The MacNeil/Lehrer NewsHour

INTRO

ROBERT MacNEIL: Good evening. Much of today's news is about new battles over civil rights, whether Martin Luther King should have a holiday named for him. We took at the bitter fight that has produced outrage in the Senate.

Sen. DANIEL P. MOYNIHAN, (D) New York: To accuse him of communism is worse than slander. It is obscenity.

MacNEIL: We look at another struggle -- over the makeup of the Civil Rights Commission -- and finally, at an historic civil rights deal made today by General Motors. Jim?

JIM LEHRER: And we're going to interview Martin Feldstein, the President's top economics man, whose public words in interviews and elsewhere are driving his White House colleagues up the political wall. We also have stories on a group of modern-day gleaners in Colorado, who live off the leavings of the field, and on the startling prediction that the earth is turning hot and the result may soon be Florida-like weather for the Northeast, among other things. Civil Rights Battles

MacNEIL: The first of today's civil rights stories was a deal between General Motors and the federal government to settle a 10-year-old sex and race discrimination complaint. The nation's leading automaker agreed to pay $42 1/2 million in various ways to train and promote women and minorities. The case was brought by the Equal Employment Opportunity Commission in 1973, and the settlement took 10 years to negotiate. In addition to training programs for various levels of employees, the agreement includes a $15-million package to provide higher education scholarships for GM workers and their families. The pact was signed at a Washington news conference by company, union and EEOC officials. The chairman of the Commission, Clarence Thomas, talked of the significance of the agreement.

CLARENCE THOMAS, chairman, Equal Employment Opportunity Commission: The agreement signed today between the -- by the officials from United Auto Workers, General Motors and the Equal Employment Opportunity Commission is one of the most significant agreements in the history of this agency. It is certainly the largest settlement in the history of this agency. It's one that for a variety of reasons has taken quite some time to get resolved. It is now resolved, and we think it's resolved in a satisfactory manner and in a manner that's going to be beneficial to many individuals in the GM workforce or individuals who could, under the terms of the agreement, benefit from the agreement itself. We think it's an excellent agreement. I'm sure the representatives of General Motors would like to make a few comments.

A.S. WARREN, Vice President, General Motors: I agree with all that's been said, and we're delighted to be able to arrive at this agreement. We think it's a sound agreement, and we think it moves us in the direction we ought to go, and we're just very, very delighted. We think this is a monumental occasion.

Mr. THOMAS: Fantastic.

Mr. WARREN: Thank you.

MacNEIL: But while they were breaking an old deadlock at the EEOC, a large group of civil rights leaders gathered across town to protest about another in the Senate. The Senate has failed to vote to re-authorize the Civil Rights Commission, the independent body which monitors civil rights activities, because of a deadlock over three Reagan nominees. Opponents say he's trying to stack the Commission with people who approve of his policies. A compromise was worked out, but has not been accepted by the White House. Meanwhile, the Commission is officially out of business. Today, representatives of the National Association for the Advancement of Colored People, National Organization for Women, the American Civil Liberties Union and others gathered to criticize the Senate for not acting. One of those who spoke was Arthur Flemming, former chairman of the Commission.

ARTHUR FLEMMING, Civil Rights Commissioner: The administration now in power decided to depart from the precedents of 25 years. They have nominated three persons for membership on the Commission. If the Senate should confirm those nominations it would mean that they would have appointed five out of the six members of the Commission. There isn't any question in the minds of anyone but that if that should happen the independence of the Commission would be seriously undermined. We are here today to urge the Congress of the United States and especially the Senate to take the action that it is necessary to take to re-establish the Commission as an independent agency.

ALTHEA SIMMONS, NAACP: The NAACP is urging the Senate today to move promptly and swiftly to pass the measure that would extend the life of the Commission. We have worked very hard with persons in the Senate who would like to extend the life of the Commission, and I can say that the time has come for the Senate to act, irrespective of what the White House does.

ARNOLD TORRES, League of United Latin American Citizens: This unnecessary reluctance on the part of the White House has resulted in the Commission being dismantled. Unless the Senate leadership acts immediately, the commission could suffer irreparable damage. The administration's actions over the last two months, and specifically in most recent weeks by the staff director of the Commission, clearly reflects their intent not to have an independent commission, but rather one that reflects their somewhat skewed views of civil rights in this country.

MacNEIL: After putting off a vote on the Reagan nominees for four weeks in a row, the Senate Judiciary Committee may confront the issue again on Thursday. Jim?

LEHRER: Two last-ditch battles were lost today in the war against having a national holiday in the name of Martin Luther King, Jr., and Senator Jesse Helms, the North Carolina Republican leading the anti-holiday effort, was the double loser. A federal district judge in Washington this afternoon ruled against Helms' request that FBI files and tape recordings on King be released, a decision Helms immediately appealed. Helms claims the material, put under a 50-year seal six years ago, would substantiate his claim King associated with Communists and other subversive elements. The second loss for Helms was in the Senate, where, by an overwhelming 76-to-12 vote, senators rejected the Helms motion that would have derailed the King holiday resolution by sending it back to committee. Senate Majority Leader Howard Baker says the final Senate vote will now come tomorrow afternoon. The House has already passed it, and President Reagan has said he will sign the measure, making the third Monday in January a national holiday beginning in 1986. King's birthday was January 15th. Today's wind-down events were not without heat. The senators objected to a 200-page bundle of anti-King material Helms put on every senator's desk. Senator Moynihan of New York was among the most vociferous in his reaction to that.

