The MacNeil/Lehrer NewsHour

Intro

JIM LEHRER: Good evening. In the headlines this Monday, President Reagan pleaded with Congress to give his Nicaragua peace initiative a chance. South Africa announced the relaxation of two apartheid racial laws. Artificial heart patient Jack Burcham underwent emergency surgery, and 23 neo-Nazis were indicted in Seattle for involvement in murder and other crimes. Robin?

ROBERT MacNEIL: Here is tonight's NewsHour rundown. After the news summary three focus sections and an essay. First, tax reform: Elizabeth Brackett reports on efforts to sell the Bradley-Gephardt plan; then Congressmen Jack Kemp and Charles Schumer discuss their rival ideas. Then the latest on AIDS disease, the subject of a worldwide conference in Atlanta. We have an essay that looks back on the horrors of the Dust Bowl, and Kwame Holman reports on the impact of new Japanese industry on the state of Tennessee. News Summary

LEHRER: It was a big day at the White House for aid to the contras in Nicaragua. President Reagan read a statement in the Oval Office asking Congress for the $14 million. The President of Costa Rica came by to endorse Mr. Reagan's ceasefire negotiations proposal that is part of the request, and so did three big names from U.S. administrations past and present. First, the Reagan statement.

Pres. RONALD REAGAN: I'm asking Congress to give this peace initiative and democracy a chance. I'm asking Congress to work with me to stem the flood of refugees, the threat of hostile forces on our borders and a loss of faith in America's commitments around the world that could definitely result if we do not act quickly and responsibly. I'm asking Congress to join me in the bipartisan spirit so essential to our security in providing this small amount, $14 million, for the more than 15,000 Nicaraguans who are struggling for democracy. It is so little, yet such an important symbol of our resolve, a signal to all in Central America, and yes, to those everywhere in the world who depend on us.

LEHRER: The president of Costa Rica denied he was part of any lobbying campaign for contra aid, but through an interpreter gave support to Mr. Reagan's efforts.

LUIS ALBERTO MONGE, president of Costa Rica [through interpreter]: No, President Reagan didn't bring me up here to lobby. He wanted me to come and set forth the position of Costa Rica, and if the words that I say are received well by members of the Senate and of the House of Representatives, great, but I have no right to come here and lobby in a matter that is directly up to President Reagan and the two houses of the Congress of the United States. And so what President Reagan has proposed means that if we can find a path to peace and we can find a path to dialogue, the aid that he has requested, it's to be given to the insurgents, could be used to solve the economic and social development problems not only of Nicaragua but of the entire Central American area.

LEHRER: The three big U.S. names were James Schlesinger, Jeane Kirkpatrick and Zbigniew Brzezinski.

ZBIGNIEW BRZEZINSKI, former National Security Adviser, Carter administration: If we are to avoid a Vietnam in Central America, we better do what we are doing because otherwise the situation will deteriorate and the choices will become far more unpalatable for the United States.

JEANE KIRKPATRICK, former U.S. Ambassador to the U.N.: I will be doing my best to help the American people understand the stakes in this vote for us, that is, the United States, as well as the people of Central America.

JAMES SCHLESINGER, former Secretary of Defense: There is widespread support in Latin America amongst countries that at this point have been moderate in the quest for peace, and failure to support the President's program I think would undermine the efficacy of American foreign policy.

LEHRER: Votes in both the House and Senate on the contra aid request are due in the next two weeks. And the White House moved today to quiet criticism of its handling of President Reagan's May trip to Germany. Spokesman Larry Speakes said the President will go ahead with a planned visit to a German military cemetery, despite criticism by veterans and Jewish groups. But, Speakes told reporters, that presidential aide Mike Deaver and another White House official have been sent back to Germany. Their task is to come up with "other opportunities" for the Reagan visit next month. Earlier the White House had dropped plans for a trip to a World War II concentration camp. Robin?

MacNEIL: The South African government announced today that it is dropping one piece of the apartheid system, the laws banning marriage and sex between whites and non-whites. The government conceded that those laws were probably the most contentious and would repeal them. The anti-government United Democratic Front said the repeal would end unnecessary personal humiliation for mixed couples, but did not address the crucial issue of black political rights. In Washington, the State Department said this appeared to be a step toward a more just society but much more needs to be done.

South Africa also announced today that it will pull its troops out of Angola by the end of the week. South Africa invaded Angola in December '83 to eliminate anti-government guerrillas.

LEHRER: Back in this country, prisoners in the Odenville, Alabama, state prison took the warden and more than 20 others hostage today. The prisoners are armed with at least two pistols and a shotgun. A deputy warden and a prison social worker were beaten and released this morning. State police and National Guardsmen are now on alert at the prison, which is 25 miles east of Birmingham.

In Seattle an investigation of a neo-Nazi group known as The Order resulted in 23 federal grand-jury indictments today. Those indicted were linked to the murder of Jewish radio talk show host Alan Berg in Denver as well as taking $4 million in armored car and other robberies. We will hear more on today's indictments right after the news summary.

MacNEIL: A lie-detector test was cited today as new evidence in the case of a woman who said she was raped, saw a man go to prison for it and then said she'd changed her mind. Cathleen Crowell Webb and her lawyer, John McLario, appeared at a news conference inMenomonee Falls, Wisconsin. They said a lie-detector test showed Mrs. Webb was telling the truth when she said she lied at Gary Dotson's trial for rape. Dotson is back in prison after an Illinois judge decided last week that he didn't believe Mrs. Webb when she recanted.

