We find that we work more effectively, more efficiently and they are much more successful resolving very, very serious issues, particularly violence and drugs per se. We started a major case task force in Utah County, for example. We've got about 20 different agencies represented, both at the local, the state, and the federal level. And as a result of that, in the last two years, we've seen significant declines in a number of different criminal areas that were concerning us. And consequently, we're absolutely convinced that as we work more closely together, we'll see greater enhancement of our resource, but certainly our ability to cope with the issues that are out there.

TERENCE SMITH: And you'd look to the federal government to provide that kind of coordination?

CHIEF GREGORY COOPER: Not the coordination per se, but the support and resources particularly. When I say support, I'm talking about membership of those task forces and also monetary support. And in our particular case, we have several thousand dollars that has been contributed to our task force that has made an extreme difference. So we're working very collectively together, very cooperatively, and we're coordinating our resources and solving crimes that had been unsolved for years before.

TERENCE SMITH: Chief Greenberg, what's your perspective from Charleston?

CHIEF REUBEN GREENBERG, Charleston Police Department: Well, I think there are really about three issues that are very, very important that I'm primarily concerned with. One thing I think, and we've seen a lot of this in the last couple years, I believe that our military is just stretched too thin. We need to do more with expanding the Navy, the Army, the Air Force, the Coast Guard, various other kinds of law enforcement agencies to do the job they have to do around the world. The other thing I'm very much concerned about, and that is if educational system, particularly as it relates to inner city youth. We're way behind and it seems that we're falling further behind. Finally, the terrible situation that occurred in Atlanta, I think that if there's anything, any benefit to that situation or something we can learn from it is that we have serious problems with violence in our country, not just with the Littleton, Colorado's and the Pearl, Mississippi's, and the Springfield Oregon's with respect to the youth. This problem extends to all levels in our society, even to adults. We need to have a comprehensive assessment with what we need to change and what we need to do with respect to violence throughout all age groups in our country.

TERENCE SMITH: Chief Pennington in New Orleans, yours is the largest department represented by this group. What would be on your list?

CHIEF RICHARD PENNINGTON, New Orleans Police Department: Well, I think here in New Orleans we really are concerned about the abolishment of the COPS office I think in the year 2001.

TERENCE SMITH: By COPS you're talking about the federal program of community oriented policing?

CHIEF RICHARD PENNINGTON: Absolutely. The COPS office has put additional 100,000 police officers throughout the United States. We've been very -- been the beneficiary of having additional police officers here in New Orleans. We dramatically reduced our crime, violent crime by over 50 percent. And so we have some concerns about the cooperation from the federal government in making sure that we continue to get technology. We were able to get $1 million worth of computers put in our police cars. We were able to get additional training for our officers. And those are the concerns that we have, making sure that we can maintain that momentum to continue throughout not just in New Orleans, but throughout the United States. I think many police departments have benefited from those additional police officers on the street and also the funding from the COPS office.

TERENCE SMITH: And are you concerned that the federal government is going to, in effect, declare victory and quit?

CHIEF RICHARD PENNINGTON: Well, I hope that they will not declare victory. I mean, we still have a long ways to go. We've had some significant decreases here in this community and this state. But clearly we have not won the battle. And I think when you look at other police chiefs throughout the United States, they will probably say the same things. We have all had some significant decreases, but we still have a drug problem in this country. And we still have a violence problem. And we have an educational problem we need to address. And those are the issues that we're concerned about here in this community.

TERENCE SMITH: Okay. Chief Duffy in Rochester, I wonder, we now have some ten contenders for the Republican nomination and two at least for the Democratic nomination. Are you hearing any of these issues debated in this campaign so far, the issues you've raised and those your colleagues raise?

CHIEF ROBERT DUFFY: I have not specifically heard those issues raised yet. But I think the one point of advice that I would make is that the candidates in both parties should listen very closely to the issues that impact the local levels. And I would agree with my colleagues, we have a variety of issues that face us, and we need a national level of support. And we need to have a program in place that establishes some form of national standards for performance, funding, communication, and all the mechanisms that we need at a local level to impact crime and violence. But they have to listen at the local levels. Just as we as police chiefs go out into our neighborhoods, we listen to our community leaders and our residents because they can drive what we need to do in terms of policy. That is just one small portion of what we have to do on a national level. The answers lie locally, but I think funding and support obviously lies at a much higher national level.

TERENCE SMITH: Ellen Hanson, what optimism do you have that you're going to hear some of this debate?

CHIEF ELLEN HANSON: Well, sometimes it gets difficult to be optimistic in our business just in general, but I do think that when you hear some of the issues that my colleagues have spoken about today as far as coordination, one of the real keys is to try to speak with a united voice. And in this day and age of technology and information sharing, we try to use that to our advantage and hopefully we can have an impact if we work together. I think the one thing that we also have to be aware of is in this age of technology, that one of the issues we should be concerned about is the great propensity and opportunity for the criminal use and misuse and abuse of all those systems. And hopefully some of the big cases that have come to light nationally will help focus some efforts at getting control and having someone take responsibility for who is going to be responsible for managing some of this technology.

TERENCE SMITH: Chief Cooper, traditionally law enforcement is a local issue and administered locally. Yet this is of course a presidential campaign. Where do those two intersect, in your view?

CHIEF GREGORY COOPER: Well, again, go back to the concept of coordination and cooperation with one another. I've had the opportunity to work as an F.B.I. agent for approximately ten-and-a-half years and was a police chief before becoming an F.B.I. agent in a very small town and now a police chief in a medium-sized town. But I've always recognized that we work most effectively when we're working with each other, not in competition with each other and certainly not against each other. And I think typically that's the spirit. The spirit is of cooperation. Yet at times because of the different policies and procedures, the political agendas, et cetera, personalities, all those things affect how effectively we work with each other. And when it comes right down to it, it's the relationship that's established at the local level with the state, the county, as well as the federal. So once those personal relationships are established, we see things really go sailing very smoothly.

TERENCE SMITH: Chief Greenberg, you spoke about military capacity and readiness. Was that a reflection of a view that it's been drawn down too much?

CHIEF REUBEN GREENBERG: I think our difficulty is that we have a lot of things we want to do around the world and a lot of different venues and that these things for the most part are worthwhile, things that ought to be done by somebody. The rest of the world doesn't seem to be oriented in that regard. We are, and I think that's a good thing, but we have to have the military in sufficient numbers in order to accomplish these worthwhile goals.

TERENCE SMITH: Richard Pennington, what is your reaction when you hear your colleagues talk about these other issues which have focused mostly on law enforcement? What's your view?

CHIEF RICHARD PENNINGTON: Well, I agree with what all my colleagues have stated. But I'm a member of a the Major City Chief's Association, also the International Chiefs of Police, and believe me, my colleagues will be focusing on the next presidential election because we have some concerns that will impact law enforcement throughout the United States. And we want to make sure that the candidates hear us loud and clear, because we want to make a difference. We are here to serve the public and the community. And we want to make sure those candidates hear our concerns, because crime is still a problem. We have to look at the next population of young people, juveniles, which will be a problem in the future. And we have to start talking about youth focus policing and start focusing our resources on the youth of tomorrow. And so those are big issues and concerns that we're going to have to address.

TERENCE SMITH: Okay. Thank you all very much.

RECAP

ELIZABETH FARNSWORTH: Again, the major story of this Thursday: The House approved the final version of the Republican tax cut and the Senate was expected to do so tonight. We'll be with you online and again here tomorrow evening, with Shields and Gigot, among others. I'm Elizabeth Farnsworth. Thank you and good night.