The MacNeil/Lehrer NewsHour

MR. MacNeil: Good evening. The Iraqi invasion of Kuwait again leads the news this Friday. Iraq strengthened its hold on Kuwait, but said it would begin withdrawing troops on Sunday. Iraq also moved its troops within five miles of the Saudi Arabian border, Pres. Bush warned Iraq that military action against Saudi Arabia would be unacceptable. Jim.

MR. LEHRER: We again devote the bulk of the program to Iraq's war against Kuwait. Our coverage includes reports on today's [FOCUS - TIGHTENING THE GRIP] developments, the analysis of Brian Urquhart, Robert Hormats and the British Ambassador to the United Nations, Sir Crispin Tickell, and the views of the top leaders of the United States Congress [FOCUS - VIEW FROM THE LEADERSHIP] and a four way conversation among Senate Majority Leader George Mitchell, Senate Minority Leader Bob Dole, House Speaker Tom Foley and House Minority Leader Bob Michel. FOCUS - TIGHTENING THE GRIP

MR. LEHRER: Iraq tightened its hold on Kuwait today, but at the same time announced the invasion force would begin withdrawing on Sunday. Mounting condemnation and the threat of economic and political isolation continued. There were reports throughout the day of scattered fighting in Kuwait's capital, but Iraqi troops continued to hold all key installations. Alex Thompson of Independent Television News narrates this report.

MR. THOMPSON: Kuwait City conquered and quiet, but isolated resistance remains beyond the city limits near Kuwait's military barracks, where there were reports of heavy bombardment. Few reports have emerged today, but there is evidence of a belated resistance from British supplied Kuwaiti forces initially surprised, outnumbered, and overwhelmed by the Iraqi Army.

HETTIE LUBBERDING, Dutch Journalist: Again this morning we woke up to the sound of shell fire and shooting in the streets not so far from where we are. There have been reports that there are Iraqi patrol boats in the sea off the Coast of Kuwait City. I haven't seen them myself, but there was definitely shell fire coming from the direction of the sea. The latest we've heard that, again, I haven't heard it for myself, is that Iraqi military tanks are moving in the street in front of the hotel and fighting has been reported from some other areas in Kuwait City. So there is still some resistance, although other large areas are certainly under the control of the Iraqi Army.

MR. THOMPSON: That picture of isolated resistance by Kuwaiti soldiers was confirmed this morning by the British Embassy before the phone lines went dead.

DAVID McDONOUGH, British Embassy, Kuwait: There are Kuwaiti tanks burning on the Gulf street, on the main Gulf road, and there are, outside of the hotel, there are Kuwaiti tanks on fire.

MR. THOMPSON: The embassy was damaged by gunfire, one British woman shot and slightly injured, wider casualties ranged from two hundred to over a thousand. Nobody really knows. Iraq's puppet government in Kuwait has spent the day enforcing a clamp down. Kuwait's city airport remains closed. All internal and international travel is suspended. The Iraqi Army has taken up defensive positions. All Kuwait's frontiers are sealed off by the invaders. International telephone lines have been cut. Kuwait Radio has fallen silent and the indefinite curfew remains. There was resistance from Kuwait Radio broadcasting clandestine appeals to the Arab world from a location beyond the capital.

ANNOUNCER: [Speaking through Interpreter] The blood of the innocent is being shed. Is there any help? Even the sparrows have been prevented from leaving their nests in search of food. Where is the pride of the Gulf? Where is the Arab pride? Where is the Islamic pride? Hasten to help your friend - Kuwait. Long live Kuwait free and proud under its leader.

MR. THOMPSON: One hour later listeners heard no more. Reports, unconfirmed by the Secretary, say that Iraqi forces have during the day moved steadily South through the Kuwaiti oil fields, massing near the Saudi Arabian frontier.

HETTIE LUBBERDING, Dutch Journalist: The report that we get here from diplomats is that the Iraqi Army is moving South to the oil fields in the Southern part of Kuwait. There's some ports there as well, commercial oil and cargo ports, and there's a Navy base I understand.

MR. THOMPSON: Meanwhile, in London, Kuwaiti exiles made their feelings felt. Their ambassador says Kuwait's still fighting.

GHAZI AL-RAYES, Kuwaiti Ambassador: It is the news, there is Israeli fierce fighting between our forces and their forces.