LEHRER: There were three major medical stories today. In Atlanta an international conference on the disease AIDS opened amid reports the disease is on the verge of spreading dramatically to heterosexuals and others not considered in the usual high-risk category. We'll have a focus segment on all of it from Atlanta later in the program.

From Louisville the news was about Jack Burcham, the world's fifth and latest artificial heart recipient. He received his mechanical heart Sunday in an operation complicated by the size of his chest. Today there were further bleeding complications and another operation was performed. During the first operation the doctors found it difficult to maneuver the artificial heart into Burcham's chest, which they said is smaller than they expected. That part of the operation caused some strain on certain stitches in the chest cavity, and later blood began to seep from those stitches into the left side of Burcham's chest cavity. During the night he lost about 21 pints of blood. An additional tube was inserted into his chest to deal with that problem. And this morning doctors said it was being corrected. Two hours later they changed their minds and took Burcham into the operating room for exploratory surgery.

And medical story number three is from Washington where the federal government today signed off on new Baby Doe regulations. The rules require hospitals to treat severely disabled infants unless doctors say the infant is chronically and irreversibly comatose, when the treatment would prolong an inevitable death and when the treatment is so extreme or so unlikely to work that to administer it would be inhumane. The regulations specifically forbid considering the infant's quality of life after survival.

MacNEIL: The space shuttle Discovery will stay two extra days in orbit so that its crew can attempt a repair on the disabled satellite it launched on Saturday. The communications satellite failed to turn itself on, and NASA spent three days figuring out what to do. Today they decided. Tomorrow two astronauts will do a space walk to fit a homemade device to the Discovery's robot arm. On Wednesday they will rendezvous with the disabled satellite and will try to move the lever that will turn on the Satellite.

Closer to earth, Florida authorities began spraying today to stop a feared infestation by Mediterranean fruit flies. Here's a report by Patty Oades of WPLG-TV, Miami.

PATTY OADES, WPLG [voice-over]: The day broke cloudy and gloomy over North Dade, showering residents not only with light rain drops but with a fine mist of the pesticide Malathion. This Huey helicopter on loan from Lee County dropping 12 ounces per acre of a Malathion mixture over homes and businesses in North Dade.

ERNIE COLLINS, Florida Agriculture Dept.: What it's designed to do, for the insect to feed on the bait, take minute particles of the Malathion inside, and it acts as a stomach poison on the flies.

ODES [voice-over]: Today's aerial assault is the first of four weekly sprayings ordered by the state after inspectors discovered two new Medflies last week. Inside the 14-square-mile spray zone, Malathion fell on homes, cars, pets and sometimes even on its intended target, fruit trees, where Medflies lay their eggs.

MacNEIL: In the business news, Chrysler and Mitsubishi Motors agreed to build Mitsubishi cars in the United States. They hope the joint venture will begin producing up to 180,000 cars a year by the second half of 1988. The plant will be situated somewhere in the Middle West, and it's expected to employ 2,500 workers -- when it's operating at full capacity, that is.

The General Dynamics Corporation today denied that it was guilty of fraud in defense contracts. Speaking under oath, executive vice president Gordon McDonald told the Joint Economic Committee of Congress that it was untrue that the company had kept two sets of books while running up a billion in cost overruns. Senator William Proxmire told McDonald the denials just don't wash.

LEHRER: It should go without saying that midnight tonight is the deadline for filing your 1984 federal income tax returns. For those to whom that does come as shocking news, feel free to turn off the television and get on with other things. Some 10% of the nation's taxpayers usually do wait until the last day to file, and this year has been no different. The only new wrinkle today was a statement from the head of an Internal Revenue Service employees' union. Robert Tobias said, "This is the most disastrous income tax processing season in history," and blamed it all on Reagan administration cuts in the IRS budget. Administration officials quickly denied both counts. An IRS spokesman said they were having a banner week in reducing the backlog of unprocessed returns.

MacNEIL: In this year's Boston Marathon the favorites won both the men's and the women's divisions, both running away from their competition. Defending men's champion, Jeff Smith of England, made it two wins in a row, five minutes ahead of Gary Tuttle of Ventura, California. Lisa Larsen Wiedenbach of Marblehead, Massachusetts, was eight minutes ahead of Jacqueline Gareau of Canada. Tax Reform

MacNEIL: Next, on the day when most Americans are focused on taxes, we look at tax reform. It's something politicians have been talking about for decades, but 1985 may be a breakthrough year. Several major tax reform or simplification plans are pending in Congress with strong support from both parties. On Saturday, in his weekly radio address, President Reagan said he would unveil his own tax revision plan early next month. We start tonight with a look at two key Democrats who have been taking their own plan directly to the American people. Correspondent Elizabeth Brackett followed them across the country.

ELIZABETH BRACKETT [voice-over]: As millions of Americans struggle to finish their income tax returns before tonight's deadline, many have the same thought. There must be a better way.

THERESE NASH, computer marketing: It's very hard to sit down and try to figure out everything that's going to be to your benefit to write off. Finding out what applies to me, what applies to my tax bracket, whether it's beneficial for me to take out an IRA, buy land, etc. It's just a very confusing issue, I think.

BRACKETT: The tax code has become so complicated, last year three out of five Americans who filed a short tax form went to experts to help them fill it out.

[voice-over] New Jersey Senator Bill Bradley says this is absurd. On a cross-country tour to promote tax reform he tells audiences the time for tax simplification is now.

Sen. BILL BRADLEY, (D) New Jersey: The fact is that the income tax system is an embarrassment and that the voluntary compliance that has characterized the American income tax system is eroding dramatically.