Sen. MOYNIHAN: I've just come from the Senate floor, where I spoke with as much conviction as any time since coming to this place, about the obscenity of putting on the desks of United States senators this packet of filth collected to smear the reputation of one of the truly great Americans, truly great Americans of our age, Martin Luther King. There was not a more dedicated democrat, constitutionalist, Christian in our time. To accuse him of communism is worse than slander. It is obscenity.

LEHRER: Senator Edward Kennedy got angry over a Helms remark on the Senate floor that King had hidden connections with the Communist movement.

Sen. EDWARD KENNEDY, (D) Massachusetts: I think it's inappropriate, to say the least, to even suggest that the hundreds and thousands of American men and women who gathered at the Lincoln Memorial in 1963, in that magnificent testimonial in which Martin Luther King spoke, were members of a communist conspiracy, or that the small children -- black children, white children -- that faced the fire hoses, that tried to sit in to lunch counters, to go into restrooms that said blacks and whites only, that they were members of a communist conspiracy. I think it's unfortunate to suggest that the full implementation of the 14th and 15th amendments, which symbolized this country's deep commitment to equality, is in any way a part of a communist conspiracy. That would be almost like saying that Abraham Lincoln was a member of a communist conspiracy or that the --

LEHRER: We're going to join the debate now over the Martin Luther King holiday issue, as well as the others involving civil rights raised today. Senator Helms' fight against the King holiday has often been described as a lonely one, but he is not alone. He has been supported by many, particularly, from the beginning, by his North Carolina friend and Republican colleague in the Senate, Senator James East, and he has been opposed from the beginning by another Republican colleague, Senator Charles "Mack" Mathias of Maryland. Both are members of the Senate Judiciary Committee. Senator East, what is the basis of your opposition to the holiday?

Sen. JOHN EAST: Senator John East -- you said James.

LEHRER: Oh, my apologies, my apologies.

Sen. EAST: That's perfectly all right.

LEHRER: My apologies.

Sen. EAST: My objection to the holidays, Jim, are several. First of all, of the nine federally paid holidays we currently have, only one honors a specific American; that's Washington, the founder of the country. And it occurs to me that for whatever merit there is to Dr. King and his contribution to American public life, that if we add additional persons now to it, and elevate King to a status that only now Washington enjoys, I find it difficult to rationalize why you wouldn't continue then to add others. Is he at a higher level than, say, Jefferson or Lincoln or Robert E. Lee or Franklin D. Roosevelt, in the case of the handicapped, for example, or Douglas MacArthur? I think it's a question of, on federally paid national holidays, perhaps with the nine we have, with only one honoring a specific American, the founder of the country, we ought to leave it at that and have days of commemoration to honor other Americans. So I am concerned about the precedent and the cost factor. And also I'm troubled with the historical perspective factor. Now, Washington's birthday was made a national holiday 80 years after his death. In the case of Martin Luther King, it's only been 15 years, and I think we lack a certain degree of historical perspective in terms of evaluating it. In short, with all due respect to the contribution of Martin Luther King, I think this is a terribly political kind of activity --

LEHRER: In what way?

Sen. EAST: Well, in the sense that the feeling generally is in the Senate to vote against this or to oppose it in any way is to, some way or other, to offend the black people of this country. And I simply submit it is possible to be strongly committed to the idea of equal treatment of all people, regardless of race or color or creed or natinal origin or sex or disability. In fact, I offered an amendment to that effect. It would be James Madison's birthday, who was the father of the Constitution, and the man who shepherded through the Bill of Rights through the first Congress, and it would be a day of commemoration. It would not cost the federal government anything, and it would --

LEHRER: Not a holiday. It wouldn't be a holiday.

Sen. EAST: It would be a day of commemoration in which we would renew the American commitment to the idea that every person ought to be judged on the basis of talent and ability as opposed to race, color, creed, religion, sex or disability. And I feel in the King case that others will now want to come along and add their speciality. It might be the physically disabled, which, for example, I'm in that category, as you know, being in a wheelchair, and at some point I think we need to prudently say no, and I think one can be opposed to this particular measure and be deeply resentful of the implication that some way or other we are racist or, as some have said, it's obscene to oppose it. I strongly resist that.

LEHRER: Senator Mathias, how do you answer Senator East's objections to this?

Sen. CHARLES MATHIAS: Well, it seems to me that what we are doing here is memorializing one of the unique, significant events in American history. When the guns fell silent at Appomattox, the fighting was over in the Civil War, but peace did not come to the country. Within a matter of days Abraham Lincoln was assassinated. The tragedy of the Reconstruction began. The Ku Klux Klan was organized. The carpetbaggers swamped the South. It was not until Martin Luther King, Jr. stood on the steps of the Lincoln Memorial in Washington and said, "I had a dream, a dream of black and white America living together in peace," that we finally reconciled this country, that we brought black and white America together, that we really ended the Civil War and brought peace to this continent. And it is that moment that we are memorializing, and Martin Luther King, Jr. is the symbol of that reconciliation.

LEHRER: And so the Senator's objections on a historical perspective, you just reject those.

Sen. MATHIAS: I do.

LEHRER: Senator East, do you agree with Senator Helms about his charges that Martin Luther King associated with communists and he's not a fit person to be honored in this way?

