The MacNeil/Lehrer NewsHour

MR. LEHRER: Good evening. I'm Jim Lehrer in Washington.

MR. MAC NEIL: And I'm Robert MacNeil in New York. After our summary of the day's top stories, we have a report from Haiti and a debate with a green light from the United Nations: Should the U.S. invade? next, extended excerpts from today's Whitewater hearing, and with one congressional health reform bill proposing a big expansion of Medicare, we have a report on how well that program works today, and finally a Jim Fisher essay about a man with a mission. NEWS SUMMARY

MR. LEHRER: Haiti's provisional president declared a state of siege today and said his country was prepared to fight against any foreign invasion. A U.N. Security Council vote yesterday authorized all necessary means to restore to power Haiti's ousted president, Jean-Bertrand Aristide. Senate Minority Leader Robert Dole said today despite the U.N. resolution, President Clinton must get support from Congress before taking any action.

SEN. ROBERT DOLE, Minority Leader: Before invading Haiti, the United States has checked in with the United Nations Security Council but I would also hope they check with Congress. They have the support of Nigeria, Tabuto, Britain, France, Russia, Argentina, the Czech Republic, New Zealand, Oman, Pakistan, and Spain. But they don't have the support of the American people. International support is fine, but it's no substitute for the support of Congress and the American people.

MR. LEHRER: Fourteen warships and twenty-four hundred U.S. troops are gathered off of Haiti's shores. We'll have more on this story right after the News Summary. Robin.

MR. MAC NEIL: The United Nations Children's Fund said today that as many as 50,000 Rwandan refugees have died from cholera and other diseases in refugee camps in Zaire. The first contingent of British soldiers headed for Rwanda today. They'll be setting up field hospitals and repairing the country's infrastructure in an attempt to get the refugees to return home. U.S. Defense Sec. William Perry returned from a weekend visit to the area. Twelve hundred U.S. troops today are helping in the aid effort. Perry said the number of U.S. military could rise to 3,000. He stressed the U.S. troops would not be engaging in any peacekeeping effort. He also said the effort to get clean water to the refugees was working.

WILLIAM PERRY, Secretary of State: We now have the capacity to produce a million gallons a day of pure water in Goma. There are still problems, however, in distribution and identified that the biggest problem in getting the water to the refugees now is improving the distribution system, and, therefore, we on the spot authorized the top -- as top priority getting water tankers moved in. And already yesterday, the first wave of water tankers arrived and more are due to arrive today. So as a result of that, I truly believe we have turned the corner in that desperate situation in Goma. But we're still not moving fast enough.

MR. MAC NEIL: Perry also said the leader of Rwanda's new government promised to protect returning refugees.

MR. LEHRER: The Senate Banking Committee resumed its Whitewater hearings today. Witnesses including representatives from the Resolution Trust Corporation and Treasury Department General Counsel Jean Hanson. The RTC officials denied any wrongdoing. They said no one in the Clinton administration tried to influence their investigation. We'll have more on the story later in the program.

MR. MAC NEIL: The Justice Department announced that U.S. marshals had been posted at abortion clinics around the country. The move was in response to violence at two abortion clinics on Friday. North Dakota, Florida, and Virginia clinics are among those being guarded. Attorney General Janet Reno would not disclose how many marshals had been dispatched or how long they would stay. The Ladies Center in Pensacola, Florida, remained closed today in the wake of Friday's double shooting. Police have charged an anti- abortion activist with the murder of two clinic workers. Senate Majority Leader George Mitchell said today he will unveil his health care reform bill tomorrow. Mitchell said his version would phase in universal coverage by the year 2000 but it would put off forcing employers to pay their employees' coverage until a voluntary system could be tried. Mitchell met with President Clinton at the White House this morning to discuss the plan. Afterwards, he spoke to reporters.

SEN. GEORGE MITCHELL, Majority Leader: In the past 15 years, excluding the elderly who are all covered under Medicare, the percentage of Americans who have health insurance has declined from 88 percent to 83 percent. That's an alarming, negative trend. Our first task must be to reverse that trend. Secondly, we want to go further and to extend health insurance to all Americans. That's our objective. The legislation I proposed will achieve that. If we can reverse it and get them up to 95 percent by the year 2000 and then have a means for going the rest of the way, I think it will be a huge and spectacular success.

MR. MAC NEIL: Mitchell says he expects a vote on the bill next week. After meeting with Mitchell, President Clinton flew to Liberty State Park, New Jersey, to greet an arriving bus from his health care caravan. Supporters on the bus traveled from Northeastern states to rally support for universal coverage. The caravan will arrive in Washington on Wednesday.

MR. LEHRER: Canadian negotiators agreed today to limit wheat imports into the United States for a year. U.S. Trade Rep. Mickey Kantor made the announcement. The United States had threatened sanctions on Canadian wheat if Canada did not curb its exports. Japan threatened to cut off trade talks with the United States today. The threat was delivered by the government's chief press spokesman in Tokyo. It followed a U.S. threat to impose trade sanctions on Japan if a bilateral trade agreement is not reached in two months. The U.S. wants Japan to open its markets to U.S. telecommunications and medical equipment. The Commerce Department reported today that personal income rose .1 percent in June. Consumer spending was up .4 percent.

