The NewsHour with Jim Lehrer

JIM LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight, NAFTA after three years, we have a Charles Krause report and a debate; Jeffrey Kaye looks at the Mars rover; Mark Shields & Paul Gigot analyze the Senate money hearings; and David Gergen talks to novelist Ward Just. It all follows our summary of the news this Friday. NEWS SUMMARY

JIM LEHRER: U.S. wholesale prices fell in June, setting a 50-year record. The Labor Department reported today the drop was .1 percent. The Producer Price Index has now gone down six months in a row. The news was greeted by economists on Wall Street as further evidence inflation was no problem. The stock market reacted upward. The Dow Jones Industrial Average closed up 35 points at 7921.82. NAFTA has had a modest positive impact on the American economy. That's according to a report required by law and sent to Congress today by Clinton cabinet officers. They said the North American Free Trade Agreement had also benefitted Mexico's economy and its environment. U.S. Trade Representative Sharlene Barshefsky said NAFTA has been good for American workers, companies, and consumers.

SHARLENE BARSHEFSKY: In 1996, our exports to Canada and Mexico supported 2.3 million U.S. jobs, up 311,000 since the NAFTA was signed. And in the first four months of 1997, 53 percent of the growth in our global exports is with Canada and Mexico. Over half the growth in our global exports this year is with Canada and Mexico.

JIM LEHRER: NAFTA opponents criticized the report. House Democratic Whip David Bonior said it did not count many workers who have been laid off or forced to take pay cuts. We'll take our own look at NAFTA right after this News Summary. The House voted today to end funding for the National Endowment for the Arts. They struck the final $10 million from next year's budget for the agency and rejected a proposal to replace the funding with a system of block grants to the states. The action is part of a larger spending bill that must pass the Senate before going to President Clinton, who's expected to veto it. On Mars today, the rover remained hung up on a rock nicknamed "Yogi." NASA scientists failed to free the rover because a radio signal ordering it back up was faulty. Officials blamed it on human error. The rover has been trying to place an X- ray instrument against Yogi to study its composition. We'll have more on the rover later in the program. In the Serb section of Bosnia today security was increased around former and current leaders, who are suspected of war crimes. It was seen as an effort to stop NATO peacekeeping forces from seizing them. Yesterday, British soldiers arrested one Serb and shot to death another, who reportedly resisted arrest. Russia objected to that action, prompting a reply from State Department Spokesman Nicholas Burns in Washington.

NICHOLAS BURNS, State Department Spokesman: If the Russians wish to associate themselves with the Serbs in Pale, Serbs, I guess that's their decision, but it seems to us that here you have the Dayton Accords, the Serbs and Bosnian Serbs sign on the dotted line to turn these indicted war criminals over. They didn't do it for a year and a half. You have these notorious people who are responsible for the worst human rights abuses in Europe since the Second World War, since Adolf Hitler, and the British go out and do something positive. We congratulate them. And we would hope the Russians would associate themselves with that kind of right thinking.

JIM LEHRER: The Senate today adopted a non-binding resolution urging the withdrawal of U.S. troops from Bosnia by the end of June 1998. President Clinton has already pledged to bring the troops home by then. There are nearly 8,000 American soldiers in Bosnia. In Romania today, President Clinton received a rousing welcome from the people of Bucharest. Thousands cheered him and the country's President in historic University Square. Some waved Romanian flags with a Communist emblem torn from the center. Mr. Clinton did not support inviting Romania to join NATO in the first expansion round this week, but in his remarks today he encouraged Romania to continue working for Democratic reform.

PRESIDENT CLINTON: NATO has committed to review aspiring members in 1999. Romania is one of the strongest candidates. And if you stay the course and manifest the love of liberty we all see here today, there can be no stronger candidate. Stay the course. Stay the course. The future is yours.

JIM LEHRER: Later today the President flew to Denmark, where he will end his European visit. German scientists said today they believed the Neanderthal was a different species than early man. They studied DNA extracted from a skeleton at least 30,000 years old and said it indicated Neanderthal split off from a common ancestor to man a half million years ago. The findings were published today in the journal "Cell." And at Camp LeJeune, North Carolina, the commanding general of the U.S. Marine base today recommended a gunnery sergeant be discharged for hazing. He was the highest ranking enlisted man videotaped at an initiation rite in 1993, a ceremony where Marines pound wing pins into the chests of new paratroopers. The discharge was the most severe punishment proposed in connection with those incidents. And that's it for the News Summary tonight. Now it's on to the NAFTA report, the Mars rover, Shields & Gigot, and novelist Ward Just. FOCUS - EVEN TRADE?

JIM LEHRER: The NAFTA story. Charles Krause begins with a look at what's happening on the Mexican side of the border.

CHARLES KRAUSE: Mexico's capital is brash, congested, and economically powerful. Its 20 million people make up about a quarter of the country's total population, and its factories produce everything from beer to chemicals to textiles, about a third of the country's total national wealth. So even though Mexico is a large and varied country, experts say Mexico City is a good place to evaluate NAFTA's impact on the overall economy. And the Ministry of Commerce and Industry here in the capital is a good place to begin. Commerce Secretary Herminio Blanco.

HERMINIO BLANCO, Minister of Trade: NAFTA has been extremely useful for our country. We have in this first two years of NAFTA increased substantially the dynamics of exports. And, as you very well know, our country went in '95 and '96 through a very difficult period after a massive devaluation. The export drive--and very importantly NAFTA--has been a very good part of the explanation of our recovery.

CHARLES KRAUSE: Has there been any down side to NAFTA for the Mexican economy?

HERMINIO BLANCO: My answer could be a little biased, but from my experience now as Secretary of Commerce and Industry of Mexico, I cannot see a sector in Mexico that has been injured by the opening that we have negotiated in NAFTA.

CHARLES KRAUSE: Not one?