Sen. EAST: Well, I think Senator Helms' objection is properly taken, from this -- certainly from this perspective, that we do have sealed files in the national archives, and those should be made available, I think, before we can judge the full historical record, and James Jackson Kilpatrick, I might note, who was a distinguished and respected national correspondent and commentator and syndicated writer, has said the same thing. I see nothing wrong -- I don't see quite what the objection is to wanting to look at the nature of those files and see simply what they contain, because we are now -- we are now elevating this man to the same status of the founder of our country, the leader in the Revolution and the first president, and I think that means let's make sure that we know precisely what we're doing and that all the facts are in. I don't quite understand why those who are so insistent upon making this a national holiday become, frankly, quite testy and, I think, overly critical at the suggestion Senator Helms has made that we might want to look at the total historical record.

LEHRER: What's your view of that, Senator Mathias?

Sen. MATHIAS: Well, I think the charges that have been made are really demeaning to this debate. T think that they are unfortunate. I think they're irrelevant. The thing that is important in the career of Martin Luther King is his achievement in bringing about this reconciliation in American society. That was done on a sunlit day before a crowd of 500,000 people who were present, and millions more who saw it on television. There isn't any secret about that. That is the thing that, when I introduced the bill for this holiday with Senator Kennedy, that's the thing we had in mind.

Sen. EAST: If I might get back, and with all due respect to my distinguished friend and colleage, Senator Mathias, now, and I don't object to it. He appeals very much on the heavy emotional vein here, but I could do the same thing. I was suggesting, for example, that we might want to make a national holiday of the birthday of Franklin D. Roosevelt, who was a polio paraplegic, as I am, confined to a wheelchair. He contracted polio at the age of 39 in 1921. He was elected governor of New York twice, president of the United States four times; he started the March of Dimes, cured polio, and now we're working, and that same foundation is working, on the curing of birth defects. Now, people who have had to live the tortured road of physical disability, we could make the same emotional appeal about the contribution that man made. So cannot we all play that game? And I think again it's the precedent. Maybe we better stop with the founder.

LEHRER: Thank you. Robin?

MacNEIL: Turning to the struggle over the Civil Rights Commission, gentlemen, Senator Mathias, you heard the appeals from all these civil rights groups for the Senate to act regardless of what the White House does. Is it going to?

Sen. MATHIAS: I think it will. I think the reason the Senate has not acted up until today is the fact that the majority leader, Senator Baker, has been hoping there would be some compromise worked out on the question of the Commission personnel, that some arrangement could be made that both sides could live with. And that has not happened, and if it does not -- if it continues to elude us, then I think we're going to have to go ahead and act anyway.

MacNEIL: Senator East, as one who believes the President should have all his three nominees on the Commission, I understand, what do you think the Senate's going to do?

Sen. EAST: Well, I have always learned it is best not to attempt to project precisely what the United States Senate will do on any particular day. It's a hazardous business, worse than trying to predict the weather. I do support the administration on this. I think its nominees are honorable people with excellent civil rights records. The President is clearly within the law. This Commission is a part of the executive branch, and I think he's simply exercising the prerogatives he currently has under the law. If these people individually could not bear up under close scrutiny, then I would of course say let's oppose them. But I would submit that every one of them -- Mr. Abrams, Mr. Destrow, Dr. Bunzel -- are all men with commendable civil rights records, with great credentials, impeccable credentials, and I think the President is right to stand his ground, and personally I support him.

MacNEIL: Senator Mathias, you object to that. Why?

Sen. MATHIAS: Well, for one simple reason: that the incumbents who are being unceremoniously kicked out after their service on the Commission are equally men and women of commendable civil rights records and distinguished personal careers, and there is no reason to dismiss them with a boot. And, more than that, to destroy the 25-year tradition of the Civil Rights Commission, which has kept it non-partison, independent of the president in power at the moment. That independence of the Commission is the real victim of this episode.

MacNEIL: Senator East, how much of this really is over the independence of the Commission, and how much is it over the substance of civil rights matters like whether the various people agree on affirmative action and the rate you push it, on quotas, on busing and things like that?

Sen. EAST: Well, I think that becomes a vital part of it. Certainly the President's nominees, though they have distinguished records now in the civil rights area -- Morris Abram and Mr. Destrow and John Bunzel -- they do oppose the concept of quotas; they do oppose the concept of forced busing. But one can still, again, agree on the idea of improving the opportunities for all Americans, regardless of race or color, and still not support the concept of quota or busing. The quarrel I have with the opponents of the President here is the assumption that only their remedies become the litmus test for one committed to civil rights, just as they do a little bit with the Martin Luther King proposal. And I'm resistant to that. I think you can disagree on the vehicles, on the methods, but agree with the final goal. And yet of course it is true. The President was elected as a president who opposed quotas. He opposed forced busing. And I think to some extent to allow him the prerogative to assigning this Commission, which is a part of the executive branch, appointees of his own choosing is perfectly appropriate.

MacNEIL: Do you see it that way, Senator Mathias? Is it really over whether the Commission will have a majority for or against these things?

Sen. MATHIAS: I think it is the way the Commission is being packed that is upsetting the Senate. To violate the traditions of the Commission, to force three people out, which would then give the President a majority of his appointees on the Commission, does violate the tradition of independence that has been respected by every president since the Commission was created in the administration of President Eisenhower.

MacNEIL: We have only a little time. I just want to ask you each, in the light of these arguments, how do you view, starting with you, Senator East, this agreement which we reported between General Motors and EEOC today, which is affirmative action of quite some magnitude?