BRACKETT [voice-over]: Heis joined in his cross-country crusade for tax reform by Missouri Congressman Richard Gephardt. The two first introduced the Bradley-Gephardt tax reform bill three years ago. Gephardt tells taxpayers the present tax code, constructed piecemeal over the years, is a disaster.

Rep. GEPHARDT, (D) Missouri: After seeing these laws made, as I've seen them made in the Ways and Means Committee, I begin to doubt that we know what we're doing. I mean, I'm serious. You wind up at three o'clock in the morning in a conference, everybody's half asleep, and we're trying to figure out national tax policy and how the economy should work.

BRACKETT [voice-over]: The Bradley-Gephardt FAIR reforms and simplifies teh tax system by cutting out tax loopholes and cutting down on tax deductions. In exchange, most Americans would get a lower tax rate. Under Bradley-Gephardt, there would be only three tax rates instead of today's 15. Fourteen percent for singles earning below $25,000, below $40,000 for married couples; 26% for singles earning between $25,000 and $37,000; between $40,000 and $65,000 for married couples. Thirty percent for singles earning over $37,000; over $65,000 for married couples. Corporations would pay one flat rate of 30%. Under the new rates, Bradley and Gephardt say, 70% of America's taxpayers would pay less; 30% would pay more. Standard deductions used by middle-income taxpayers -- mortgage interest, charitable contributions, state and local taxes and child care -- would be kept in order to lower the tax rate. But the rest, like investment tax credits and special treatment for capital gains, would be eliminated. And it is the elimination of deductions and loopholes that has the special interests screaming.

Rep. GEPHARDT: This fight over tax reform in Washington is going to be a real classic. This should be the political fight of the decade with all of the groups who have a problem here or there with tax reform as opposed to the average taxpayer, who may want this to happen.

BRACKETT: The tour did not shy away from its critics. In Houston Gephardt spoke before oil and gas industry executives, and here in Portland, Oregon, the insurance industry and the timber industry were included in a public hearing chaired by Gephardt on the FAIR tax.

ED STANLEY, insurance executive: And our concerns are not for the taxation of insurance companies or the income levels of people who sell insurance.

BRACKETT [voice-over]: Insurance executive Ed Stanley told Gephardt the FAIR tax plan is grossly unfair, not only to the insurance industry but to the 158 million Americans who hold insurance policies. That is because the FAIR tax plan proposes to count employee health care benefits and whole life insurance policies as taxable income.

Mr. STANLEY: We're setting off as many alarms as we can wind up, and I think you have to recognize we're in monthly or at least annual communication with 156 million policyholders, and as we begin to let them know that the ground rules are changing midstream, I think Congress will realize that this is a cornerstone -- owning a home and owning life insurance are two of the cornerstones of the American social system.

NARRATOR, TV commercial: Some people in Washington are considering a tax on your life and health insurance and pension benefits now provided by your employer.

BRACKETT [voice-over]: The insurance industry is already so geared up to fight tax reform it has started airing television commercials nationwide.

NARRATOR: Ask your elected officials where they stand on taxing employee benefits. We think it's for the birds. America's life and health insurance companies.

Sen. BRADLEY: Well, if they're told, as they will be in this commercial and a variety of other commercials that they're going to lose something out of tax reform without ever telling them what they're going to gain, obviously a lot of people are going to be angry and disturbed. But once they understand that they're going to get a lower tax rate and that means more money in their pocket, if they earn more they'll keep more, and it means greater security for their family, I think that they will be very positive toward tax reform.

BRACKETT [voice-over]: But there are industries, like the timber industry, that have been built on tax loopholes. Decisions on whether to plant trees, where to plant them and when to cut them are made based not on economic or market considerations but on the tax code. Paying lower taxes on income from capital gains is the biggest tax break for industries like timber. The FAIR tax plan cuts out that tax break on capital gains. Third-generation timberman Bond Starker says this would be disastrous for his operation.

BOND STARKER, forestry executive: The current proposal to treat capital gains as ordinary income at reduced rates would be devastating to our company and our industry. Based on our 1984 income, it would approximately double our taxes.

Rep. GEPHARDT: I don't think that we have to pay attention to or listen to everybody who says, "Hey, if you pass this bill I'm going to go out of business, the world's going to come to an end." I'm just not sure that's the case in all the times that I've heard that.

BRACKETT [voice-over]: Bradley and Gephardt know that to beat the special interests they need the support of average taxpayers. They also know tax reform is hard to understand and even harder to sell. So, as they crisscrossed the country on their 12-city whirlwind tour last week media appearances dominated every stop.

Sen. BRADLEY [on radio show]: What we're doing in this tour in talking about tax reform is to tell people, "Look, if you want a new income tax system with lower rates and fewer loopholes, you've got to involve yourself."

BRACKETT [voice-over]: The message remained constant: lower the tax rate, cut the loopholes and most Americans would pay lower taxes.

Sen. BRADLEY [on radio]: I think it's a disgrace that we have people who make a million dollars in income in this country who pay an effective tax rate of 17%.

BRACKETT [voice-over]: Outside the TV and radio studios, average taxpayers agree that the system is not fair.

RICHARD THOMAS, shipping clerk: I pay too much taxes, for sure. Like, for instance, if I would make -- if I were to work overtime, a lot of guys don't want to work overtime because their whole $150 go right to the government.

BRACKETT [voice-over]: The answer, Bradley tells listeners in his third media appearance of the morning, is his FAIR tax plan.