HERMINIO BLANCO: Not that I know of.

CHARLES KRAUSE: In 1992 and '93, Blanco was Mexico's chief trade negotiator. Today he says NAFTA has been an unqualified success responsible for attracting some $26 billion worth of foreign investment to Mexico and keeping the country afloat during the worst economic crisis in its modern history, the so-called peso crisis that began in December 1994, less than a year after NAFTA took effect. But Congressman Adolfo Aguilar, one of the government's leading critics, disagrees. While he acknowledges that NAFTA has increased Mexico's exports, he says it has also sharpened economic, social, and regional differences within the country.

ADOLFO AGUILAR, Member of Congress: It has had very uneven impact on regions of Mexico. It has increased regional disparities. It has weakened the economy in certain sectors and strengthened in others, so we cannot make an overall assessment of NAFTA whether it was good or bad, and we have to look at NAFTA more in a regional or in a central way.

CHARLES KRAUSE: It's sometimes said that Mexico has two economies, the modern, industrialized economy centered in Mexico City, Monterey, and along the U.S. border, and the traditional economy that encompasses rural areas and most of the rest of the country. Literally, it's the export-oriented industrial economy that's benefitted most from NAFTA. But even here most neutral economists say there have been winners and losers. Mexican textiles is a good example of what's happened. NAFTA's critics in the U.S. had predicted that Mexican industries would be the big winners from free trade. But, instead, hundreds of Mexican textile companies have gone out of business, and thousands of Mexican workers have lost their jobs due primarily to cheaper textiles imported into Mexico from Asia and the United States. On the plus side those Mexican companies that have survived have had to become more competitive and more efficient. And like virtually all other industries in Mexico, they've had to begin exporting because free trade means Mexico is now part of the global economy. Idustrias Helostok in Mexico City is a good example. The company produces yarn and finished textiles used mostly by Mexican apparel companies to make shirts, trousers, dresses, and uniforms. Founded 50 years ago and still owned by the same family, Industrias Helostok never worried about exports before NAFTA. But today that's changed. The company now sells fully 10 percent of its production in the U.S., and that percentage is expected to increase in the near future.

CHARLES KRAUSE: So this is the new tensel fiber, correct?

BORIS GERSON, Factory Owner: Yes.

CHARLES KRAUSE: Boris Gerson, one of the owners, told us that Industrias Helostok will soon become the first textile company in Latin America to produce tensel, a new synthetic fabric that's currently produced only in Europe, Japan, and the United States.

CHARLES KRAUSE: What are your principal competitive advantages?

BORIS GERSON: Basically, we are more flexible. We are closer to the United States. We have quicker response. We can perform the same quality that the American market is getting from Europe, or from the Orient, and also the basic costs here are lower than Europe or in Japan.

CHARLES KRAUSE: The labor costs?

BORIS GERSON: Labor costs and probably in terms of Europe and Japan also energy.

CHARLES KRAUSE: It's been an article of faith among NAFTA's critics that Mexican factories would grab U.S. business and jobs primarily because of cheap labor. But at Industrias Helostok that's been only partially the case. Forced to become more efficient, Boris and his cousin, Mauricio Gerson have laid off workers, replacing them with expensive new machinery. They've decided that was the only way to produce yarn and textiles cheap enough to compete. In 1993, pre-NAFTA, the company had a total of 526 employees, but by the end of last year that number had been reduced by fully 20 percent. Yet, the factory is booming. Its automated looms and spinning machines operate twenty-four hours a day, seven days a week. And sales are up nearly 100 percent. But the transition wasn't easy. According to the Gersons, NAFTA has forced them to rethink their business and risk millions of dollars buying the new machinery.

CHARLES KRAUSE: If labor is so cheap here, why did your company decide to buy expensive new machinery?

MAURICIO GERSON, Factory Owner: If we stayed with the same machinery, we wouldn't get the quality that's needed today.

CHARLES KRAUSE: So you really have to have quality, as well as price, in order to succeed?

MAURICIO GERSON: Yes.

CHARLES KRAUSE: It's also been an article of faith among NAFTA's critics in the U.S. that Mexican factories produce cheaper products because they're not forced to comply with tough environmental standards comparable to those in Illinois or California, for example. But Mauricio Gerson wanted us to see his factory's million dollar water treatment plant, which he said Mexico City's government forced the company to install several years ago. Not even the Mexican government would argue that its enforcement record is yet equal to the U.S.. Nonetheless, Gerson says environmental enforcement in Mexico is increasingly strict. But from the Mexican government's perspective, the real marker of NAFTA's success is the fact that Mexican companies are now able to compete in the global marketplace. Indeed, Mexico's exports to the U.S. alone have grown by 80 percent since NAFTA first took effect in 1994. But the down side has been a severe drop in real wages for Mexican workers. At Industrials Helostok, for example, Alfredo Fuertes Cerezo is at the top of the wage scale, now earning about $100 a week. Yet, in real terms he's earning about a third less today than he was before NAFTA in 1993. Fuertes lives with his wife, his two children, and his baby grandson in the same two rooms he lived in alone before he was married twenty-five years ago. Out in the street children play while their parents keep an eye on them and on one another. Crime throughout Mexico City is rampant, made worse by high unemployment, lower wages, and growing poverty over the past several years. Yet, despite the drop in his standard of living, at least partially the result of NAFTA, Feurtes Cerezo told us he thinks Mexico is better off with free trade than it would be without it. That view is definitely not shared by Bertha Lujan, who heads a coalition of unions, peasant organizations, and civic groups, mostly on the left, opposed to NAFTA.

BERTHA LUJAN, NAFTA Critic: [speaking through interpreter] I believe that Mexico is worse off now than before NAFTA and instead of helping us overcome our problems, NAFTA has made them worse.