Sen. EAST: Well, unfortunately I've not had an opportunity to study that agreement in detail, as one can appreciate, because we've been tied up on the Senate floor with the Martin Luther King debate. Now, I don't object to the concept of "affirmative action" if by that you mean encouraging organizations, public or private, to improve their records as regards groups, be it based upon, again, race or color or sex, national origin, creed, to improved their record of employment and treatment. I have no quarrel with that affirmative action. But when affirmative action is converted suddenly into a quota concept, there I disagree because then I think it does become reversed racism, so to speak, in the case of race or color. So there's a strong distinction between affirmative action, which I personally do not object to, meaning you go out and seek to improve, as opposed to assign quotas which means, candidly, ultimately a form of discrimination, it occurs to me.

MacNEIL: Do you have a comment on the General Motors agreement, Senator Mathias?

Sen. MATHIAS: Yes, I think it's affirmative action in the best sense. And to me affirmative action means a little more than it does to Senator East. I think affirmative action means that you do something to improve the situation that has existed, and that's exactly what General Motors and the United Auto Workers and the EEOC agreed to today. This $42 1/2 million that was agreed on is going to be largely invested in educational and training programs which will upgrade the skills and the opportunities of the minorities that have been affected by employment practices in the past. And I think that is what affirmative action is all about. It does something to improve the situation, not just a pious hope to behave better, but a positive attempt to do better.

MacNEIL: Think you both, gentlemen. Jim?

LEHRER: A follow-up on yesterday's big cloak-and-dagger story. James Harper had a million-dollar deal with Polish espionage agents, but only $250.000 of it was paid. He also tried to turn himself in to the FBI with an offer to become an counterintelligence agent, but the FBI declined his offer. They arrested him instead and charged him with selling secrets about the Minuteman missile to the Polish agents. The secrets came from his late wife, who was a secretary at a California electronics firm. And we'll be back in a moment.

[Video postcard -- Bemidji, Minnesota]

MacNEIL: President Reagan today appeared to be taking note of the continued demonstrations in Germany against the planned deployment of U.S. missiles this winter. Speaking to editors and broadcasters at a White House lunch, the President addressed his remarks to young people in Europe.

Pres. RONALD REAGAN: Let me emphasize today, and I would urge the young people in Europe to reflect on this, it is not the United States and NATO which threaten peace. We have no intermediate, long-range missiles in Europe, and we're willing to forego them entirely. It's the Soviet Union which has over 1,300 intermediate-range nuclear warheads threatening the countries of Europe, Asia and elsewhere, and they continue to deploy SS-20 missiles at the rate of one a week, each missile containing three warheads. Now, these are actions of intimidation, pure and simple. We stand ready to make any arrangement with the Soviets which will be verifiable and fair to all sides. This includes eliminating an entire class of nuclear weapons or, if they won't go that far, at least a portion, and the more the better. But we can't negotiate forever with ourselves. If Soviet intransigence continues, we will move forward to re-establish the balance and ensure NATO's deterrent ability.

MacNEIL: A White House spokesman reiterated today that the United States would remain at the negotiating table in Geneva and that if agreement were reached with Moscow the U.S. would remove missiles or limit the number deployed in Europe. Jim? Martin Feldstein Interview

LEHRER: A recent Business Week magazine has a story about intrigue at the White House, headlined "Professor Feldstein Flunks Politics." It's about Martin Feldstein, the Harvard economist who is now chairman of the President's Council of Economix Advisers. The story says what a lot of other recent stories have said, that Feldstein is in political hot water at the White House because he's too pessimistic in public, particularly when he says federal budget deficits cause high interest rates. It's a point Secretary of the Treasury Donald Regan disagrees with, also publicly. Here's how each has expressed their differences in recent public appearances.

MARTIN FELDSTEIN, Chairman, Council of Economic Advisers [September 14, 1983]: The reason for the very high level of the long-term real interest rates is undoubtedly the unprecedented level of the budget deficits that are now predicted for the years ahead if no legislative action is taken. Note that what matters most is not the current budget deficit, but the expectation of these unprecedented future budget deficits year after year.

DONALD REGAN, Secretary of the Treasury [October 6, 1983]: What I'm saying is is interest rates -- high interest rates are caused by several things, and it's too simplistic to say just deficits cause high rates of interest, because there's no known literature that indicates that one month when the deficit goes up, interest rates will go up that month or even one year when deficits go up interest rates will go up. Notice what happened in 1981 and '82. Our deficits went up but our interest rates came down.

LEHRER: The word in the Business Week article and elsewhere is that President Reagan, the man in charge, agrees with Regan, not Feldstein, and White House officials want Feldstein to act accordingly, meaning cool it. As a form of insurance, started last week, all speeches by economic officials, including Feldstein, are now reviewed ahead of time for conformity by the White House staff. And tonight, right now, marks the first public appearance of Dr. Feldstein since then. Dr. Feldstein, welcome.

MARTIN FELDSTEIN: Nice to be with you.

LEHRER: Have you in fact been asked to cool it on all of this stuff?

Dr. FELDSTEIN: No, and I think that the stories that I've been reading in the press really do misrepresent what's going on.

LEHRER: What is going on?

Dr. FELDSTEIN: Well, the stories that you showed of Don Regan and myself talking, really there's much less difference than I think the press and others have suggested. The basic agreement that deficits are a bad thing is the fundamental point, and that we agree about. Now, when I say that the projected long-term deficits are keeping real interest rates high, I think I'm saying what most economists, most financial people believe. But note it's long-term deficits, not year-to-year movements, and Don pointed out that if the deficit goes up in one month or one year that doesn't move rates. Moreover, the key thing that pushed interest rates up so high in the late '70s and early "80s was inflation, and as inflation came down, interest rates came down, but not real interest rates. Not interest rates adjusted for inflation. So in part an argument has been created artificially out of --

LEHRER: Well, we want to go through some of the specifics on that in a moment, but I first of all want to understand what -- for instance, this new review thing for economic speeches from you and others who speak on economic measures. Do you feel that was targeted toward you?