MR. MAC NEIL: Striking bus mechanics and the Metropolitan Transit Authority reached a tentative agreement today in Los Angeles but workers will continue to picket until the agreement is finalized. The 1900 members of the Amalgamated Transit Union walked out last week. Drivers and clerks have honored the strike and hundreds of thousands of commuters have been affected. More than 1500 U.S. Marines and national guardsmen today began helping firefighters combat a forest fire near Entiette, Washington, which has already burned more than 90,000 acres. Another 1,000 army troops are training for deployment to fight fires in Idaho and Montana.

MR. LEHRER: And that's it for the News Summary tonight. Now it's on the Haiti debate, the Senate Whitewater hearings, how Medicare is doing, and a Jim Fisher essay. FOCUS - MILITARY OPTION

MR. MAC NEIL: First tonight, Haiti. The weekend vote in the United Nations Security Council authorizing a U.S.-led invasion to restore democracy increases the pressure on Haiti's military rulers to leave. It also revives the debate in Washington whether such an invasion is a good idea. We will join that debate in a moment after this report narrated by Louise Bates of Worldwide Television News.

LOUISE BATES, WTN: Just hours after the United Nations approved an American invasion of Haiti, commander-in-chief General Raoul Cedras sounded the warning bells. Cedras led the military coup and is one of America's main targets. Haiti's military leaders held emergency talks with the government. Cedras gave no direct response, himself, but is believed to be the man behind the state of siege. The official announcement was delivered by President Emile Jonassaint. In a degree read over state-run television and radio, he said Haiti was ready to repel any invasion. He described the U.N. vote as arbitrary, iniquitous, and a violation of international rights. In the marketplaces of the capital, Port-au- Prince, there appeared no open signs of panic but privately, many are preparing for the worst. Haiti is now completely cut off from the outside world. And off her shores lies the world's most powerful military force.

MR. MAC NEIL: Now three different views from Capitol Hill about what the U.S. should do next. Congressman Bill Richardson, a Democrat of New Mexico, recently visited Haiti and met with members of the military Junta. He's a member of the House Intelligence Committee. Sen. Richard Lugar, the Indiana Republican, is a senior member of the Foreign Relations Committee, and Congressman Major Owens, a New York Democrat, chairs the Haiti Task Force in the Congressional Black Caucus. Congressman Owens, President Clinton sought this green light from the United Nations. Now he has it, what should he do with it?

REP. OWENS: Well, I think this green light from the United Nations represents a giant step forward toward the building of a new world order which is really based on democracy and the preservation of human rights. And the President has a golden opportunity to demonstrate that the new world order will not tolerate criminals hijacking countries and holding people hostage. The people of Haiti spoke in an election. 70 percent of them voted for Jean-Bertrand Aristide as their president, and then they had the army come along and, and hijack the country. And this is the kind of criminal enterprise that's going on in a number of places throughout the world. I think the new world order ought to clearly establish the principle that it's not going to sit still and let criminals take over and run the country.

MR. MAC NEIL: But how should Mr. Clinton use this permission he now has from the United Nations?

REP. OWENS: I think he should go full speed ahead to let Mr. Cedras and Biamby and Francois know that we are ready to take action, we have the full support of the United Nations, and the American people in the poll have indicated that if you had a multilateral force and approval by the United Nations, the majority of people would certainly support the President. And I think he should, he should move full speed ahead to make this clear to the people who are holding the Haitian people hostage.

MR. MAC NEIL: Sen. Lugar, how do you think President Clinton should use this mandate, if that's it?

SEN. LUGAR: I think we have to establish first of all that if Congressman Owens' proposition is correct, the United States foreign policy is about to embark on a sharply different course. We have not invaded countries and established literally military rule on our own in restoration of democracy before. That may be an important proposition worldwide, as the Congressman is suggesting. But I doubt whether there has been much discussion of that in the Congress and certainly with the American people, and furthermore, in the past, if we've even contemplated such intervention, we would have used the Monroe Doctrine. Currently, President Clinton is trying to get authorization from the United Nations with many Latin American nations in that debate arguing sharply against that intervention. Finally, we've had to trade off with Russia a proposition that the big powers now will do the peacekeeping and do the invading. Russia will have authority to do what it needs to do in Georgia, which is close to it. In return, we will have the authority to invade Haiti, if that is our desire to do it and to pay for it and to try to control the situation thereafter. I think all of these steps are fraught with potential difficulty, if not some disaster. We should not invade Haiti. We should be involved in diplomatic negotiations trying to bring President Aristide into contact with the Haitians who might help him govern the country.

MR. MAC NEIL: And Congressman Richardson, how should President Clinton use this vote in the United Nations?

REP. RICHARDSON: Well, he should use it, as he correctly has been doing, as a lever, as pressure on Gen. Cedras and the military command. I think the President's policy is on the right course. Sanctions are biting. I saw that firsthand, including with the military. The refugee policy is working, the new refugee policy, less Haitians coming to the United States, Guantanamo Bay, operating efficiently safe havens. I do think that an invasion should be the course of last resort. If there is an invasion, it should be done multilaterally with the support of the United Nations. That has been done. My only hope is that, one, I think Sen. Lugar is correct -- there is great trepidation in this country about invading. I think we have to educate the American people. We have to have consultations with Congress. My hope is that we won't reach that stage, and I think the President's policy is clear. That is the last resort. Now we have the legal maneuvers to take that step, but I would think now Gen. Cedras and the military will come feeling this heat and saying, we're ready to talk, we're ready to talk about our departure, we're ready to talk about the succession under the Governor's Island Agreement, so I think I'm in-between my two colleagues. I think the President's policy is proceeding properly, but I would hesitate until the very end using diplomacy, mediators, the United Nations, the OAS, if we can get out of this without an invasion, without the obligations of a subsequent occupation, I would prefer to do it that way.