CHARLES KRAUSE: Specifically Lujan says that NAFTA perpetuates the low wages and high unemployment and encourages the kind of financial speculation that led to the 1995 peso crisis. Congressman Aguilar agrees and says NAFTA should be renegotiated.

ADOLFO AGUILAR: We are not advocating the abrogation of NAFTA; we are advocating the two countries to sit down and then show the United States new areas for expanding corporations that it will have impact in problems that the United States wants to resolve-- two fundamental: migration and drugs.

CHARLES KRAUSE: Still, NAFTA's critics are in a distinct minority. Opinion polls show that most Mexicans do not seem to blame free trade for the country's economic problems. That could be because they believe NAFTA has made companies like Industrias Helostok stronger, while at the same time cementing Mexico's links to the world and particularly to the United States. Sergio Sarmiento is one of Mexico's leading political analysts. SERGIO SARMIENTO, Political Analyst: NAFTA is an instrument that opened up trade between two neighbors, and by opening up trade between two neighbors, trade has increased between the two neighbors, and NAFTA has created jobs on both sides of the border. I have no doubts about it. And certainly Mexico, those jobs have been extremely important because they're the only jobs that have been created in Mexico for the past two years.

CHARLES KRAUSE: It may be too early to fully evaluate whether free trade will prove to be advantageous for Mexico in the long run, but three and a half years after it first took effect, one thing is certain: NAFTA is far less controversial in Mexico than it is in the United States.

JIM LEHRER: And Margaret Warner picks up that debate on the U.S. side.

MARGARET WARNER: Today the Clinton administration issued its assessment of NAFTA's first three years, saying the trade agreement had a "modified effect" on the U.S. economy. Among the good news cited by the administration on jobs NAFTA has created 311,000 new export-related jobs, 122,000 in trade with Mexico, the rest in trade with Canada. On wages, NAFTA-related jobs pay 13 to 16 percent more than the national average. And on exports, U.S. exports to Mexico rose by 37 percent. Here to debate NAFTA's impact are Mickey Kantor, Former U.S. Trade Representative, and Commerce Secretary, who helped negotiate NAFTA--he's now an attorney in Washington; and Thea Lee, Assistant Director for International Economics at the AFL-CIO. Ms. Lee, "the" most contentious issue when this country debated NAFTA four years ago was jobs. Labor said hundreds of thousands of jobs would be lost. Free traders said the opposite would occur. Many, many new jobs would be created. Who was right?

THEA LEE, AFL-CIO: Well, we think we were right, and if you use the same methodology that the Clinton administration and the Bush administration used during the NAFTA debate, which was to look at the swing in the trade balance and attach a job multiplier to it, our trade deficit with Canada and Mexico is quadrupled since we signed NAFTA in 1993.

MARGARET WARNER: What do you mean, a job multiplier? Tell us about jobs, if you will.

THEA LEE: Sure.

MARGARET WARNER: Well, I mean, our trade deficit has grown by $30 billion with Canada and Mexico combined. They had told us that we would have a trade surplus instead, but those imports that are coming in from Canada and Mexico at a much faster rate than the exports have grown are displacing American jobs. And it's happening in two ways: One is that U.S. companies are actually closing down their factories and moving to Mexico and some to Canada. And the other is that imports come in and displace American production.

MARGARET WARNER: So you're saying net job loss.

THEA LEE: About 420,000, using the same method that the Clinton administration and the Bush administration used during the NAFTA debate.

MARGARET WARNER: Net job loss?

MICKEY KANTOR, Former U.S. Trade Representative: No economist, no economist will tell you that imports cost you jobs automatically. Every export creates jobs. And let's talk about what's happened with NAFTA; three things that are very important. Positive impact on our economy; 311,000 jobs and increased exports to Mexico by 37 percent, in spite of the peso crisis, exactly the same way we increased our exports around the world, which has been an enormous increase to the United States worldwide over the last three years, the second global economy. We've taken leadership of the global economy. We've opened markets for U.S. workers, and third, most importantly, we have changed what has recently been one-way trade to two-way trade. What we've said is we want everybody to play by the same rules. That's exactly what NAFTA does, a combination of phasing into playing by the same rules, opening Mexico's market, create new markets for U.S. goods, keeps U.S. companies in the United States. It was one of Thea's allies, and as Ross Perot said, our aerospace industry would move, would move to Mexico if NAFTA was passed. The last time I looked, Boeing's still in Seattle.

MARGARET WARNER: Ross Perot also said there'd be a giant sucking sound of jobs going South. Do you think that was accurate, or is that overblown?

THEA LEE: Ross Perot was never representative of the critics of NAFTA. He didn't represent the labor movement. He didn't represent the environmental movement. Job sucking sound, yes. Jobs have moved out, and a lot of the same U.S. companies that promised they would be creating jobs for exports here in the United States have, instead, closed down their factories and moved to Mexico: Allied Signal, GM, a lot of --streamlined companies just moved down. They're moving their jobs--

MICKEY KANTOR: The big three in the last three years have invested $39 billion, 39 billion in the U.S. economy, only 3 billion in Mexico. I think that's about 13 to 1, if I'm not mistaken, if my math is correct. The fact is we are sending five times as many automobiles to Mexico today as we were before NAFTA started. We're sending more--may I just finish--auto parts. Before the peso crisis hit in '94, you know this and I know this, we had a $1.8 billion trade surplus for the first 11 months of 1994. And December 21, 1994, the peso crisis hit. We had a trade deficit in December, four hundred and--I think--about ninety-eight million dollars. And then, of course, it went South. That's really what happened here. But, in spite of that, two-way trade in NAFTA is at 44 percent increase in the first three years, which is more than two-way trades increase with every other country in the world. It has been a winner. Has it done everything that everyone wanted? Of course not. Not with the peso crisis. Does it need improvement? Yes, it does. Do we need to continue to work to make the rules fair and support American workers? Absolutely.