Sen. BRADLEY: I think that the greatest incentive for work, savings and investment is the lowest possible tax rate on profit, for everybody. The result is that if you earn more you're going to have more.

BRACKETT [voice-over]: In some cities Bradley's message did appear to be getting through. In Miami, where Bradley spoke to the Chamber of Commerce, two upper-income businessmen said they could support tax reform.

TOM NOONAN, banker: I'm for it, very definitely for it. I think the present tax code is chaotic. Most people don't understand it. Most people spend way, way too much time fooling around with the technicalities, and a lot of people who should be paying more tax get away with murder.

BERNARD JACOBSON, attorney: I think that there is a certain fairness that should exist where everyone pays a fair share of taxes. That isn't to say that altruistically I would like to give up 60 of my income that I work hard for, no.

BRACKETT [voice-over]: But in other cities it was harder to get the message out. In six tightly scheduled media appearances in Chicago, interviewers wanted to talk more about Bradley's former basketball career than his tax reform plan.

INTERVIEWER: Do you think the Bulls have a chance in the NBA Playoffs?

Sen. BRADLEY: Sure. Maybe next year.

INTERVIEWER: What do they need besides Jordan? They need one other guy.

Sen. BRADLEY: They need a center, they need a guard.

BRACKETT [voice-over]: The Chicago Tribune's coverage? Basketball point shaving; not a word about tax reform. Both Bradley and Gephardt say it will take a major political effort to get any tax reform bill passed. Though Bradley says there is a better chance of getting tax reform passed in this session of Congress than ever before.

Sen. BRADLEY: There is a convergence of interests between the parties for tax reform. There's something in it for each party. What's in it for Republicans? Why is Ronald Reagan expressing, or feinting in the direction that he might actually take on the special interests to get tax rates down? He's not stupid, that's why. People around him are very bright. They see the potential in the issue.

BRACKETT: Business groups like this one in Chicago got the schedule of the Bradley tour, some of them, predominantly Republican, but Bradley says that if the Democrats let President Reagan and the Republicans take over the issue of tax reform, the Democrats will have lost the chance to get back into the mainstream with the issue of economic growth and economic fairness. [voice-over] Though Bradley admits with President Reagan now coming out strongly for tax reform Democrats may lose some of their early momentum on the issue.

Sen. BRADLEY: Wherever the President goes he dominates the debate. It's a little bit like a whale in a swimming pool. But the fact of the matter is this is good for America.

BRACKETT [voice-over]: The often more partisan Gephardt wants to make sure Democrats get the credit for being out in front with an issue that may suddenly be a winner.

Rep. GEPHARDT: I think Democrats have been out there for three years. The President hasn't even gotten his bill together and in at this moment. Even if the President has clearly identified with it I think Democrats will get justifiable credit for having brought this up originally and having been an integral part of passing it in the Congress.

BRACKETT [voice-over]: Though there is little mention of compromise in their public speeches, both Bradley and Gephardt say privately they are willing to negotiate to get some kind of tax reform passed. They are willing, they say, to phase in some of the more controversial reforms during a designated transition period.

Rep. GEPHARDT: It's like anything else. You can't immediately go from one world to the next. You gotta have a reasonable transition. That's the hardest part of the whole thing.

BRACKETT [voice-over]: So the chances of passing some sort of tax reform are on the upswing. The special interests are digging in for a fight. Republicans and Democrats are digging in for a fight. And the taxpayer may just come out a winner, but not in time for tonight's midnight deadline.

MacNEIL: The tax reform battles are likely to begin in the House of Representatives. One key player will be Republican Jack Kemp of New York, sponsor of one other reform plan called FAST tax. That would establish a flat personal rate of 24% while allowing the poor and the middle class to exempt 20% of their income. A critic of that idea as well as the Bradley-Gephardt plan is Democrat Charles Schumer of New York. Congressman Schumer recently introduced his own tax plan, which calls for a minimum 25% tax on wealthy corporations and individuals.

Mr. Kemp, starting with you, Congressman Kemp, would you explain briefly what you don't like about Bradley-Gephardt.

Rep. JACK KEMP: It would be probably easy for Republicans to pick at Democrats and vice-versa on this issue, but basically there are far many more things that unite us, including Bradley and Gephardt with Kemp and Kasten in what I think will eventually be the Reagan or Regan or Baker bill, but primarily whatever differences, I think they can be overcome. But to answer your question specifically, Robin, the Bradley-Gephardt bill repeals the ACRS and goes to about 63 years of stretched --

MacNEIL: ACRS?

Rep. KEMP: The accelerated cost recovery system, I'm sorry. It spreads out the depreciation schedules that were shortened in 1981 to about 60 -- 43 years, I should say. It taxes capital gains at ordinary levels, or ordinary income levels, which I think would be a mistake. It takes out indexing, which would also be a mistake, in my opinion, because indexing is what protects middle-income taxpayers from being pushed up into marginally higher brackets with whatever the rate of inflation might be. Those are among the key ingredients which I think need to be hammered out by the various plans. One other thought. They don't allow for an increase in the exemption, the personal exemption, for children. The Kemp-Kasten plan would double the exemption from $1,000 to $2,000 and index the exemption because it hasn't, as you know, gone up since 1946.

MacNEIL: Right. Well, let me ask Congressman Schumer what you don't like about both Bradley-Gephardt and the Kemp-Kasten proposals.