Dr. FELDSTEIN: No, and I don't feel that it's censoring or controlling what we're saying. I think, again, that's been distorted by the press in describing it.

LEHRER: What about -- there was a report in The Washington Post that the White House vetoed a planned appearance you were going to make on "Meet The Press." Is that --

Dr. FELDSTEIN: No. Vetoed is really the wrong word, and here I am on your program --

LEHRER: Well, I know. I was going to get to that.

Dr. FELDSTEIN: It's clear that there isn't any attempt to veto it, and while this is the first time I've been on television in the last couple of weeks, I've made a number of public speeches over the last few weeks, so I've been in public very much. There's really no attempt at censorship here.

LEHRER: Well, has anybody -- remove the word censorship. The question or the point that's being made, and I concede your point, all the points are being made by unnamed White House aides, but what they're being quoted as saying is that things like, well, you've been more interested in protecting your reputation as an economist than being a political team player. Is that -- has somebody said that to you directly over there?

Dr. FELDSTEIN: Nobody has said that. I read those kinds of things in the newspaper the way you do. I see myself as telling the President what I think, and speaking publicly what I believe is the administration views about deficits and answering questions about the economic impact of different kinds of policies.

LEHRER: There has been no word given to you directly or indirectly saying, "Hey, Martin, will you cool it and not -- quit saying all of these things?"

Dr. FELDSTEIN: No, no.

LEHRER: What is your reaction when you pick up a story -- there was one, I can't even remember where it was, that I read today that the word was that these folks would just as soon that you went back to Harvard before you're scheduled to.

Dr. FELDSTEIN: Well, I'm sure that -- I'm sure there are some people who disagree with the kinds of things that I'm saying, and I'm sure that there are some people who would like me to be someplace else, and that was probably true before I came to Washington in the first place. But I'm very comfortable in my job, and I feel that the President and my colleagues in the administration listen carefully to what I'm saying.

LEHRER: And the problem of saying these things publicly, whether it's in a television appearance or speeches, just saying what you thaink -- I mean, you don't -- nobody said quit doing that?

Dr. FELDSTEIN: No, and indeed what I'm saying is either pretty conventional economic analysis, like the things you showed in that speech, or explaining why the President's own economic program is important and ought to be adopted by Congress.

LEHRER: One more question and we'll get off this. What do you think has happened then?What has caused all of these stories, one after another. It must --

Dr. FELDSTEIN: It's pretty dull time.

LEHRER: That's all that's behind it?

Dr. FELDSTEIN: I can't really -- I mean, the stories began one day when Don and I made speeches like the ones you showed, and I think it was for lack of anything better to talk about that the press started to create a conflict of personalities when none really exists.

LEHRER: Thank you. Robin?

MacNEIL: You say there's no difference between you and Secretary Regan over the impact of deficits on interest rates?

Dr. FELDSTEIN: No, there are probably technical differences, but there's no basic difference about the importance of getting budget deficits down, and indeed, the differences between us that, that set of clips that you showed indicate, are in part because we're talking about different things. I talk about real inflation-adjusted rates and long-term projected deficits, and Don, who after all came from the financial community, tends to focus, as many, many people do, on current market rates of interest, without adjusting for inflation. Now, the decline in inflation that occurred in the last couple of years has been the principal reason why those market rates have come down.

MacNEIL: But a lot of people in the financial community seem to agree with the kind of emphasis you're putting on the subject, more than they agree with the kind of emphasis Secretary Regan is putting on it. Is that not so?

Dr. FELDSTEIN: Well, I'll leave that to you to figure out.

MacNEIL: Well, let me ask it in another way. Secretary Regan says that Treasury has a study which shows there is no empirical evidence that correlates deficits with interest rates. Now, is that Treasury analysis wrong?

Dr. FELDSTEIN: Again, the distinction between interest rates corrected for inflation and plain garden-variety market interest rates is critical. Interest rates have come down in the last couple of years, even though deficits have obviously gotten much larger, both actually and in the future. The main thing that moved interest rates down from their heights in the late '70s and 1980 has been the fall in inflation, despite the deficit. So if you focus on market interest rates, then the statement that you just quoted is perfectly true. If you talk about real interest rates, well, then quite the opposite has happened, and real interest rates have been going up.

MacNEIL: Which are the interest rates that you fear could harm the economic recovery?

Dr. FELDSTEIN: I worry that it's the real interest rates that are changing the character of the recovery.

MacNEIL: Already changing it?

Dr. FELDSTEIN: A little bit now, but much more so as we look ahead.

MacNEIL: How far ahead?

Dr. FELDSTEIN: Well, I like to divide the period of analysis into the near term, '83 and '84, and then what I'll call the medium term, beginning in 1985 and beyond. And it's in that period that I fell -- and that's embodied in the administration's budget -- that it's very important that we get budget deficits moving down sharply.

MacNEIL: And if we don't what will happen, and how soon?

Dr. FELDSTEIN: Well, if we don't get budget deficits moving down in 1985 and '6 and beyond, we will continue to do substantial damage to investment industries, to construction, to exports. We'll make the recovery a very lopsided one and inherently a more fragile one, along with the fact that we will, by slowing the growth of the capital stock, will be hurting the potential longer-term growth of our economy.