MARGARET WARNER: All right. Let me--since we can't get an agreement on jobs, let's turn to the other big issue, which was wages. Now, again, labor said it would depress wages, a downward pressure on U.S. wages because Mexican wages were less. Free traders said it would create a lot of new high-paying jobs. Was either side right? Were both sides right?

THEA LEE: What NAFTA does is shift the balance of bargaining power between workers and capital within North America, and what it does, it increased the mobility and the flexibility of multi- national corporations; makes it easier for them to take--close down the US factories and move to Mexico. It increases their bargaining power, and that they'll put downward pressure on wages. We hear it from our workers every day of the week. When they sit down at the bargaining table, they hear that threat of moving production to Mexico. So even the workers who have kept their job in the United States have had their wages cut and their benefits cut back by NAFTA. In fact, the median wage, the real median wage in the United States has fallen 4 percent since 1993, when NAFTA went into effect.

MARGARET WARNER: Is there something to that?

MICKEY KANTOR: Well, I don't understand. We know that median wage is going up. Hourly wage has gone up for the first time in over twenty years, but unemployment is at about the lowest rate it's been in twenty years; the misery index at the lowest it's been in twenty-eight years in this country. We're in very good shape, but NAFTA was the engine of destruction. It certainly has been very ineffective. The fact is fair trade agreements, which create a level playing field, which really serve our workers and serve our businesses, make America stronger, are good for the country. We need to take leadership. This is about are we going to take leadership or not; are we going to build our ties to a country where we share a 2,000-mile border with 94 million people, who are growing industrially--let me finish--and who have a growing middle class; and the answer is, of course, yes. It's good for the country.

MARGARET WARNER: But let me ask you this. I've got you two here, you're trade and economic experts. You don't even agree on what's been the impact on wages or jobs. What is a person at home to think, a person who's not an economist and not a trade expert? I mean, you would think those are very objective criteria.

MICKEY KANTOR: Well, let me make just one common sense answer, Thea. I'm sorry. I'll apologize. Just one--if Mexico had higher barriers to our goods and services before NAFTA and we had the lowest barriers almost in the world, other than Hong Kong, and they had free access to our economy, we have little access to theirs, and all NAFTA does is make the rules fair and lowers their barriers, why isn't that in our interest?

THEA LEE: That's a good question, and I'd like to answer it. And the point is that NAFTA is not and has never been just about reducing tariff barriers. It's also about changing the rules of trade and investment for the nation. I agree with you. NAFTA is about rules; and it's about whether they're fair rules or not. And our view of NAFTA is that it's not a fair set of rules; that it protects the rights of investors and patent holders to a much greater degree than it protects the rights of workers and the environment. And in that sense we can do a lot better than NAFTA, and we should not be extending this agreement until we can get those rules right. It is that shift of power. It is the lopsidedness of NAFTA that is important and that workers object to.

MICKEY KANTOR: Let me just say, that's a very interesting point. Without NAFTA, the rules would be even more unfair. We'd have no environmental agreement. If I just might, with the Border Environmental Commission, which approved sixteen projects, seven of which have been funded, which is beginning for the first time to clean up that border, which is a mess and everyone agrees, we have for the first time a trade agreement, a labor agreement, which begins to force countries to enforce their labor laws. Mexico has increased their enforcement officers by 250 percent since NAFTA went into effect. Has it solved the common cold and cancer? No, of course not. But has it made a positive impact on North America, on jobs in all three countries, and really helped our economies? Of course it has. That's an easy answer.

MARGARET WARNER: But she doesn't agree. She doesn't agree.

MICKEY KANTOR: But the fact is she's wrong.

THEA LEE: The alternative to NAFTA is not no trade. We've never wanted to stop trading with Mexico or Canada, and we value our colleagues in Mexico, our labor colleagues, our environmental colleagues, the citizens of Mexico. We think that that's very important. But the point is that the alternative to NAFTA would have been a different kind of trade agreement; that we could have gone more slowly. We could have put in stronger and more enforceful protections for labor and the environment, and that would have been a better world.

MARGARET WARNER: All right. Let me ask you both something else. If you look at whoever's figures I take--and you look in relation to the whole side of the U.S. economy, it is minuscule.

THEA LEE: That's right.

MARGARET WARNER: But the White House figures--the same thing. Why is this debate still so passionate?

THEA LEE: Because NAFTA is a symbol. It's a symbol of how we do trade policy, and it also is a model for future trade agreements. And everybody always used to say that.

MARGARET WARNER: Which is what the administration is talking about?

THEA LEE: We're goingto build on NAFTA, and so we need to get the rules right in NAFTA; we need to get them exactly right before we go on. But it's true. I mean, it doesn't make sense, if you think about NAFTA as lowering a couple of tariff barriers that were already pretty low to begin with, why did labor care, why did business care, if that's all it was about, but it wasn't. It was about how we do business, and whether we're on the high road, or the low road, whether we encourage U.S. companies that are having a hard time competing in the global economy, to respond to globalization by shutting down, by abandoning their American production facilities and going to where they can get low wages and lax enforcement of environmental regulations.

MARGARET WARNER: Why do you think it's still so passionate?

MICKEY KANTOR: Well, one reason they moved before was because it was no NAFTA and we didn't address those rules, which we did quotas, trade balancing requirements, high tariffs. They averaged 10 percent; they were very high in Mexico, but it's all the rules which keeping U.S. investment in and products and services out of Mexico. The Clinton administration had a very simple policy. We welcome the goods and services of others into our economy. We want the same access to their economy as well. We reached 200 trade agreements during the time on the first term of this administration. The President insisted each one was called a single undertaking like NAFTA and that we would have the same access to others' economy eventually as they had to ours. That's good for workers; it's good for our economy. It's exactly what Thea is talking about. NAFTA was the first major step in that direction.

MARGARET WARNER: All right. We're going to have to leave it there, both of you. Thanks.