MR. THOMPSON: Do you have any word on casualties?

GHAZI AL-RAYES: No, no word on casualties.

MR. THOMPSON: And late this afternoon, the Emir of Kuwait's son was interviewed by French television. He said his father is in Southern Kuwait near the Saudi Arabian border fighting with the resistance against the Iraqis. Previous reports said he had fled.

MR. LEHRER: This afternoon, the U.S. State Department said Iraqi troops were within five to ten miles of Kuwait's border with Saudi Arabia and called that a "significant concern". The Associated Press and Reuters both reported the United States has informed its NATO allies it may use military force if Iraq attacks other countries in the Persian Gulf. The Pentagon announced a third Naval task force was being readied for the Middle East. The carrier Saratoga and the assault ship Inchon carry 15,000 sailors and U.S. Marines. They will join two other carrier groups already en route to the area. Before leaving for Camp David this afternoon, Pres. Bush was asked whether the United States would help defend Saudi Arabia against an Iraqi invasion.

PRES. BUSH: The status quo is unacceptable and further expansion will be even more unacceptable. And there are a lot of options. I'm not going to discuss what they are. We've already taken economic steps and all options are open, economic and otherwise. The integrity of Saudi Arabia, its freedom, are very, very important to the United States. And I've made that clear to King Fad in a very long conversation yesterday. If they ask for specific help, it depends obviously what it is, but I would be inclined to help in any way we possibly can. It's that serious, and all you have to do is look at the energy requirements of the world, plus the direct violation of international law by Saddam Hussein to understand why I feel so strongly about it.

MR. LEHRER: The U.S. government continued to press the Iraqi government for information about American oil workers missing in Kuwait. The State Department said 14 workers were rounded up by advancing Iraqi troops during the invasion. Robin.

MR. MacNeil: Today's strongest condemnation came in an unprecedented joint declaration by the U.S. and the Soviet Union. It was issued in Moscow by Soviet Foreign Minister Eduard Shevardnadze and Sec. of State Baker. Sec. Baker said they took the unusual step of calling for a cut off of all arms to Iraq.

JAMES BAKER, Secretary of State: The Soviet Union and the United States call on regional organizations, especially the League of Arab states, all Arab governments, as well as the non-aligned movement and the Islamic conference, to take all possible steps to ensure that the United Nations Security Council Resolution is carried out. Governments that engage in blatant aggression must know that the international community cannot and will not acquiesce in nor facilitate aggression.

MR. MacNeil: The first Arab confrontation of the Iraqi invasion came today from Egypt, which warned of serious repercussions for all of the Middle East. The statement was issued as the Arab League was meeting in Cairo. Carolyn Kerr of Independent Television News has a report.

MS. KERR: Arab ministers gathered at Cairo's central mosque for Friday prayers today. Thirty-six hours after the invasion crisis, Islam is about the only issue they're prepared to affirm publicly. In the center of the city, hundreds of Kuwaiti citizens crossed the Nile, defying laws Egyptian laws against public demonstrations to protest against their country's occupation by Iraq. "My country, Kuwait," they chanted, their patriotic slogans a conspicuous rebuke to the Arab League to openly condemn Iraq. The Gulf Corporation Council have now criticized their action, but the Kuwaitis along with the international community are still awaiting a united Arab response. The Kuwaitis took their protest to Cairo's most prestigious hotel, where they're addressed by their state minister to announce that a summit of heads of government was being convened tomorrow. As his fellow foreign ministers gathered this evening for their fourth consecutive session of emergency talks, the possibility is emerging that they may consider imposing economic sanctions on Iraq by supporting a Saudi move to cut Iraq's oil pipeline. The Iraqi minister was further isolated tonight by news that Iraqi troops were massing on the Saudi border.

MR. MacNeil: Late today the Arab League condemned Iraq, but a third of the members abstained from the vote. The denunciation called for immediate withdrawal and an emergency summit. Iraq's president has already agreed to attend one summit this weekend. Jordan's King Hussein held talks with him in Baghdad today and after the meeting, the King announced that the summit would take place on Sunday in Saudi Arabia. A Saudi official said Iraqi President Saddam Hussein would meet with Kuwait's Emir and other Arab leaders at that time.