MR. MAC NEIL: Do you think Gen. Cedras and the others will not come forward and want to negotiate?

REP. RICHARDSON: I do think --

MR. MAC NEIL: Excuse me. I was just asking Congressman Owens.

REP. OWENS: When terrorists and criminals have hostages, they sometimes listen to reason and they give up. And sometimes there's something that sets in and they just refuse to, and you have to go in and get the terrorists and release the hostages. A whole nation is being held hostage. We train these people, Cedras and the whole Haitian army. We train them. We equip them. Until very recently, the CIA had some of them on their payroll. Here's a situation where the United States is basically responsible for what has happened, and we need to take care of the situation and let the Haitian people get their country back by removing the people that we really trained and put into place.

MR. MAC NEIL: What about the American people? You heard Congressman Richardson say there is trepidation. You heard Sen. Lugar's anxieties, and you also heard Sen. Dole say that having all this support from the international community doesn't mean it has the support of the American people?

REP. OWENS: I think the American people need to know more of the facts. They need to know the kind of misery being caused by the people who are in control of Haiti. Right now, they need to know that the United States has always dominated Haiti, from the time that it became a nation. We've always dominated it. We owe something to the Haitians in terms of giving them their country back, ceasing that domination. We should not take hands off now. We should first remove the evils that we created. We created that army. We trained that army. We've always permitted them from having other spheres of influence come in from France and from other countries. We need to let Haiti go. But Haiti is a special case that we need to set right before we turn it lose.

MR. MAC NEIL: Sen. Lugar, why are so many Republicans like yourself very reluctant to authorize an invasion of Haiti -- you just gave some of your reasons -- when Republicans were -- most of them -- most of you -- were quite, quite willing to approve the - - of course, after the event -- the invasion of Grenada, which was to avert the overthrow of democracy I guess you could say in addition to rescuing some American medical students? It was to stop a Marxist takeover of that island. What is the difference?

SEN. LUGAR: Well, at the time, President Reagan was invited by the leaders of the islands surrounding Grenada to try to bring some order to that area and clearly, the President responded affirmatively to that. I would say that that would be a close call. It was at the time. And President Reagan did not ask for prior approval. He invaded the country, and the -- that is the United States -- by polling of citizens approved of what he had to do. I think we learned, however, from that situation that we were not as well prepared as we ought to have been, that there were unnecessary casualties and foul-ups. And furthermore, by the time we came to a much bigger situation in Desert Storm, there were calls, quite properly, that the Senate and the House ought to vote on that issue, have an up front, public debate that the American people could witness before Americans were put into harm's way.

MR. MAC NEIL: Is -- Congressman Richardson, you're part of the Democratic leadership in the House -- is this a case where the President needs to get congressional approval before acting?

REP. RICHARDSON: Well, in my view, Robin, I think that there enough justifications, Panama, Grenada, where such an initiative is probably legally not required. But it would be very wise for the President to consult with Congress. It would be wise to prepare the American people to answer the basic question: Is Haiti a vital interest? I want to look a mother in Taos, New Mexico, in the eye in case we invade and her son is wounded, that we did this with proper justification. I would support the President if there was such a vote. I would do so, hoping that the invasion was the last resort. I hope we don't have to do that, and all I'm saying is we should give peace, diplomacy, let Cedras, Biamby, and Francois, who I think are feeling the heat -- I sense that -- to get out, to find a way that the international communities will, Latin America, the Caribbean. We don't want scars in our policy there the way we did with Haiti in 1915, and the Dominican Republic in the '60s. I think we want to resolve this peacefully. My point is that I think the President has prepared the groundwork for us to do this peacefully, and he's got multilateral support. The sanctions are working. The refugee policy, in my judgment, is under control after seeing it firsthand. I say now, let's play the course. Let's let the Haitian military leaders make the next step. And if they make the first step and it's serious and it involves their departure and it involves the return of Aristide, who I think, as Major said, was properly elected, got 70 percent of the vote, I think he could probably get 90 percent of the vote.

MR. MAC NEIL: Congressman Owens, do you -- first of all, do you think Mr. Clinton should go to Congress first on this occasion?

REP. OWENS: Well, I don't -- I don't think that President Reagan went to Congress when he invaded Grenada. I don't think Mr. Bush went to Congress when he invaded Panama. We just skipped over that one. I think the President should consult with the leadership of Congress, which is probably more than the two other Presidents did. We have a situation where mad dogs have been unleashed on the Haitian people, and we are partially responsible for that.

MR. MAC NEIL: You heard what Congressman Richardson said. He wants to be absolutely sure when he looks in the eye a mother in his district that if her son is wounded, that his blood is being shed for something important and significant. Many people have said an invasion of Haiti is not worth one drop of American blood. What is your answer to that?

REP. OWENS: Well, I think that's a racist statement. You know, the invasion of Haiti for --

MR. MAC NEIL: A racist statement?