THEA LEE: Thank you.

MICKEY KANTOR: Thank you very much.

JIM LEHRER: Still to come on the NewsHour tonight, more from Mars, Shields & Gigot, and novelist Ward Just. FOCUS - REMOTE CONTROL

JIM LEHRER: Jeffrey Kaye of KCET-Los Angeles has the latest from Mars.

JEFFREY KAYE: Like the silent films of old, the first moving images from Mars have been black and white, jerky, and without sound.

JUSTIN MAKI, Pathfinder Engineer: That particular movie was a 20 image movie, and it played about 40 times real speed.

JEFFREY KAYE: The pictures show a robotic, six-wheeled science lab, powered by solar energy and batteries, crawling over the Martian surface, sniffing out the chemical composition of dust and rocks, and leaving behind tracks that mark its journey.

HOWARD EISEN, Rover Engineer: This is our child. I mean, we have spent as many sleepless nights with this as most parents have with their children.

JEFFREY KAYE: As rover designers Howard Eisen and Ken Jewett consider themselves the proud parents of a successful child, we spoke in the so-called Mars Yard at the Jet Propulsion Lab in Pasadena, where they demonstrated a rover similar to the one on Mars.

HOWARD EISEN: And all along the way it's responsible for its own safety.

JEFFREY KAYE: A sophisticated navigation system allows it to recognize its own limits.

KEN JEWETT, Rover Engineer: This is basically the navigation and the hazard avoidance system. There's two--two cameras that act as a pair so we can get stereo images, and there are five lasers here that lay down a stripe across the terrain.

JEFFREY KAYE: The combination of cameras and lasers gives the rover a three-dimensional perspective.

HOWARD EISEN: If the rover finds an obstacle that it believes it cannot go over, it uses that to decide to avoid. And what it does basically is it simply moves away from the object, and then it looks again, and it keeps looking until it doesn't find the object anymore. And then it heads back towards its original goal.

JEFFREY KAYE: Things don't always go so smoothly. On Wednesday, the rover approached a rock to take a measurement, and one wheel went up on the rock. The rover has remained in that position because a transmission from Earth instructing it to back off was delayed. To survive on the frigid Martian surface the rover has special lightweight insulation. Without it, the rover could freeze up. Engineers had planned for the rover to perform for one week, but it should have a longer life span because of warmer than expected weather with lows around minus 100 degrees Fahrenheit.

JEFFREY KAYE: And eventually that's going to do it in.

KEN JEWETT: Yes.

JEFFREY KAYE: After how long?

KEN JEWETT: Well, they're quietly talking about this mission lasting a month.

JEFFREY KAYE: Quietly. You just let the cat out of the bag.

JEFFREY KAYE: No matter how long it survives engineers on Earth will continue plotting its itinerary using 3-D images. They transmit signals from JPL to the lander, which relays them to the rover. With its round high-gain antenna, the lander transmits signals to Earth twice a day. The signals carry computer code containing massive quantities of science and engineering information. William Green is in charge of JPL's image processing lab.

JEFFREY KAYE: The pictures arrive from Mars generally around 11:30, midnight?

WILLIAM GREEN, Image Processing Lab: Yes. It gets later and later each day because of the Mars day.

JEFFREY KAYE: And they come down in what form?

WILLIAM GREEN: They come down as digital data, as a stream of bits basically from the spacecraft.

JEFFREY KAYE: Included in that data stream are the images being broadcast and pointed around the world.

JEFFREY KAYE: When you and the other scientists look at the data, it is in this form?

WILLIAM GREEN: That's right. What we've done here is we've located an image in that stream of bits basically, and we've pulled the imaging data out, and we formatted hear for display. And that's one single image.

JEFFREY KAYE: After the pictures are processed, lab scientists piece together vast mosaics from single snapshots.

JEFFREY KAYE: And so this mosaic then is a composite of those individual pictures?

WILLIAM GREEN: That's right, yes. And you can see we've outlined the individual frames of each image. This is just one filter. If we're doing color, we'll have three sets of this, red, green, and blue.

JEFFREY KAYE: The scientists can actually process as many as 12 different color filters. The colors and their intensities offer clues to the chemical composition of the landscape. The binocular type cameras aboard the lander and rover allow the scientists to generate the three-dimensional images.

JEFFREY KAYE: This looks like a fuzzy mess to me.

WILLIAM GREEN: It does look like a fuzzy mess, but what you need to do is put these on, and what's going on here is we're showing your left eye the left image and we're showing your right eye the right image by using color filtering here. And you should be seeing in full three dimensions at this point.

JEFFREY KAYE: It's really remarkable, and I'm sorry we can't show the audience at home what we're seeing, but what we're seeing is cliffs and drop-offs and literally a landscape in full three dimensions.

WILLIAM GREEN: And here comes the Image Processing Lab.

JEFFREY KAYE: Today Green and other members of the Imaging Lab triumphantly displayed a giant 3-D panorama, a picture that can't be appreciated without the special glasses. Another imaging tool scientists are using to explore Mars is virtual reality, a technique that gives viewers the impression that they're stepping inside the picture.

CAROL STOKER, NASA: You have an image of the rover, and we can pop up the names of the rocks within the terrain model, and here's Yogi and here's Barnacle Bill.

JEFFREY KAYE: Yesterday's NASA's Carol Stoker showed a different perspective of Pathfinder's neighborhood known as Ares Vallis. The image can be rotated in any direction on a computer screen. Today, scientists released a color version featuring a virtual reality fly-over. But even as scientists and engineers proudly display their accomplishments, and show off the hardware they say has made the Pathfinder mission a success, the next generation of Martian explorers is being readied. With the confidence of a car salesman demonstrated the latest model, JPL's Richard Volpe brought the newest rover into the Mars Yard. This new improved version is scheduled to go to Mars in 2001.