MR. LEHRER: The world's financial markets had another volatile day. Crude oil prices rose sharply, as did spot gasoline prices at the wholesale level. In New York City, the Dow Jones Industrial Average closed with a loss of 55 points, after being down by more than 120 points earlier in the day. The Tokyo Stock Market fell more than 700 points after yesterday's nearly 600 point decline. Many countries are considering economic sanctions against Iraq. Ian Williams, Business Correspondent for Independent Television News, looks at what's at stake.

MR. WILLIAMS: A key test of European resolve will come in Rome tomorrow when EC officials discuss united economic action against Iraq. Italy holds the EC presidency and today it froze Kuwait's Italian assets to prevent them falling into Iraqi hands. Bonded likewise Kuwait owns 14 percent of Dame Le Benz, West Germany's biggest industrial company. Saddam Hussein's shaky economy is highly dependent on trade, and few doubt that it is vulnerable if the West can translate its early actions into tough sanctions. Last year, Iraq's oil exports were worth $13 billion. By far the biggest market was the United States, taking $2.4 billion worth. Turkey bought $1.6 billion's worth, just ahead of the Soviet Union's 1 1/2 billion. In addition, France, Italy, Britain, and West Germany were also smaller but still important Iraqi customers. Much of these exports depend on two large pipelines. One runs North through Iraq, through Turkey to the Mediterranean. The other crosses Saudi Arabia, joining another line down to the Red Sea. Both pipelines could be cut, though that would risk retaliation from Baghdad. Today Turkish government sources said they would consider any request from NATO allies to shut down its pipeline, but Ankora would certainly want protection and compensation for the loss of $300 million a year it earns from the pipeline and from the loss of lucrative exports to Baghdad. The United States is the biggest exporter to Iraq, with sales, mostly food stuffs and consumer goods, worth $1.2 billion last year. West Germany was next, selling a billion dollars worth of mostly machinery and industrial goods. Britain sold more than $700 million of exports. Japan and France came next, about 1/2 billion apiece. They have much at stake.

JONATHAN CRUSOE, "Middle East Economic Digest": The main problem is the amount of money that Iraq owes to the West. We're looking at anything upwards of $15 billion up to maybe 35 billion. Japan, for example, is owed $5 billion, France around 6 billion, and other European countries' levels running at about the same rate.

MR. WILLIAMS: The EC has a poor record on sanctions. Argentina and South Africa are the most recent faltering attempts. This time it could be different.

SIR CHRISTOPHER PROUT, Leader, European Democratic Group: I mean, you have a clear breach of international law here by Iraq, and I think minimum the community can do is to introduce economic sanctions I would hope very quickly. The EEC states in December are going to begin a conference to establish a common foreign policy. That's one of their declared objectives. If they don't succeed in adopting a common position very quickly on this, then I think the prospects for any concrete outcome of the intergovernmental conference in six months time are not going to be very great.

MR. WILLIAMS: That point won't be lost on EC leaders, here at their last summit, who face strong pressure from their own industries to avoid full scale sanctions.

MR. MacNeil: We get three perspectives on how the world community can respond to the Iraq invasion of Kuwait with sanctions or other economic devices. Sir Crispin Tickell is the British ambassador to the United Nations. Robert Hormats is a former assistant secretary of state and National Security Council staffer who served in four administrations. He is now vice chairman of Goldman Sachs International. Brian Urquhart is a former undersecretary general of the United Nations and was in charge of peacekeeping forces there for more than 10 years. He's now a scholar in residence at the Ford Foundation. Amb. Tickell, first of all, on the Iraqi announcement that they've set a schedule for withdrawing troops starting Sunday and adding that the Al-Sabah family, the family of the Emir, will never return, what does that say? Does that say this crisis is ending?

SIR CRISPIN TICKELL, Ambassador, Great Britain: I don't think it's ending at all. I think it shows that the weight of international opinion is beginning to have some effect, but I must look at this announcement carefully. What we require is exact compliance with the terms of the Security Council resolution which we passed the other night.

MR. MacNeil: And that required more than the withdrawal of troops?

AMB. TICKELL: It certainly did. And I don't think withdrawal of troops by itself will be any good at all, particularly as we've now heard that the puppet government is expected somehow to continue to exercise its shadowy reign over a country it doesn't own. So I think we must look at this text with a great deal of care. I haven't seen it myself. I think that we mustn't expect too much from it.

MR. MacNeil: Do you think that a withdrawal, Brian Urquhart, means that the crisis is on the wane and Iraq has begun to back down?