MacNEIL: Do you have a feeling that you as an economist are telling it like it is, as they say, and that the people you appear to have a disagreement with are telling it like they hope it will be for political reasons?

Dr. FELDSTEIN: Again, I think that that's a caricature of a situation that has come up in the press.

MacNEIL: Well, why then do you emphasize what you call real interest rates, and does Secretary Regan emphasize what you call market interest rates?

Dr. FELDSTEIN: Well, you should ask the Secretary that. I don't really want to just comment on his views.

MacNEIL: We did. We did, as a matter of fact, and he said, yes, there was a disagreement between you but the President that time liked people to advise him differently and have it all worked out in public. And then a couple of days later the White House put it out that no, they preferred those disagreements to take place in private. Do you have a comment on that?

Dr. FELDSTEIN: Well, I don't think that we're talking about advice, now, to the President. I think advice to the President should be done privately; inherently it has to be done privately. But talking about how the economy works, how we perceive the role of monetary policy, deficits, trade, I think it's important for the public to understand that we understand what we're doing, to understand that we perceive the problems correctly.

MacNEIL: Thank you. Jim?

LEHRER: I'm not trying to make any more trouble, Dr. Feldstein, but there's but there's another issue where you reportedly are of one opinion, and Secretary Regan and also, reportedly, the President, are of another, and that's on this contingency tax, a standby tax for 1985, depending on how the economy does, etc. First of all, what is your position on that now?

Dr. FELDSTEIN: My position is to support the administration's budget, the President's budget. And the President's budget called very clearly for reducing deficits, starting out there in calendar '85, in the second half of calendar '85, by a combination of spending cuts and the contingency tax, and that has never been withdrawn.

LEHRER: But the word is -- now, this is where the problem comes, apparently -- the word is that the President has decided to back off, that he's not pushing that now; Secretary Regan's not pushing that now, and everybody says nobody's pushing that now but you. Is that true?

Dr. FELDSTEIN: Well, I think that is is still part of the administration's program; that's what the President says; it's what the White House says. And I think it's important for Congress to act now.

LEHRER: Nobody has told you, then, "Hey, cool it on this one; the President's not that keen on this anymore?"

Dr. FELDSTEIN: Not at all, and I see the President all the time, so that I think that what I'm doing is representing the administration's policy on that. It's true we're not getting a lot of support in Congress. I think that the failure of Congress to pick up the initiative that the President has indicated, deaing with those medium-term deficits, is a very serious problem.

LEHRER: Well, as I'm sure you know, they say the reason it isn't getting any more support in Congress is because the President has backed off of it, but you're saying that's just not so.

Dr. FELDSTEIN: No, that's not so. The President has said that this is a package that he has put forward, and I've heard him a number of times in recent -- certainly since Labor Day, indicate that he continues to believe that this package as a whole is what would be good for the economy.

LEHRER: What is the basic argument for the contingency tax?

Dr. FELDSTEIN: The basic argument is this, and the question is, why enact it now to take effect two years from now? If you enacted it now to take effect immediately, it would have two kinds of impacts. First, whenever you enact it, interest rates would come down; that would help. Housing, that would help. Investment. The dollar would come down and make it more competitive. It would help our exports. But all that would happen with a lag -- a year, two years into the future. But the immediate impact, when you actually start collecting taxes, is to reduce consumer spending, and that would dampen the economy. We don't want to dampen the economy at this point. We want to keep the recovery going. But by enacting it now, enacting it in 1983, to take effect in '85, we get the best of both worlds. We get the immediate reduction in interest rates, a move of the dollar, to be more competitive in world markets.

LEHRER: Because the signal it would send to the financial community --

Dr. FELDSTEIN: Exactly. Exactly. And then the result is that investment will be stronger out there in 1985, exports will be stronger out in '85 so that when the tax actually takes effect, if it does, then those two will offset and there will not be any depressing effect on economic activities. You just cannot shrink budget deficits on a short notice basis. You have to have this kind of lag. And that's why it worries me that if Congress doesn't act now, when we get to 1985, we won't be able to act quickly then; again we'll be talking about doing something with relatively long lags, and that means years and years and years of these budget deficits.

LEHRER: And that is the administration position; that's not just the the Feldstein position?

Dr. FELDSTEIN: That is not the Feldstein position. That's written into the budget that the President sent up to Congress in the beginning of this year.

LEHRER: Do you feel like you've been wronged by all of this stuff that's happened in the last couple of weeks?

Dr. FELDSTEIN: Oh, wronged, I don't know what wronged means in this context. I think it's been a quiet season for the news, and one of the things to keep everybody reading has been the story --

LEHRER: But nobody over at the White House is out to get you or any of that, you don't think?

Dr. FELDSTEIN: I would say no. I mean, there are obviously some people who don't like what they're hearing me say. There are people who would rather not have the -- people in the White House who would obviously not like some parts of the administration's program. But what I am describing is the President's program.

LEHRER: Thank you very much, Dr. Feldstein.

Dr. FELDSTEIN: Nice being with you.

LEHRER: Robin?

MacNEIL: In overseas news, it looks as though the U.S. Marines in Lebanon will have the job of guarding the conference of all parties in the recent fighting. The Lebanese government today announced Beirut airport, where the Marines are based, as the site for the talks to restructure Lebanon's political makeup to suit the various religious factions. The talks are scheduled to open on Thursday. There was more sniper fire in the area today; two Lebanese soldiers were killed, and an Italian soldier was wounded.