RICHARD VOLPE, Rover Engineer: This is another new feature, is an arm. This arm has four joints in it, and it's designed to be able to grab rocks and scoop soil.

JEFFREY KAYE: This rover moves faster than the one on Mars. It has a more powerful on-board computer. It can travel further away from the Mother ship and can take better pictures.

RICHARD VOLPE: We are like a mobile lander in a sense. We have our own mast, and we move around, and we get panoramic images from every location.

JEFFREY KAYE: JPL scientists see themselves as modern day pioneers.

KEN JEWETT: You know, you look at the images, and you say, damn, you know, that's my hardware and it's sitting on Mars, and it's doing what it's supposed to do. I mean, there isn't anything better for an engineer than for that to happen.

JEFFREY KAYE: Near the Mars Yard, on a vehicle containing test equipment, there's a "Mars or Bust" bumper sticker. Engineers say they have an updated version. It reads, "My Second Car's on Mars." FOCUS - POLITICAL WRAP

JIM LEHRER: Shields & Gigot, syndicated columnist Mark Shields, "Wall Street Journal" columnist Paul Gigot. Mark, the Senate campaign finance hearings, your assessment after the first three days, sir.

MARK SHIELDS, Syndicated Columnist: Well, Jim, I think that for those who are looking for the knockout of the White House, those who are hoping it would bring Bill Clinton down to earth, that hasn't happened. Democrats were hoping they would dodge the bullet. Clinton folks got out of it without any serious bodily damage, but for those who really are hoping that after 25 years we'll get some real campaign reform, I think it was a disappointment as well. I mean, the case didn't seem to be made. It struck me that Richard Sullivan, the first witness, didn't--

JIM LEHRER: And the only witness so far.

MARK SHIELDS: The only witness. He didn't fit the bill of the heavy. He didn't look like--

JIM LEHRER: He was the former DNC, Democratic National Committee finance director.

MARK SHIELDS: Exactly. But he didn't wear the cufflinks and come in in a white on white shirt, look like somebody out of a road company of Guys and Dolls, as a lot of finance people do in politics. And I thought that the chairman of the committee, Fred Thompson, set the bar pretty high by saying Chinese penetration early. I mean, at that point--

JIM LEHRER: That was his opening--in his opening statement.

MARK SHIELDS: Opening statement. And so Iguess I was--I'm still hopeful but a little disappointed.

JIM LEHRER: Hopeful and disappointed, or what words would you use, Paul?

PAUL GIGOT, Wall Street Journal: Richard Sullivan, the witness, probably could have stood two hours, not two days of testimony. He did say some interesting things. He demonstrated, testified that there was an extraordinary amount of interest at the White House presidential level. Harold Ickes, a key White House political aide, by the President, himself, in hiring John Huang, the fund-raiser, who was in some ways at the center of all of this concern. That was interesting. There were other details that were there, but it was a pudding without a theme. And you have to have--to make this dramatic in an age of short attention span theater, which our politics is, you have to have a theme.

JIM LEHRER: Is that all their politics is? I mean, is it drama criticism now, rather than political and substance criticism?

PAUL GIGOT: I'll tell you, I'm really disappointed by our fellows in the press on this, because in many ways it was the press that put this story through scoops on the front pages and made this a news story. And now when you have Congress trying to fulfill one of its major constitutional jobs, which is oversight of the executive, and finding out what happened, we say it's too boring; it's too complex. We don't--so--and besides, our polls show us the public doesn't care. Well, our job is to write and explain it in a way that maybe they will.

MARK SHIELDS: Paul makes a good point, Jim. I would say that if there was a tactical error that was made by the committee, it was not beginning the hearings the first week in August. The committee had to be on television to tell that story. I think it's a terribly important story. I think the--

JIM LEHRER: It's hard to do it with clips.

MARK SHIELDS: It's hard to do it with clips.

JIM LEHRER: With sound bites.

MARK SHIELDS: And C-Span, which has become the cable channel of record, is committed to carrying both the House and the Senate. Well, the House and the Senate this week were having very important and long sessions and a lot of key votes. And so when you start the replay at midnight and you're playing to chronic insomniacs and a few folks in Portland, Oregon, I mean it's tough.

JIM LEHRER: Paul, what about Mark's point about Thompson beginning with this opening statement about China? A lot of people said, hey, what's he up to? He issues a statement, then he says, I'm sorry, it's all classified; we can't talk about it.

PAUL GIGOT: I thought it was strange and frankly the reverse of what the real problem is. He said the problem is China was trying to influence American politics. That's not news. Taiwan tries to influence American politics; Israel. A hundred and fifty countries- -

JIM LEHRER: Long list, long list.

PAUL GIGOT: The problem is--

JIM LEHRER: And we try to influence their politics.

PAUL GIGOT: That's right at some time--

JIM LEHRER: We're all in the game of influencing each other's politics.

PAUL GIGOT: The question is, the more fundamental issue is, why are--was our foreign policy for sale? Why were we available, if we were, to be purchased or influenced? And so it's our problem, not their problem, and in a curious reversal and frankly put the bar very high, as Mark put it, to try to prove espionage on the part of the Chinese, how are you going to do that?

JIM LEHRER: Yes. Mark, what's your critique of how the Democrats have played this so far, particularly Sen. Glenn, who's the minority ranking member of this committee?