REP. OWENS: -- good reason -- the situation is not even an invasion. The legal government of Haiti is in Washington. The head of the state is in Washington. We want to return the legal government. It's a military intervention to protect the legal government of Haiti. And the illegal government of Haiti is there because we made some blunders, and we helped to put that illegal government there. Soldiers who are professional soldiers join the army knowing that at some point they're going to be put in harm's way, and there will be risks. Those risks will be minimal in this case. The Haitian army has never fought anybody except the Haitian people. So I don't think we're going to have any great risk, but, nevertheless, violence should be always used only as a last resort. The last resort is approaching. We are approaching the last resort. The mad dogs will not leave. You must do something about the mad dogs that have been unleashed on Haiti.

MR. MAC NEIL: Sen. Lugar, where do you come down on this business that the situation in Haiti is not worth a drop of American blood as some Republicans have said?

SEN. LUGAR: I believe that Haiti is not a national security interest of the United States. I think there was a security interest in the case of Grenada. We were still in the Cold War period at that stage, and clearly, the problems of Cuba and Castro were there, the problem of the Panama Canal in Panama. In Haiti, the issue is restoration of Aristide, and supposedly, through him, democracy, but this has begged the question all along of who else beside Aristide might form a government, other than the United States military.

REP. OWENS: Who else was elected, Senator? Who else was elected?

SEN. LUGAR: And I would simply say that the thought by the Congressman, Mr. Owens, that we are responsible for the foul-ups of Haiti historically is astonishing. That is worthy of a debate all by itself, but I don't accept that for a minute.

REP. OWENS: I think you'll find a lot of scholars who will support, historians and scholars who will support that. The time of Thomas Jefferson was a great deal of worry about the fact that these black slaves had risen up, overthrown their rulers, and it might infect the United States. So we've always kept a tight cap on Haiti. We've always dominated Haiti.

MR. MAC NEIL: That really has to be another debate, gentlemen, because we've got to move on. Thank you all three. Jim.

MR. LEHRER: Still to come on the NewsHour tonight, Whitewater hearings, a Medicare report, and a Jim Fisher essay. FOCUS - THE SENATE'S TURN

MR. LEHRER: Whitewater hearings. Today was the second day the Senate Banking Committee explored contacts among officials at the Treasury Department, the Resolution Trust Corporation, and the White House. We have extended excerpts. Kwame Holman reports.

MR. HOLMAN: Testifying before the Senate Banking Committee this morning were current and former top officials of the Resolution Trust Corporation. It was the RTC that after investigating the failure of Madison Savings & Loan referred the case to the Justice Department for possible criminal prosecution. What these Senators wanted to know about was the chain of events that made that criminal referral known to the White House. The major link in that chain is Roger Altman, the Deputy Treasury Secretary who at the time was doubling as acting head of the RTC. This morning, former RTC Vice President William Roelle told the committee it was he who first alerted Altman to the Madison criminal referral and that Bill and Hillary Clinton had been named in that referral.

SEN. JAMES SASSER, [D] Tennessee: Now, Mr. Roelle, is it your testimony that in October of 1993, Mr. Altman told Ms. Hanson, the general counsel for the Treasury Department, in your presence to go tell Mr. Nussbaum, the counsel for the White House, about the press leaks that might be attendant to the proposed criminal referrals to the Justice Department?

WILLIAM ROELLE, Former RTC Official: I surmised that. He didn't say it that way, Senator. He instructed her to tell a number of people about the impending news release on this matter, and he mentioned the name Bernie along with several other names. He did not say Mr. Nussbaum.

SEN. JAMES SASSER: Well, Mr. Roelle, when it occurred to you that he might have meant Bernie Nussbaum, the counsel for the White House, what was your reaction? Did you think it was proper for Ms. Hanson to discuss this matter with Mr. Nussbaum?

WILLIAM ROELLE: It was a matter of a pending leak that the press had gotten hold of. I, myself, would have wished that there had been no contact at all with the White House, but I made no inference one way or the other about what was appropriate in terms of a press leak.

SEN. JAMES SASSER: Right. Did you make any attempt to contact either the general counsel for the Treasury Department, Ms. Hanson, or Sec. Altman, to tell them, in your judgment, it might be unwise or even improper for Ms. Hanson to contact Mr. Nussbaum and tell him about these referrals that might be coming?

WILLIAM ROELLE: I don't think that was the discussion. We weren't discussing the referrals. I had told Mr. --

SEN. JAMES SASSER: Excuse me. You were just discussing the press leaks.

WILLIAM ROELLE: Yes, sir, andit wasn't about the referrals specifically. It was the fact that the referrals were now apparently public information insofar as the press had them. And we had been told by inquiries from the press that it was likely to run in the next day's or the following day's newspapers.

SEN. JAMES SASSER: If these referrals were public knowledge, i.e., the press had them and you thought they'd be in the press the next day, what was wrong with -- in that instance -- the general counsel, Ms. Hanson, discussing with Mr. Nussbaum? Because they were going to be in the newspaper.

WILLIAM ROELLE: I don't recall ever saying that I thought there was anything wrong with it. I think that in most of these situations it's not a matter of right and wrong. It's a matter of - -

SEN. JAMES SASSER: Appearance?

WILLIAM ROELLE: To me it is, but I come from a long history of being a regulator and dealing with these matters in absolute confidentiality. And I, I didn't -- I think in my testimony to your staff I indicated I was making no judgments as to the ethics, standards, or to the law. It would just in my judgment have been better had nobody known about this.

MR. HOLMAN: Ellen Kulka is general counsel at the RTC.

SEN. RICHARD SHELBY, [D] Alabama: Mrs. Kulka, did Roger Altman or Jean Hanson ever ask you to brief David Kendall on the RTC's investigation of Madison Whitewater?