Rep. CHARLES SCHUMER: Well, Robin, the American people are crying out for tax reform. They want a fairer tax system. But what does that mean to most people? The thing that the average American taxpayer most resents and the thing that presents the greatest danger to our tax system because people no longer believe in its validity, is the fact that very wealthy individuals and many, many corporations actually pay no tax or certainly pay less tax than the average individual pays. This drives people crazy. They are so upset about this. And none of the three plans deal with that issue adequately, in my opinion. None of them restore some element of progressivity to our tax system. Let me give you an amazing statistic.

MacNEIL: Progressivity meaning that people who earn more pay more.

Rep. SCHUMER: Pay more.

MacNEIL: Proportionately.

Rep. SCHUMER: Exactly. In 1961, corporate America and the top 1% of all individuals paid 43% of all federal taxes. In 1983, and this happened under Republican and Democratic administration alike, those two groups, corporate America and the top 1% of all wealthy individuals, paid only 17%. The middle class person is paying a much greater percentage of federal taxes than he or she used to, and that is what is burning America up. Two of the plans don't address that issue at all, and one of them only addresses it marginally, and that is the most important disagreement I have with the plans.

MacNEIL: What's your comment on that, Congressman Kemp?

Rep. KEMP: I think it is patently untrue. All three of the plans do address that issue. As far as I'm concerned, the Kemp-Kasten plan addresses it in the most positive and constructive way. We have a modified flat tax at 24% on personal income, a corporate rate of 35% and it does provide for people who earn less money to pay less tax by giving an exclusion of 20% on the first amount of -- 20% of wages up to $40,000. So low-income people would pay a lot less. Indeed, according to some statistics, Robin, about two million people would not pay any federal income tax because they would be so low on the ladder that up to about [TEXT OMITTED FROM SOURCE] of poverty they would have to pay no federal income tax. So we don't change -- we don't change the distribution of the tax burden. All three plans --

Rep. SCHUMER: That's the problem.

Rep. KEMP: -- maintain the distribution of the burden.

MacNEIL: And you were saying?

Rep. SCHUMER: And that is indeed the problem. That none of the three plans change the distribution that has so radically placed the burden on the middle class over the last 20 years. Let me say another point about the Kemp-Kasten bill. Everywhere you go people say, "Why isn't General Electric paying any taxes? Why isn't General Dynamics paying any taxes?" Under the Kemp plan, with its accelerated ACRS, those corporations could still pay no taxes.

MacNEIL: But under your plan?

Rep. SCHUMER: Under my plan, any corporation, any individual that makes over $150,000 a year income must pay 25% of their income as taxes, no ands, ifs or buts.

MacNEIL: And Senator Metzenbaum introduced one in which any corporation with more than $50,000 in profits would pay 15% of that.

Rep. SCHUMER: Right, I think $50,000 goes too low.

MacNEIL: Gentlemen, obviously we're not going to air all these differences tonight. I'd like to go back to you, Congressman Kemp. Is this going to be, as Senator Bradley said in our tape, a battle royal? He called it a real classic, the battle of the decade. Or is it likely to be negotiated out before it all hits the floor with all the special interests in there trying to keep hold onto their exemption?

Rep. KEMP: Well, I think there is an element of truth in both of those statements. There is going to be a battle; clearly some of those special interests need to be represented. My friend Charles Schumer made a valid point when he says that corporations who aren't paying tax should pay tax. Clearly, if we take out the investment tax credit, Robin, that's a $135 billion tax break to corporations and, when coupled with ACRS, in some cases it reduced the liability to less than nothing, if that's possible. We repeal that, and we should, by bringing down the corporate rate, maintaining the ACRS and taking out ITC. I think that is reform, and it's nice to know that Charles is now beginning to take an interest in a subject which Bradley and Gephardt and Kemp and Kasten and Regan and Baker have been championing for quite some time. I think we can hammer out our differences.

MacNEIL: I know that you've been approaching the administration to see whether there was some room for maneuver as they shape their -- and modification. And you've heard Bradley quoted as saying just now that they would be willing. Do you think it's possible that there will be a kind of lowest-common-denominator package to hit the floor?

Rep. KEMP: Well, I would use the term common denominator. I don't know about "low." We're all for lower rates. We all want reform. We want to take out the loopholes that only benefit those corporations who don't pay tax or those rich who can reduce their tax liability to zero, or what Bill Bradley talked about, 17% effective rate. And I think there is something to be said about the approach that is being taken by Treasury Secretary Jim Baker, who has been talking to Dan Rostenkowski, talking to Bob Packwood, talking to Bradley-Gephardt, Kemp-Kasten. I assume he'll be talking to Charles Schumer --

MacNEIL: They've been talking to you?

Rep. KEMP: And I think we can come up with an amalgam that would be good for the economy, good for people, good for tax simplification and fairness, and encourage the economy to expand in terms of jobs and productivity.

MacNEIL: Do you think that this is likely or that there's going to be some sort of agreed approach to the floor, one composite bill, in a sense, or that all these bills are going to end up on the floor with a battle royal between them?

Rep. SCHUMER: Well, I think they may try to compromise and come together with a bill, but I think what they're going to find is that as more and more people discover what's actually in these three bills they're going to come closer to the kind of plan that I am advocating. Because, for instance, there are many deductions such as fringe benefits -- not the three-martini lunch but the fellow who's making $25,000 a year and his employer pays $3,000 or $4,000 for health insurance -- that are taxed under the plans, under some of the plans. The people aren't going to want that. Even charitable deductions under some of the plans don't get their full deduction. They only get part. The advantage of our fair share tax plan is, it says if you want to use the tax system to help encourage certain social goods, go ahead and do it. Don't abuse the system so you pay less tax than anybody else. When the people examine all three plans, including the Kemp-Kasten plan, they will find that the thing they're crying about, corporations and wealthy individuals paying no tax, have not been addressed.