MARK SHIELDS: Well, I mean, if the Democrats see their task in this, Jim, to keep, deflect criticism, body blows from the White House, then they succeeded this week. If they wanted to have the bipartisan hearing to really get some legislation written, as so many of them insist they do, I don't think their cause was advanced at all. But John Glenn brings to it a very special credibility and legitimacy because he hasn't been a partisan in the past, and, if anything, I mean, he showed himself to be a political skilled, more skilled political in-fighter this past week than most people have ever given him credit for. But at the same time, it strikes me that there's nobody emerging in this committee--and admittedly, it's early--as the Howard Baker figure, as the Lowell Wycker figure, as the Sam Ervin figure, sort of the person that says the national interest takes precedence over my party's well-being. I mean, I think you see the Republicans on the committee, by contrast, look like piano players at a house of ill repute. Oh, my goodness, these things are going on upstairs. I had no idea of that. I mean, Don Nickles of Oklahoma disingenuous, talking about making calls for government property for fund-raising, while he's out sending fund-raising, dunning letters to people to come to a big fund-raiser at Vice President Quayle's house. I mean, there's an awful lot of posturing going on here.

JIM LEHRER: Paul.

PAUL GIGOT: Hats off to one Democrat, I think. Joe Lieberman, a Connecticut Senator, is the one Democrat on that committee who is actually showing interest in finding out what happened. Every other one couldn't--

JIM LEHRER: Would you agree with that?

MARK SHIELDS: I give credit to Joe Lieberman. What Republican do you think is trying to find out?

PAUL GIGOT: Well, this is about trying to find out what happened in 1996. We'll get to Haley Barbour and the Republicans, believe me, and Mark will make sure they do, but the point is that if this is about finding out, as it should be, whether U.S. foreign policy was for sale, what was going on in 1996, you would think the Democrats on the committee would show some interest in it. Instead, what you've seen is John Glenn saying--trying to compare Haley Barbour, what he did, spending almost all of his introduction--

JIM LEHRER: Haley Barbour was chairman of the Republican National Committee who had--up until about a few months ago.

PAUL GIGOT: Who may or may not have raised some foreign money for a third rate think tank with the President of the United States, a sovereign power, to influence U.S. foreign policy towards China and Most Favored Nation status, and a variety of other things, you would think Haley Barbour was the commander in chief. There is no moral equivalence between the two and we shouldn't--and yet he spends his time making that argument, which is a very cynical argument, because he knows the public out there is cynical about politics, and he plays right into that.

JIM LEHRER: And you're saying--so what's the message when he does that?

PAUL GIGOT: The message is the President isn't a problem; we're all the problem. Everybody's crooked, so ignore the details and ignore accountability.

MARK SHIELDS: And the fact of the matter is that the system stinks. The soft money stinks; $600,000 contributions stink; and they stink, and there was more soft money raised by the Republicans than there was by the Democrats. And what Bill Clinton and Al Gore did was beyond anything that's been done in my lifetime since Richard Nixon. Make no mistake.

PAUL GIGOT: I agree withthat.

MARK SHIELDS: But the Republicans have been at this, and to pretend, to sit here and pretend that somehow it was one party and Bill Clinton and Al Gore in 1996 is just begging the truth.

PAUL GIGOT: But that's not the point I'm making. The point is that we're going to get to Haley Barbour-- MARK SHIELDS: It isn't a question of getting to Haley Barbour. It's the system is full of pollution.

PAUL GIGOT: But, wait a minute. If the system is--if this is only about campaign finance reform, then the question how your government behaves gets off the table, because then we're looking toward the future. We've got to find out what happened--

JIM LEHRER: In other words--

PAUL GIGOT: --before we can know how to fix it.

JIM LEHRER: --the system made me do it is the Democratic defense.

PAUL GIGOT: If everybody is responsible, then nobody's behavior is responsible.

JIM LEHRER: What about the specific question of John Huang? On the table, should he be granted immunity so he can testify, what's your view of that?

PAUL GIGOT: It was a very sly request because what he said is basically, grant me limited immunity basically on those things that I'm likely to be charged with, if I'm charged, but not on espionage, which is virtually impossible to prove in any case. So I think the committee was right to say wait a minute, we've got-- because Joe Lieberman put it well at the end of a debate on this in the hearing when he said, look, it's one way to stop this kind of behavior is to have reform, but another way is to punish people who actually exceed the boundaries--to be accountable for their own behavior. And that means if you have to prosecute, if they warrant prosecution, prosecuting them, and that immunity would run the face of that.

JIM LEHRER: Mark.

MARK SHIELDS: Let me make one point clear. I am not defending, apologizing, rationalizing what the Clinton-Gore campaign did. I'm not pretending that anybody walks in who's ever been around a nun of any denomination and says that she's lived all her life and spent all those hours in prayer and deep concentration and charitable acts to raise $5,000 to give to a presidential campaign. No. But Jim, the key is a wonderful Jewish proverb--with money in your pocket, you are handsome, you are intelligent, and you sing well too. And that's exactly what the story is of American politics. Politicians and people who run for office, as John McCain said to me this week, the first thing you ask anybody who wants to run for office is, can you get the money, and he said that--

JIM LEHRER: Not what you believe.

MARK SHIELDS: Not what you believe.

JIM LEHRER: Not what you would do if you're elected.

MARK SHIELDS: What you like, what do you believe, what have you done--

JIM LEHRER: Who are you?

MARK SHIELDS: That's it: Can you get the money? And that's it, and that's the central--that is the message that ought to be delivered.

JIM LEHRER: Is that going to change as a result of the Thompson- Glenn hearings, et al hearings?

PAUL GIGOT: No.

MARK SHIELDS: I'm still hopeful. I really think there's going to be--through the efforts of people like Chris Shays, a Republican from Connecticut, and John McCain and Marty Meehan and Russ Feingold, I think there will be a vote on soft money this year.

PAUL GIGOT: Oh, there will be a vote.

MARK SHIELDS: And I think--I think--

JIM LEHRER: There will be a vote, he said.

MARK SHIELDS: I think we can get--I think we can get to it.

JIM LEHRER: Okay. We've got to get out of this right now. Bye. DIALOGUE

JIM LEHRER: A Gergen dialogue. Tonight David Gergen, editor-at- large of "U.S. News & World Report," talks to a novelist, Ward Just, whose most recent work is Echo House.