ELLEN KULKA, General Counsel, RTC: I received a call from Ms. Hanson where she told me that Roger Altman had requested that I call Mr. Kendall.

SEN. RICHARD SHELBY: Do you recall the date of this, briefly? Can you refer to your notes, or would you furnish it --

ELLEN KULKA: I believe that it was around February 3rd.

SEN. RICHARD SHELBY: Okay. Go ahead.

ELLEN KULKA: And asked me to advise him of the relationship between our potential asking for tolling agreements and the running of the statute of limitations on February 28th on the Madison matters.

SEN. RICHARD SHELBY: Did you brief David Kendall, the President's attorney?

ELLEN KULKA: No.

SEN. RICHARD SHELBY: Why?

ELLEN KULKA: Well, I told Ms. Hanson that I didn't think this was the appropriate time to do it because we had formed no conclusions about who might be eventually asked to execute tolling agreements or who might be defendants --

SEN. RICHARD SHELBY: Absolutely.

ELLEN KULKA: -- and that I thought at the appropriate time we would certainly enter into those discussions with attorneys for any possible defendants.

SEN. RICHARD SHELBY: What did Ms. Hanson say to that?

ELLEN KULKA: She said, "Fine, I'll tell Roger."

SEN. RICHARD SHELBY: And that was it.

MR. HOLMAN: This afternoon, it was Jean Hanson's turn. The general counsel of the Treasury Department made her first public statements on the role she played in contacts between Treasury and the White House concerning Madison Savings & Loan and the possible criminal case against it.

JEAN HANSON, General Counsel, Treasury: On September 27, 1993, RTC Senior Vice President William Roelle called to tell me that nine criminal referrals related to Madison were on their way from the RTC in Kansas City to Washington after which they would be forwarded to the Justice Department. I clearly understood from Mr. Roelle that the referrals and the information about them that Mr. Roelle imparted to me would be leaked to the press when the referrals arrived in Washington. A few observations are in order. First, before Mr. Roelle's unsolicited call, I had no prior knowledge of Madison, other than a news story that had appeared during the campaign. Second, my task,to alert White House Counsel Nussbaum to imminent press leaks so that he could deal with them intelligently, was entirely appropriate and necessary. The existence and the substance of the criminal referrals was leaked, and the administration did have to deal with the ensuing inquiries. Third, no preferential treatment or benefit was intended for anyone. And as far as I know, no one received preferential treatment. The President and First Lady were not the subject of any proposed governmental action. They were merely possible witnesses. It has been reported that Mr. Altman does not recall tasking me to advise Mr. Nussbaum of what the RTC professional staff believed would be imminent press leaks. In my view, the difference between Mr. Altman's and my recollections on this point is not significant. If I had thought it was inappropriate to brief Mr. Nussbaum, I would not have done it. I take full responsibility for the decision to do so. What I think is significant is that Mr. Altman and I agree that it was entirely appropriate to brief Mr. Nussbaum about the expected leaks.

MR. HOLMAN: Hanson also addressed the issue of Roger Altman's testimony before this same committee in February, when Altman failed to mention contacts between the Treasury and the White House in 1993.

JEAN HANSON: At page 69 of the printed record of the committee's hearings, the following question was asked and answered: Sen. Bond: "How was the White House notified of the referral?" Mr. Altman: "They were not notified by the RTC to the best of my knowledge." When this question was posed, I realized that there had been no consideration of this question in preparing Mr. Altman's briefing materials and that I had not thought about the fall events relating to the criminal referrals for many months. Although I remembered that I had spoken with Mr. Nussbaum about the referrals, I did not have a clear recollection of the meeting or of the events surrounding it. Listening to the question in a context of the questions that came before and after, it appeared that it related to RTC contacts with the White House about the criminal referrals. Moreover, Mr. Altman was asked and answered about the extent of his own knowledge. I did not know, sitting there, what he knew or recalled knowing. Without having the ability and opportunity to discuss this matter with Mr. Altman and others at Treasury, I did not believe that I could suggest to Mr. Altman there on the spot that he change his response.

MR. HOLMAN: Roger Altman will get another chance to respond before the Senate Banking Committee tomorrow. FOCUS - DOES IT WORK?

MR. LEHRER: Medicare is next. The House Democratic leadership's new health care proposal contemplates expanding the current system for the elderly and disabled. How well does Medicare work now is the question posed in this report by our Medical Correspondent Fred De Sam Lazaro of public station KCTA-Minneapolis-St. Paul.

MR. LAZARO: Among the many entitlement programs of the Johnson administration, none has proven bigger, farther reaching, or more enduring than Medicare, which brought health insurance to all elderly and disabled Americans.

PRESIDENT JOHNSON: [1965] There are those fearing the terrible darkness of despairing poverty, despite their long years of labor and expectation, who will now look up to see the light of hope and realization.

MR. LAZARO: President Johnson would probably be surprised at Medicare's price tag today. He had projected it to be about $10 billion by 1990. The figure, instead, is closer to $160 billion. But Medicare hasalso grown in popularity. For its 36 million beneficiaries, every American who's disabled or over 65, the clear appeal is low cost basic health insurance they could not get or afford in the private sector. This group has had one loud message during the current debate over health reform.

ELDERLY LADY: They better now take away any of our Medicare that we have.