MacNEIL: But isn't it likely that the only people who will really study these plans in detail are going to be specialist journalists and the special interest groups that are in there fighting for their piece?

Rep. SCHUMER: Well, the special interest groups will be in there fighting for their piece, but I nd when it comes to paying taxes, if you talk about the charitable deduction, there's a large group of people out there interested in that. If you talk about fringe benefits, there's a large group of people interested in that. And you'd be amazed. On issues that affect people directly, they start studying the issue.

MacNEIL: Is this a must issue this year? Is it inevitable that we're going to come out at the end of the year with a tax reform bill, Congressman?

Rep. KEMP: I don't know that it's inevitable, but I certainly hope that it is inevitable. I hope that this is the last April 15th, Robin, that the American people from Buffalo to New York City and across this country have to face the complexity and the burden of a tax system in which last year alone there were 40 million telephone calls to the IRS trying to get some help for an individual taxpayer with the complexity of this system. And Mr. Schumer keeps talking about his minimum tax, but doesn't talk about dropping the rates at all. The Kemp-Kasten plan would leave the charitable deductions and leave many of those socially desirable goals. I would invite him into the process and not just to criticize Bradley-Gephardt, Kemp-Kasten or Regan.

Rep. SCHUMER: If I might, I think that --

MacNEIL: Okay, I just -- I'm sorry to interrupt. I'm sure this isn't the last we're going to be hearing about all this. Congressman Kemp, thank you; Congressman Schumer, thank you. AIDS Update

LEHRER: There is new fear about new sources and new victims of the disease called AIDS, acquired immune deficiency syndrome. It is the subject of our next focus segment. Charlayne Hunter-Gault is in charge. Charlayne?

CHARLAYNE HUNTER-GAULT: Jim, it's been four years now since doctors first identified AIDS in a handful of patients in New York and San Francisco. Immediately the numbers began to mushroom. As of last week the federal Centers for Disease Control had recorded 9,405 cases of AIDS, and nearly half of those victims have already died. Until now AIDS was believed to be confined mainly to three high-risk groups, homosexuals, intravenous drug abusers and hemophiliacs. But recently researchers have become increasingly concerned that the disease may be spreading to the heterosexual population. At today's meeting in Atlanta, new evidence was presented that heightens that concern. For more on that and other developments, we go now to Atlanta and Dr. James Curran, head of AIDS research at the Centers for Disease Control.

Dr. Curran, I understand there's new evidence in an African study that shows that members of a family or whoever living in the home of an AIDS victim have also contracted AIDS. What implications does that have for the problem here in the United States?

Dr. JAMES CURRAN: Well, Charlayne, some African studies have demonstrated that spouses of cases of AIDS and spouses of people infected are much more likely to be infected with the virus than other adult men and women. In addition, there has been some provocative data that shows that people who live in the same households as patients with AIDS in an African country are more likely to be infected than others. It's important, however, not to draw implications from this particular study to the United States, because similar studies in the United States have failed to indicate household transmission.

HUNTER-GAULT: So, are you saying that there is still no evidence in the United States that casual contact can result in the transmission of AIDS?

Dr. CURRAN: That's correct. We know the virus that causes AIDS, the AIDS virus has been present in the United States since the late 1970s, and over the past six to seven years we have not seen evidence of casual contact transmission.

HUNTER-GAULT: All right, so still, just for purposes of the record, the transmission of AIDS as far as we know it is strictly through sexual contact, is that right?

Dr. CURRAN: Yes. The overwhelming majority of the cases are transmitted through sexual contact, either heterosexual contact or homosexual contact, through sharing of IV drug abuse needles or apparatuses; less commonly through blood or blood products and from infected mothers to their newborns.

HUNTER-GAULT: All right, how significant are the cases of AIDS now among heterosexuals? Are the numbers growing?

Dr. CURRAN: Well, we know that at least in the United States about 1% or more have been documented to be heterosexually transmitted. Recently epidemiologic studies among persons from Haiti and from central African countries indicate that a majority of their cases are heterosexually transmitted. And some recent studies among prostitutes would suggest that there is transmission from that arena. A very small proportion of the total U.S. cases, however, can be attributed to heterosexual transmission.

HUNTER-GAULT: So how alarmed should we be about this new information, new evidence about AIDS in the heterosexual population?

Dr. CURRAN: I don't think alarm is appropriate. I think -- we know the virus has been present in the United States for several years. We have to recognize that the virus knows no sexual preference, that it is inevitable that heterosexual transmission will continue to occur, but probably at a slower rate than we've seen among homosexual men.

HUNTER-GAULT: But I mean, even to occur at a slower rate than is occurring among men, isn't that still quite alarming?

Dr. CURRAN: Well, I think it's very much of a cause for concern, and we can no longer deny that heterosexual transmission will be important, as it's important now and in the years to come.

HUNTER-GAULT: We've heard that some 9 million [sic] Americans have come down with AIDS. How many more do you expect in the coming weeks and months?

Dr. CURRAN: Well, there have been approximately 9,600 cases reported to date, since 1978, and we believe that another nine to 10 thousand cases will be diagnosed in the next year.

HUNTER-GAULT: Is there any way that people can protect themselves from contracting AIDS?