DAVID GERGEN: Ward, the critics have praised your new novel not only for its literary qualities but also for its insights into Washington, D.C.. Tell us about the culture of Washington.

WARD JUST, Author, Echo House: Washington is an interesting city. It's interesting because it's --it's only a capital. That's all it is. Unlike Berlin, unlike Rome, unlike Paris, or London, the larger culture is not surrounding it, about all it's got in common with these other great capitals is a river. Washington is just the three branches of government in this huge federal bureaucracy. In Paris, for example, where I lived for a while, the government of France is the minor part of Paris. It isn't--that isn't something that you think about very much. And when you go by the tube stop to the chamber of deputies, in fact, it's mostly empty. Nobody's getting on. Nobody's getting off. The effect that this has had on Washington is to isolate it very much, I think, from the larger culture in the United States, that coupled with the fact that we have such an enormous country the provinces are not crowded and upon it, as they are in other capitals. It makes it a peculiarly interesting place, and, therefore, one that it's worthwhile writing about, though it's fair to say that none of what we like to think of--of our greatest writers--with the exception of Mark Twain and Henry Adams--ever went near Washington, D.C., as a venue for their novels, not Melville, not James, not Hemingway, not Faulkner, not Fitzgerald, none of them. And that's a curiosity.

DAVID GERGEN: But you say in your book that it would actually be a very--we'd have a very different kind of government, a very different kind of country if Washington--if the capital had been in New York or Philadelphia, where it once was, for example.

WARD JUST: I think it would indubitably. It would, among other things, this tremendous self-regard that seems to have been built up in Washington--not to say arrogance over the--over particularly the last 20 years--would be really impossible in a place like New York or Chicago or Philadelphia. Too much else of consequence is going around, going on around it--the universities, writers, playwrights, musicians, artists, all of the national--all parts of the national life, other than just the government, the government in politic. This is a city of government and politics and very little else, just one little tiny fact that helps to pin that--the largest private employer in the District of Columbia is the "Washington Post" newspaper. It's got its own zip code.

DAVID GERGEN: I loved your line in your book that there's a secular religion in Washington and everybody belongs to it. They're called feds.

WARD JUST: Feds. It ought to be--I mean, it ought to be something that we're talking essentially about, the higher slopes of Northwest Washington. There is a huge, mostly under class, as we all know, in this city from the government. It's sort of an irrelevance. It has no meaning for the much, you know, kind of one way and another, but to the extent that Washington gets into the headlines, it's the Congress, the President, the Supreme Court.

DAVID GERGEN: And the press.

WARD JUST: And the press.

DAVID GERGEN: Now, you write about a generational fault line in America in the 20th century in Washington. And tell us about that fault line.

WARD JUST: I set up in the last chapter--I've got a group of men who--who begin the book as very young men and end it as very, very old men. And I called them the venerables. And I have them looking over this vast party at which the President of the United States and his wife are present, Supreme Court Justices and Senators, and mean little faces looking around, and of course, they're holding martinis. All the younger people, you know, have got little, you know, wine seltzers in their hands, and they're thinking of the city has a city of stupefying vulgarity, arrogance, and greed, where, you know, where once the important work was done in the shadows, was done outside. The more anonymous you were, the more you could get done. The situation is now the reverse. Where the coin that you had in the bank was celebrity coin, the more--the better you were known--the more people could see you, the more power you had, and then finally finding one of these venerables, and he said, cheap Charlies; all they want to do is balance the budget and not spend any money, keep things close to the vest so they can get elected once again.

DAVID GERGEN: But you seem sympathetic with the venerables. They have a larger purpose, you thought.

WARD JUST: I do. I am sympathetic with the venerables, but in this dialogue between the two I tried to deal--I did try to deal the cards as fairly as I could. And so I have one of the younger people there thinking, well, yes, well, that's all well and good, but who was it that brought us the Cold War, who was it that brought us--I think there's a line about first off Vietnam and fighting foolish on winnable wars and dubious insurgency, and what did all--what was the consequence of that, especially the Vietnam War? They broke the country. The country was bankrupt. There isn't any money in the Treasury. And so, therefore, you have to--do you have to do a lot less with a lot less.

DAVID GERGEN: When do you think that fault line occurred in politics? When did one generation sort of begin to leave off and the next one start, sometime in the 60's?

WARD JUST: Yes. I--I think after 1968 things were different. I think you might almost be able to pinpoint the minute, which is when Lyndon Johnson went on the television screen and announced that he was not going to run for office. And everybody knew that he had been driven from office. That directly paved the way, I think, for Richard Nixon. Watergate came, which was an event not quite like any other, I think, in our--in our history. And we are still in some strange way trying to feel our way. And that's what the back half of Echo House is trying to do. It really is trying to feel its way, I mean, with these--all these fictional characters, trying to see where it is that we've come particularly since 1968, and the dramatically changing culture, what I see as a dramatically changing culture in Washington, D.C..

DAVID GERGEN: And where do you think we've come? Final question.

WARD JUST: I don't think we quite know yet. I believe that things are on this sort of odd level, this strange level path, and you look down it and you say, well, what are the landmarks? It's very difficult for me to see a landmark. I don't think we're in a period where you can say, well, this has changed that, where you can see clearly some kind of path, and in the future, in a way the ship still drifts since 1968. No land in sight.

DAVID GERGEN: Ward Just, thank you very much for joining us.

WARD JUST: Thank you, David. RECAP

JIM LEHRER: Again, the major stories of this Friday, the Labor Department reported wholesale prices fell for the sixth straight month in June. The House voted--for the National Endowment for the Arts; and President Clinton said NATO troops had to arrest suspected war criminals in Bosnia to preserve the Dayton peace process. We'll see you online and again here Monday evening. Have a nice weekend. I'm Jim Lehrer. Thank you and good night.