In Rome, Italian authorities took the man who shot the Pope in May, 1981, back to the scene in St. Peter's Square for a re-enactment. Mehmet Ali Agca, heavily guarded, was led through the steps he said he took that day. The Italians are trying to substantiate Agca's story that the assassination plot was run by Bulgarian secret police and the KGB. Don Lang of Viznews has a report.

DON LANG, Viznews [voice-over]: The appearance of troops and police in front of the well-guarded van puzzled the citizens of Rome. But all wasrevealed when the van reached its destination in St. Peter's Square. Inside was the Turkish assassin who tried to murder Pope John Paul two years ago. He was brought to the scene of the crime by police attempting to reconstruct the events which shocked the world. Ali Agca has implicated a Bulgarian airline pilot in the plot. He alleged that Sergei Antonov, who is being held for questioning, was by his side when the shots were fired. Step by step, Agca described to detectives what was going on moments before the assassination attempt began. Antonov has denied the allegations, and it was his lawyers who asked for this reconstruction. This is Don Lang reporting.

MacNEIL: For several days we've been seeing conflicting stories about what's going on in the Caribbean island of Grenada. Today it became clear that a power struggle is underway within the Marxist ruling party. The prime minister, Morris Bishop, is reported to be under house arrest, and the head of the army says the prime minister has fallen out of favor within the ruling party because he refused to share power with the deputy prime minister. The deputy prime minister, Bernard Coard, resigned on Friday after the prime minister charged that the deputy prime minister and his wife were plotting to assassinate him.Now the army says it is investigating the whole affair, and a final decision about the prime minister's future will be made when that is completed.

We'll be back in a moment.

[Video postcard -- The Adirondacks, New York]

LEHRER: Mandatory airbags or automatic seatbelts will not be required until at least 1985, if then. That was the thrust of an announcement today from Transportation Secretary Elizabeth Dole on the so-called passive restraint rule. Six years ago the Carter administration ordered airbags or automatic seatbelts on all cars built after 1982. The Reagan administration rescinded that rule, but the federal courts ordered it reinstated, but left the date to be decided by the Transportation Department. Today, Secretary Dole said public hearings would be held on the subject later this year, with a decision next summer. She said the options include keeping the rule or scrapping it again, but with arguments that will satisfy the courts this time.

And from the medical beat, a New York state health researcher says it may be possible to create a single vaccine that provides immunity against many different diseases at once. He said it would be at least two years before such vaccines could be tested on humans, but said it's possible such a vaccine could even be used in preventing herpes, the disease associated with sexual contact for which there is now no known cure or preventative. Robin?

MacNEIL: In case you've been relaxing a bit, assuming that scientists and officials have just about run out of dire things to warn us about, you've been wrong. For the first time today the government lends its authority to scientists who've been warning that air pollution is going to produce drastic changes in our climate. Judy Woodruff has more on the story. Judy? Air Pollution Effects on Climate

JUDY WOODRUFF: Robin, the warning came in a report from the Environmental Protection Agency. It said that within 10 years the earth will start to get a lot warmer. One EPA official said that by the year 2100, New York City could have the same year-round climate as Daytona Beach, Florida. This is because of something called the greenhouse effect. When fossil fuels like coal are burned, they give off carbon dioxide, which builds up in the earth's atmosphere. Eventually, that buildup acts like the dome of a greenhouse, trapping the earth's heat and playing havoc with the environment. Temperatures will rise and rainfall will increase, both of which could severely disrupt agriculture. Another effect of the higher temperatures, the polar ice caps will start to melt more rapidly, causing the sea level to rise worldwide. For example, at Galveston, Texas, the Gulf of Mexico could rise by as much as seven feet by the year 2075. The report sums up by saying these changes could be potentially catastrophic. For more now on this gloomy picture, we have with us Joseph Cannon, who is acting assistant administrator for air quality at the Environmental Protection Agency. He supervised this two-year study. Mr. Cannon, is this situation as critical as it sounds?

JOSEPH CANNON: Well, I'd like to say we don't consider this a Doomsday document, this report. You're talking about a study which is not original. It's a study that basically collects and synthesizes a very wide range of scientific information on this issue, related to emissions of CO2 gasses, carbon dioxide gases and other so-called greenhouse gases -- methane, nitrous oxides. We --

WOODRUFF: I was just going to say but for those of us who don't understand all those scientific effects, we're talking about what? About a four-degree average increase in temperature, say, by the middle of the next century. That really doesn't sound like a big increase.

Mr. CANNON: Well, by itself if doesn't sound like a large increase, and the effects -- but the effects of that increase could alter weather patterns, could alter the climate. You're not -- you're not talking about a specific number. We don't know -- we can't tell you that by 2025 or 2050 there will be a certain temperature rise or rise in the level of the sea. We're talking about very broad ranges at each stage of the analysis.

WOODRUFF: Well, let's get a little more specific. I mean, who would be most affected? The people who live on the coasts, farmers, for example?

Mr. CANNON: We don't -- one of the -- I hate to sound so uncertain. The people on the coasts will be more affected in certain ways than people inland, of course, but you're talking -- just to put it in perspective, by the year 2000, just for example, we're talking on a range of maybe a .7 degree Fahrenheit increase in temperature up to a 1.4 degree increase. And so you're not talking about effects that we will feel or discern any time soon.

WOODRUFF: We're talking about into the next century.