Dr. CURRAN: Well, unfortuntely the virus that causes AIDS takes several years to do so after infection, and we estimate that somewhere between 250,000 to 300,000 to a million people have been infected with the virus. And about one to two percent of them will develop the fatal complication AIDS during the next year. Many steps can be taken to prevent virus transmission, and I'm very optimistic about the blood supply. Recommendations for people to refrain from donating blood who have an increased risk for AIDS have been very successful, and very recently a blood test has been implemented to screen out infected donors.

HUNTER-GAULT: Have you heard of anything during your conference down there in Atlanta today that indicates there is some kind of cure about to be found or some kind of vaccine or treatment that can relieve this problem?

Dr. CURRAN: There's been a lot of exciting information presented about the structure of the virus, and this virus, only recently discovered, has been totally characterized. Some of the very best laboratories in the world are working on it and using the latest in technology. On the other hand, it's a very unusual virus, a virus which we can't say for sure there will be a vaccine. At this meeting, though, several new approaches to therapy and vaccines are being discussed.

HUNTER-GAULT: Have you had any success in coming up with anything to prolong the life of people who contract AIDS?

Dr. CURRAN: Well, I think the early diagnosis of many of the conditions that AIDS patients are susceptible to results in much better therapy and better care for these patients. Several new drugs have been tried for some of the opportunistic infections and cancers. And there has been some progress in this area.

HUNTER-GAULT: All right. Well, Dr. Curran, we'll follow the progress as it emerges, and thank you very much for being with us.

Dr. CURRAN: Thank you, Charlayne. Japan in Tennessee

MacNEIL: As we reported earlier, Chrysler and Mitsubishi agreed today to form a joint venture, building Japanese cars in the United States. That's only the latest in a long series of announcements that the Japanese are coming. Tonight we look at the situation in Tennessee, where an estimated 7,000 new jobs have been created by Japanese industry. Kwame Holman reports.

KWAME HOLMAN [voice-over]: It's a time for celebration at this Nissan plant outside Nashville, Tennessee. The Japanese manufacturer is undertaking a major expansion of its American assembly line. Nissan is not the only Japanese manufacturer in the state of Tennessee. In fact, every week seems to bring news that another Japanese company is setting down Tennessee roots. The week before Nissan's announcement, it was Komatsu, a manufacturer of earth-moving equipment that was receiving Tennessee Governor Lamar Alexander's welcome.

LAMAR ALEXANDER, Governor of Tennessee: Mr. Nogawa. Let's give him a good Tennessee welcome.

HOLMAN [voice-over]: Companies that make radios, television sets, printing supplies, tires, all in all 30 Japanese companies, have made their home in Tennessee. Tennessee now has 12 of all the Japanese capital investment in America. Why have all these firms settled in Tennessee? Why is the image of Tennessee changing from this [country & western Nashville] to this [Japanese logos]?

Gov. ALEXANDER: The Japanese business leaders tell me that they come to Tennessee because of its central location to the American market, because of its good business climate.

HOLMAN [voice-over]: But if it was only a business climate the Japanese sought, they could have chosen a dozen other states that offered them greater financial incentives. So what attracted them?

Dr. ESTHER SEEMAN, director, Japan Center: Tennesseeans and Japanese feel comfortable with each other. And when Tennesseeans go to Japan, they feel comfortable there and the Japanese feel comfortable here.

HOLMAN [voice-over]: Both Dr. Seeman and the governor have endless explanations for that feeling of cultural compatibility. They have lists of characteristics that Tennesseeans and Japanese share.

Dr. SEEMAN: We're talking about the cultural factors, the strong element of traditionalism.

Gov. ALEXANDER: The environment here is a lot like it is there.

Dr. SEEMAN: There's that whole feeling of civility and politeness.

Gov. ALEXANDER: The state flower here is the iris and the iris is important there.

Dr. SEEMAN: This very late modernization and late industrialization is common to both countries.

Gov. ALEXANDER: It's like being picked up on one side of the world and just placed on the other side of the world, but almost in exactly the same place.

Dr. SEEMAN: Somebody said to me, what would you pick as the most important thing that decides whether or not the Japanese will settle in a certain place, I would say that it would be an atmosphere of trust.

HOLMAN [voice-over]: The Japanese who have come to Tennessee agree with that analysis. Sadao Takeda is a senior vice president of Toshiba's microwave oven division. He prefers Tennessee to any other place he's lived in the United States.

SADAO TAKEDA, senior vice president, Toshiba America: In Tennessee this area is not so modernized and still everybody have traditional habit and traditional way.

EIKO TAKEDA: Tennessee personally is more open, everything open. So very easy to understand.

HOLMAN [voice-over]: In the end, it may not be all these shared qualities that matter as much as the fact that the state's chief executive spends his time thinking of ways that will make the Japanese feel at home.

Gov. ALEXANDER: We spend a little bit of time every week thinking of a way to make a gesture, to make a call, to market what we have, to develop new friendships in Japan, because it's a close network of people there; they listen to one another, they develop a consensus about a place, and I think they've developed one about us.

HOLMAN [voice-over]: One of these gestures is the state support for a Japan school, where once a week the children of Japanese executives can learn more about their native culture. For Mr. Takeda it's important that his daughters and his workers learn the best of both worlds.

Mr. TAKEDA: In Japan we have some good point and bad point. And also in the United States, American people have a good point and bad point. I want to try to have good point of each other. [singing "Toshiba" company song]

HOLMAN [voice-over]: But all is not hands across the assembly line. There are some Tennesseeans who resent the intrusion of so much industry into their rural landscape. Homer Gannon is a farmer who lives less than 10 miles from the Nissan plant.