MR. LAZARO: Congress has received that message. The various reform plans under consideration chair one thing in common. All of them leave Medicare's basic benefits untouched.

PRESIDENT CLINTON: Under Medicare, we leave it the way it is.

MR. LAZARO: Does this mean Medicare works? Marilyn Moon, an Urban Institute scholar, says, yes, the program has fulfilled the hopes expressed by President Johnson.

MARILYN MOON, Urban Institute: If you look at it as a whole in terms of what it's accomplished over its history, it really has been a pretty remarkable success. It's brought 34 million very tough to insure people into the mainstream of health care.

MR. LAZARO: Bruce Vladeck agrees. He runs Medicare for the Health Care Financing Administration.

BRUCE VLADECK, Medicare Administrator: Well, the Medicare program works pretty well. It's very efficiently administered. The Medicare card is good at just about every covered provider in the United States of America.

MR. LAZARO: Indeed, more doctors take the Medicare card than Mastercard or Visa, and Medicare's administrative cost, 4 percent, is low for a federal program. But what's good for the majority of beneficiaries is not necessarily so for a significant minority, the most medically needy, according to Diane Archer, who runs a New York advocacy group, The Medicare Beneficiaries Defense Fund.

DIANE ARCHER, Medicare Beneficiaries Advocate: Medicare does work for a lot of people in this country, but with people -- for people who have chronic conditions, who are acutely ill, who have substantial medical needs, health care needs, huge expenses, Medicare can be a nightmare. There are serious systemic problems with the program.

MR. LAZARO: Before discussing those problems, it may be worth looking at how Medicare works. The program is funded in large part by a payroll tax on all working Americans. Beneficiaries pay a $700 charge each time they are hospitalized. After that, Medicare pays the rest of the hospital bill. For outpatient services, including doctor visits, there's a $100 annual deductible. After that, Medicare pays 80 percent of the bill. The patient's responsible for the remaining 20 percent. There's no nursing home or prescription drug coverage, making overall a package less generous than the typical private medical care policy, but also considerably less expensive. Beneficiaries pay about $40 a month for coverage of all reasonable and necessary medical services. It's in defining just exactly what is and isn't reasonable and necessary that problems arise. Marilyn Moon says Medicare has not kept up with changes in medical care and recent demographic trends.

MARILYN MOON: It was set up to be an acute care program, but as people have aged and lived longer and developed more chronic problems over time, Medicare is considerably less well set up to handle those chronic problems.

MR. LAZARO: A key point of contention is cost containment. After allowing doctors for years to charge whatever they deemed fair, Medicare has for the past decade cracked down heavily. Diane Archer says this has created an almost knee-jerk instinct to reject claims.

DIANE ARCHER: It tends to deny claims for expensive services, and it's an incredible struggle for seniors and people with disabilities who often don't have the energy to undertake that struggle to get Medicare to pay what's due. And if you do undertake the challenge and you do fight, what you see is that more than two out of three claims that are appealed are reversed, and people do end up with the coverage that they're entitled to and that they need.

MR. LAZARO: Most people just don't have the stamina for the fight is what you're saying.

DIANE ARCHER: People don't have the stamina. People don't have the knowledge that they can fight. Only about 2 percent of all claims are appealed.

GIL PHILIBA: [volunteer on phone] This is Medicare Beneficiaries Defense Fund returning your call.

MR. LAZARO: Archer's organization conducts many appeals for Medicare beneficiaries like Gil Philiba, who now volunteers to man the phones at headquarters. A few years ago, Philiba was hospitalized for a serious blood infection. He was treated extensively with intravenous antibiotics. After a few weeks, doctors allowed him to get the treatments at home, however, Medicare with various explanations refused to pay for the home care, forcing Philiba to pay more than $10,000.

GIL PHILIBA: Medicare's explanation was that they do not cover home IV treatments. They claimed that this was an experimental procedure, despite the fact that they had paid for this treatment in the hospital without even questioning it. And I could go on and on. Fortunately, Miss Archer knew exactly what to do and filed the necessary appeals, and eventually we went before an administrative law judge and we won, and Medicare paid it in full. However, the whole process of appeal took three and a half years.

MR. LAZARO: Philiba's battle with Medicare was actually a battle with Caremark. It's one of about thirty private insurance companies that process claims for Medicare under contract with the federal government. One big criticism of this system is the insurers' potential conflict of interest. Many Medicare contractors sell their own so-called "Medigap" policies. These cover costs not paid by Medicare, like the 20 percent deductible on doctor bills. The less these insurance contractors pay in Medicare claims, the less they then pay for their own private Medigap share. But the Urban Institute's Moon says Medicare, with its cost containment emphasis, reinforces this conduct, causing confusion about benefits.

MARILYN MOON: They get pressure to hold down costs, and so they deny claims, sometimes arbitrarily, and often very differently across the United States, which is another issue, that in California, what may be routine, is not routine on the East Coast.

DIANE ARCHER: I believe there are 34 carriers who process the Medicare claims. You have 34 different policies about what services should be covered and what services shouldn't be. It's problematic. It's problematic to the clients who know that their friends have gotten coverage for the same service.

MR. LAZARO: Obtaining coverage, however, does not always mean obtaining care. Take the case of Jeannette Aufrichtig, a school counselor and poet. She's almost completely disabled by Multiple Sclerosis.

BERT AUFRICHTIG: She needs to be watched all the time because she's -- sometimes she chokes, and she can't walk or anything, get out of bed. She's completely helpless.