Mr. CANNON: We're talking about a problem that was decades in the making -- since the industrial revolution -- and it will be decades in the resolution.

WOODRUFF: Well, is there anything we can do to stop this or to slow it down?

Mr. CANNON: The point of this study is addressing that very question; what, if anything, can we do to delay this greenhouse effect? And we found that even by taking the absolute most drastic measures we might be able to delay it as much as five years. But the benefit -- let me point out the benefit of the study is that this is one of the -- this provides the agency and the government with an opportunity, instead of looking at yesterday's problems, to look into the future and to begin planning for the environmental effects that will occur. They're not all necessarily bad. If we plan for them we can mitigate even the bad ones.

WOODRUFF: But you're saying there's not much we can do even to delay this from happening?

Mr. CANNON: No, that's true.

WOODRUFF: Well, as you know, there are some who disagree with you. For example, we talked to an environmental scientist here today who says that if we limit the use of fossil fuels like coal and I suppose like oil, gasoline and so forth, that we could make a significant --

Mr. CANNON: Well, the study wasn't intended as a major policy statement by the administration or even by the agency itself. What it is, is it studies that very question, and we took all the science available to us and we ran it through the many models available, and the conclusion is that even if you placed a 300% tax on fossil fuels, which is the most dramatic thing studied, it may delay -- it may delay it, by the year 2040 as much as five years. So you're talking about --

WOODRUFF: Just one quick thing that you could recommend we do once this starts to happen.

Mr. CANNON: Well, further study. Many scientists and departments are studying this, and the NAS -- the National Academy of Science -- is about to come out with a report in the next few days which will add further light to it.

WOODRUFF: So more study? All right, thank you, Mr. Cannon, for being with us. Jim?

LEHRER: Thank you, Judy.

Again, through the main news stories of the day before we go.

A court decision and a preliminary vote in the Senate make it a near certainty there will be a National holiday for the slain civil rights leader Martin Luther King, Jr.

General Motors agreed to a $42.5-million settlement of a sex and race discrimination suit, the largest agreement of its kind ever.

U.S. Marines will be guarding the reconciliation committee in Lebanon when it holds its first meeting, scheduled for Thursday at the Beirut airport.

Economics adviser Martin Feldstein told us awhile ago he has no plans to stop talking publicly about anything.

And, as we just heard, stand by for a change in the temperature, a change upward. Robin? Latter-Day Gleaners

MacNEIL: We close tonight with a different angle on a story that has again become an important political issue -- hunger in America. President Reagan has appointed a task force to study it, and they held their first meeting in Los Angeles last week. Meanwhile, some people faced with putting food on the table have turned to an ancient solution. Kwame Holman reports on one group in Colorado.

KWAME HOLMAN [voice-over]: By now the harvest of most of the nation's food crops is over, but again this year the harvesting machines, designed more for speed than thoroughness, have left behind thousands of pounds of usable produce. Also left on the ground are the blemished or imperfect fruits and vegetables that farmers won't take to market. Since Biblical times, food left after the harvest has been gathered manually by the poor. It's called gleaning, and this year the number of gleaners in this country has increased sharply.

In Boulder, Colorado, Bob Munson is one farmer who has opened his land to gleaners.

BOB MUNSON, Colorado farmer: It takes care of the excess. My wife gets real upset when things go to waste in the field, and I do too. It feels terrible to have things rot in the field. You know, it helps the needy.

HOLMAN [voice-over]: Gleaners like Edy Hickey have been coming to Boulder area farms for two years.

EDY HICKEY, gleaner: It's not really a lark or anything like that.It's really hard work, but it's good work. It makes you feel really good about yourself because you're not just out here getting free food; you're earning it. You're working for it.

HOLMAN [voice-over]: Edy and her husband Tom are both out of workand have four children to feed. Since Tom's bad back has made it difficult for him to find work, Edie must provide for the family. So she spent this harvest season collecting the leftover food from nearby farms.

Ms. HICKEY: When people have been out of work for a long time you start feeling that you're not, you know, capable or worth very much, and you can't help other people because you don't have the money of the resources to help them out. But the gleaning program gives you that.

HOLMAN [voice-over]: Gleaning is organized here through the Boulder Community Foodshare Rrogram. Edy and some of her neighbors signed up to glean for the excess squash and pumpkins on the Munson farm.Suzanne Kransky is an unemployed single mother trying not to go on welfare.

SUZANNE KRANSKY, gleaner: On food stamps I get about $140 a month, and two weeks into the month I don't have any vegetables left and I don't have any fruit. So it's like any vegetable I can get on that table for those children is real important to me.

FARMER: Here's a good ripe little acorn, a little yellow on the bottom.

HOLMAN [voice-over]: What is not taken home by the gleaners is shared with others, and that is most of the food. Last year, nearly 500 families benefited from the gleaning program in Boulder County. The vegetables gleaned here are distributed at Edy's low-income housing project, where word spreads quickly when the food arrives. [kids getting pumpkins] Active gleaning projects have taken hold in 11 states, and while farmers in those states do get a small tax credit on gleaned food, many of them simply enjoy seeing the impact of their giving. [gleaner saying grace]

Mr. MUNSON: It's a matter of taking care of the needs of the people at a local level rather than, you know, paying a lot of taxes, the money goes to Washington, gets caught up in a lot of the bureaucracy and losses in the system. Then it comes back, gets misdirected sometimes. This way we've got local people taking the food from us and giving it to people that really need it.

MacNEIL: Good night, Jim.

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