HOMER GANNON, farmer: I just don't like to see all of the best farmland in this country to go under concrete. I see middle Tennessee becoming another Chicago, Detroit or Toledo, Ohio.

HOLMAN [voice-over]: Governor Alexander argues that change doesn't have to be bad.

Gov. ALEXANDER: In the town where I grew up in Tennessee, Alcoa came with a big aluminum plant in about 1913 and the mayor who got it there was run out of town and tarred and feathered. But for three generations it's provided people in Appalachia with good jobs.

HOLMAN [voice-over]: Homer Gannon may not like all the concrete, all the new people, but when Japanese companies are paying farmers $5,000 to $10,000 per acre, even he can't resist.

Mr. GANNON: I'm dickering right now to sell this place. I might as well. If you can't whip 'em, why join 'em.

HOLMAN [voice-over]: Farmers in Tennessee aren't the only ones bothered by foreign investment. In the last 10 years foreign investment in America has increased by 400%. It's not only happening in Tennessee, and it's not just the Japanese who are doing it. The British, the Dutch, the Saudi Arabians, the Mexicans are all buying American businesses or moving their own here. All this upsets June Collier, who runs an electronics firm that makes wiring for American cars. She thinks America is being colonized.

JUNE COLLIER, president, National Industries: All of our industries is on the verge of destruction. They're going to buy them for a song and sing it themselves. Then they will own this country. Do we want that? I don't want them to own this country. I want Americans. I don't want my childen saluting a different flag. I don't want my children owing their loyalty to someone that doesn't even speak their own language.

Gov. ALEXANDER: We've always looked west, and the west now includes Japan and a billion people in China and Malaysia, and that's where our interests lie and we better start getting comfortable with it.

HOLMAN [voice-over]: June Collier is not comfortable with that. She has sent letters to 50,000 people urging them to join her Citizens Against Foreign Control of America Foundation.

Ms. COLLIER: I don't want those countries influencing our political process, and right now we have got them telling us what we're going to do with our economics, with our trade life.

Gov. ALEXANDER: It's a two-way street. We invest everywhere in the world. We've done it for years. We've made a lot of money on it, and our standard of living is high because of it. We've got the biggest market in the world, and we need to let other people in it.

HOLMAN [voice-over]: Despite the opposition of people like June Collier, despite the fears of farmers like Homer Gannon, Governor Alexander predicts that Japanese investment in Tennessee will double over the next 10 years, and he hopes that that growing relationship will put Tennessee first in line for becoming one of Japan's favorite trading partners.

Gov. ALEXANDER: People would be asking, how in the world did an insular state like Tennessee get such a connection with the growing economy in Asia? And it was because we got our foot in the door just as the Japanese companies began to invest in America.

MacNEIL: That report was by Kwame Holman. Dust Bowl Remembered

LEHRER: We close tonight with an essay, a 50th anniversary essay about a day, April 14, 1935. Fifty years ago yesterday a black dust cloud called a black roller swept down and across parts of five southern plains states. Nobody had ever seen a dust storm like it before. They named it and remember it as Black Sunday. Our essayist is Jim Fisher, columnist for the Kansas City Times.

JIM FISHER [voice-over]: Here in a land some find dull, almost forbidding, and still others of us find imbued with a strange, awesome beauty, the people remember the day the land disappeared. Fifty years ago this past Sunday, known here as Black Sunday, the land, broken and exposed from its natural grass cover, blew away and America changed.

Actually the dust storms had been blowing across the land for four years since a drought clamped down in 1932. Those storms, killing children with the malady known as dust pneumonia, peppering windows, sickening and killing livestock and game, usually came out of the southwest, casting a brown haze over the land. But you could still see. In this storm, you couldn't see at all. On a pleasant spring day a black boiling cloud came out of the north, stretching across the horizon. No one had ever seen anything like it. In Cimarron County, Oklahoma, some people still remember.

HERSHEL THOMPSON: When we first seen it coming in we thought it was a storm cloud and then of course it got closer, you could see it wasn't. And you could see it rolling just like a big barrel rolling, actually, but when it settled in there wasn't a bit of wind. It's just as still as could be and it got dark instantly when it hit.

WESLEY SANDERS: You could turn your car lights on, headlights on, and you could not even tell that they were on. Even the dome light in your car. You could turn it on and you couldn't detect it was on.

NORMA GENE YOUNG: I was only 10 years old. I was kind of scared. But not as scared as some people were. We heard later a lot of people thought it was the end of the world rolling in.

FISHER [voice-over]: Dust sifted under window sills, cars plunged off roads, people wore dust respirators, appearing oddly as if they were ready for a wartime gas attack. And the topsoil drifted, moving like waves across the table-top flat land. And the photographs: children, women, men who had worked a lifetime on the land and now saw only drifts; a man and two boys running away from the wind and the blowing soil, to who knows where? And that picture by Erma Rothstein captured the era. And those pictures, once published, changed America. Never again would people be able to speak with absolute confidence of Jefferson's agrarian yeoman or how man's inner ills could be cured by a return to the land. What land? This? This? This?

Dust arrived in Washington a couple of days after Black Sunday, literally begriming the desks of the legislators. Up to that point the pleas of farm state representatives for aid had gone largely unheeded. The attitude of the federal government was that farmers sank or swam on their own. That changed with the Dust Bowl, and legislation was passed. At first land management laws, then broader ones. Laws that slowly made the American farmer dependent on government aid.

And actually, the Dust Bowl, a phrase coined the day after Black Sunday, could happen again. Something similar is now happening [TEXT OMITTED FROM SOURCE]