MR. LAZARO: Four years ago, Bert Aufrichtig through his own research learned about a court ruling that made people in his wife's condition eligible for 35 hours of home health care each week under Medicare. Armed with this knowledge and he thought coverage, Aufrichtig looked up home health agencies to care for his wife.

BERT AUFRICHTIG: They all refused to come. First of all, they didn't know about the ruling, so I explained the ruling. The major reason they don't come is the way they're funded.

MR. LAZARO: The bottom line in home health care is that agencies prefer working with private policy holders whose reimbursement rates are higher than Medicare's. Those who were willing to serve Aufrichtig at Medicare's rates would stay only a fraction of the 35 hours a week. Until now, Jeannette Aufrichtig has managed to get full-time care thanks to private insurance she still has through her employer. But that private policy will reach its $1 million lifetime limit sometime this fall. That will force her husband to take early retirement so he can provide the necessary care.

BERT AUFRICHTIG: I will have to leave my job because I'm not putting her away. And that's it. And I'll have to live on -- she has an income coming from Social Security and teacher's disability, and I'll have to live off her income.

MR. LAZARO: Medicare cannot legally force home health agencies to provide care, however, critics charge that even in cases where the program does have agreements with providers, there's no effective way to force them to comply with the rules.

DIANE ARCHER: [talking to Philiba] We need to refer her to another law attorney.

MR. LAZARO: Another frequent shortcoming in Medicare's enforcement is when doctors charge more than they are allowed under Medicare. Diane Archer frequently gets complaints about such doctors who often insist these fees are paid up front, all of which is illegal. Retired schoolteacher Ada Sterling paid her eye doctor $1100 up front, more than twice the $500 Medicare calls a reasonable reimbursement. Sterling tried unsuccessfully for three years through Archer's group to get her money back.

ADA STERLING: The folder has grown. Letters have been sent to him by practically every agency in New York, including Medicare, and the doctor refuses to give me any refund.

DIANE ARCHER: In cases where the doctor has adamantly refused, we refer the case to the Health Care Financing Administration. And they do their own review of the matter. They issue a letter to the doctor demanding a refund. They follow up with another letter, but ultimately if the doctor doesn't issue the refund, they'll write a letter to a patient saying, we tried but we cannot get you a refund, which is a travesty, given the fact that the law limits the amount that these doctors can charge.

MR. LAZARO: So this physician is violating the law and getting away with it literally?

DIANE ARCHER: You got it. The physician is violating the law and getting away with it.

MR. LAZARO: Archer says most doctors try to comply with Medicare's regulations but most do so grudgingly, complaining of bureaucratic hassle compounded by low reimbursement. Nashville family practitioner Richard Feldman gained notoriety for publicizing this Medicare check.

DR. RICHARD FELDMAN, Family Practitioner: Four cents. That's not $4.04. That's a dollar sign, point 0 four.

MR. LAZARO: Feldman's original bill for admitting a patient into the hospital in this case was $115.00. Medicare's portion of the reimbursement was reduced by the usual $100 deductible and disallowed charges of $14.95. After years of abusive Medicare bureaucracy and paper work, Feldman says this check was the last straw.

DR. RICHARD FELDMAN: [knocking at patient's home] Reba, are you there?

MR. LAZARO: While some doctors have closed their doors to new Medicare patients, Feldman is perhaps the first to actually stop treating all Medicare patients, including current ones, like 87- year-old Reba McCutcheon.

REBA McCUTCHEON: And you still can't be my doctor, huh?

DR. RICHARD FELDMAN: I guess not.

REBA McCUTCHEON: Well, thanks a lot.

DR. RICHARD FELDMAN: Well, you're not real mad at me, are you?

REBA McCUTCHEON: Yes, 'cause you throwed me down and wouldn't let me come back to see you. I've got to get another doctor.

DR. RICHARD FELDMAN: But I'm helping you with that.

DR. RICHARD FELDMAN: My overhead is higher than the reimbursement, not to mention all the hassles that Medicare gives you about -- they use terms like "not allowed charge." You know, a lot of patients think, gee, my doctor is a crook, he charged something that was not allowed. That's the term for when you charge more than what they allow. Their allowed charges is far less than the going rate, so you have to use a book, and every time you see a Medicare patient, you have to look up in the book to see how much can you charge for that amount of service. You know, it's too many rules, not enough reimbursement. I feel bad for the patients, but I had to make an economic decision.

MR. LAZARO: However, Medicare's chief administrator, Vladeck, does not buy the hardship argument from doctors.

BRUCE VLADECK: Net take home income of physicians has continued to grow faster than that of just about any other group in society, except perhaps Major League ball players, and that's come at a time when the proportion of their business for most physicians provided by Medicare has increased. So it's hard to feel too sorry for the physician whose income of $200,000 a year is cut back to $190,000 because of stringency of Medicare payments.

DR. RICHARD FELDMAN: Most family practitioners don't make $200,000 a -- I don't know any that make $200,000 a year. You know, when you see a patient, that's not all there is. Then you have to go over the lab work when it comes back. You have many phone calls from the patient. Your employees aren't going to work for what the average pay was five or ten years prior or 80 percent of it. They want to be paid what they're worth. And I don't see why you shouldn't pay physicians what they're worth.

MR. LAZARO: Vladeck turns around the argument that Medicare reimbursements are too low. He says private plan payments have climbed too high, too fast.

BRUCE VLADECK: It's inconceivable to me that we can accept in any program, public or private, the notion that the costs of doing business are going to grow two or three times as fast as inflation forever as though that were a normal thing. And yet, when we bring the Medicare growth rate over the last several years down from 12 percent to 8 or 9 percent, people talk about what horrible, draconian cuts we're taking. It's really quite astonishing.

MR. LAZARO: Vladeck says the unbridled growth of health care costs in the private sector is hurting Medicare, where more modest increases make Medicare beneficiaries less attractive to providers like Dr. Feldman, and even at its current rate, Vladeck says Medicare will become insolvent in just a few years.

BRUCE VLADECK: We have the policy levels to control what Medicare pays providers of service to any level we want, but we can't bring them down to a level that would keep the program solvent if the private sector continues to go uncontrolled, because then you will have all the problems of physicians and other suppliers refusing to deal with Medicare, and you will have the problem of shifting the increasing burden of the cost to the beneficiaries.

MR. LAZARO: Many analysts say beneficiaries will inevitably pay an increased share of Medicare's costs in the years ahead, but Vladeck has pledged to fix some of the systemic problems we saw earlier, with less paper work, more uniform benefits across the country, also with stepped up enforcement of the program's rules. But more immediately, Vladeck says the priority is reform, to reduce the growth in health care spending and preserve a program bracing itself as the generation once known as the "baby boom" becomes a "Medicare boom." ESSAY - OUR DAILY BREAD

MR. MAC NEIL: Finally tonight, an essay about a man who's making an unconventional trip that might bring hope to people in Africa. Our essayist is Jim Fisher of the Kansas City Star.

JIM FISHER: It's a given. Only in America's West are there such vistas, like Idaho's Snake River cutting through the saw tooth range, peaks black green in the mid-day sun, a place for summer vacationers, slowed briefly by another sight, a man on a tractor followed by a worn Sedan and an ancient motor home. The mini convoy is taking a month to go the 2,000 miles to Washington State, across the Rockies, and eventually into Kansas. Its purpose is simple: To get people to donate old tractors to Africa. That's Chris Akhimien in the lead, followed by three volunteers who've been with him every inch of the way. Born in a farming tribe in Nigeria, he's 41, a man who by hard work and good fortune got an education in England and Kansas, and now a man with a mission, which is what he's sitting on, an ancient Ford, 8N, tractor. Half a million 8N's were built between 1947 and 1952. Akhimien wants 2 percent of that production, roughly 10,000 tractors, donated to his non-profit Tractors For Our Daily Bread organization. The old Fords, he says, are the answer for Africans who struggle against hunger with what are essentially stone age tools.

CHRIS AKHIMIEN: In preference for this, we want to acquire this Ford 8N tractor that is simple, is easy to maintain, and to fix. A farmer with basic knowledge can maintain the tractor and can fix it. We believe that giving a farmer a tractor, he will be able to cultivate and plant more acreage, and many organizations, even the government, they try to apply band-aids to the food problems. You also know that if you give a man a fish, he will eat for today. If you teach him how to fish, he will eat for a lifetime.

JIM FISHER: Thousands of 8N's are still around sitting in sheds, forgotten junk. Akhimien's volunteers around Manhattan, Kansas, are bringing those old tractors back to life, 40 so far, and sending them to Africa. Forty is hardly ten thousand, but it's a start. And to spread the word, Akhimien stopped at churches along the way, such as the First Evangelical Lutheran in Idaho Falls, where he told his story.

CHRIS AKHIMIEN: The problem in Africa is the hand tool. When you think about Africa, believe me that this is the problem. Think about Africa as this is the problem in Africa, nothing else. If you take care of this, you will wipe out hunger and starvation in Africa.

JIM FISHER: People listened. Their faces showed it. Americans can understand grassroots, people to people, no government, no bureaucrats. Donate a tractor, an African farmer gets it. Africa, mostly fertile and burden, rich in people and resources, yet, on television, the way most of us know it, the problems seem insoluble, masses of people, hand-to-mouth living that breeds instability, famine and strife of unimaginable ferocity. Could somethingas simple as this Ford 8N tractor change all that? Something with points and plugs, no complicated electronics, no need for a computer printout to analyze a problem, something anybody can fix and maintain? Read history. America went from big families, rural subsistence, and unceasing toil with the introduction of machinery 80 years ago. We changed. That's what Akhimien and his entourage, Bill Ott, Clarence Loftman, and Stan Kerr, are after, one step at a time.

CHRIS AKHIMIEN: Yeah, we're making it. Yeah, we're making it.

JIM FISHER: A little tractor, beat up car, a less than new motor home, making their way across the immensity of the American West. And maybe there's something else, not for Africa, but for America, this country with its self-absorption, on the matter of race. Four guys, one black, three white, sending a message that what really counts is ordinary people working together to get the job done. I'm Jim Fisher. RECAP

MR. MAC NEIL: Again, the major stories of this Monday, Haiti's military leadership declared a state of siege after a U.N. Security Council vote this weekend authorized any means necessary to restore the country's ousted president to power. A UN group said as many as 50,000 Rwandan refugees have died from cholera and other diseases. But Defense Sec. William Perry said he believed the situation will soon be getting better. He returned from a weekend visit to the area. Good night, Jim.

MR. LEHRER: Good night, Robin. We'll see you tomorrow night. I'm Jim Lehrer. Thank you, and good night.