BRIAN URQUHART, Former UN Official: Not if the situation in Kuwait remains pretty much the same, and I think Crispin rightly says, the Security Council resolution is a very carefully thought out document, and if it isn't intimate, then the situation is not solved.

MR. MacNeil: How important, Sir Crispin Tickell, is it that the Arab League came out with a condemnation today and a demand for withdrawal?

AMB. TICKELL: I think it's important. One thing you didn't mention was the communique published by the Gulf states today which was very tough document, indeed, much tougher than that by the Arab League, but also of course, as you rightly say, there's the very important announcement by Foreign Minister Shevardnadze and Sec. of State Baker. There's been a deluge of announcements today. Now the Arab League one was not as strong as the Gulf states' one but it was good. Seven countries chose to abstain on it, but that represents a longstanding split in the Arab world. It rather underlines the importance we've all been attaching to the Arabs attending to Arab problems in the first instance, and also the difficulty that there is in persuading the Arab countries to act as one nation and to deal with this errant brother among them who has behaved in I think all agree an outrageous fashion.

MR. MacNeil: Robert Hormats in Washington, is this announcement that Iraq is going to withdraw, or will begin on Sunday, is that going to cool it off and make it harder for Washington and its allies to put sanctions in place and to persuade people to be tough with Iraq?

ROBERT HORMATS, Former State Department Official: I don't believe so. I think that installing a puppet government in Kuwait is going to be a transgression of international law. That government has no legitimacy at all, and it seems to me that if we simply acquiesce in a puppet government being established there and withdraw our intention to impose economic sanctions, that would be acquiescing in a victory by Iraq, and I think that we can continue to underscore that this is a breach of law and we ought to maintain the sanctions as long as an illegitimate government is in power there.

MR. MacNeil: Now let's turn to sanctions and economic pressures. You've been talking, I understand, in Washington today to various people. What is the U.S. view of how effective the moves so far have been in the coordination and the cooperation?

MR. HORMATS: Well, there are really three areas. The most effective so far has been the attempt to preempt the Iraqis from obtaining the resources of the government of Kuwait and the people of Kuwait. The banks have been consulted by the federal government, the treasury in particular. They've done an excellent job in immediately notifying the banks to block the assets of the Kuwaitis, to protect them, and other governments have now joined in with us, the Germans, the French, the British, and a number of others. That has worked very well. Second is the financial boycott of the Iraqis themselves. The Iraqis are big debtors and they owe usa lot of money but there are some Iraqi assets, and I believe that we've succeeded in blocking those Iraqi assets. The third is the trade embargo which involves exports to Iraq and Iraqi oil to the rest of the world. I think we can do pretty well in restricting exports to Iraq. They depend on food from the United States. If we can get food exports from the U.S., from the European community, Canada, Argentina, and perhaps India, that can be a very painful restriction, I think can work. The most difficult is oil, restricting imports of Iraqi oil. We're going to do that in the United States, but oil is a transferrable or fungible commodity. It can be switched around, and we limit imports or eliminate imports from Iraq, they can simply sell them elsewhere, unless there's a general boycott of Iraqi oil, because some countries want it and some countries are not going to restrict their imports.

MR. MacNeil: What do you expect, Crispin Tickell, is going to be the action taken by the European community this weekend?

AMB. TICKELL: Well, they're going to be discussing tomorrow what they're going to do, I can't forecast it, because the point of action is not, in fact, the European community. It is the United Nations Security Council. And we are thinking now about how we are to put into effect some of those articles under Chapter 7 of the Charter which permit pressure of the kind that Bob Hormats was mentioning. There's one he missed out which is very important which was mentioned by Minister Shevardnadze and Sec. of State Baker, which is an embargo on arms supplies to Iraq. Now we are discussing exactly what kinds of measures might be taken by the United Nations to give effect to that resolution, but they include all the things that Bob Hormats mentioned, also the idea of an arms embargo, and each country who would do it is trying to mobilize international force, international opinion to make it effective.

MR. MacNeil: But with your experience at the United Nations, will they be able to succeed in getting wide support for enforcing terms of the Security Council resolution unless a number of countries join in with the United States and say, we're not going to import any Iraqi oil? If the United States is the only country doing that, is that going to have much moral force with the rest of them?

MR. URQUHART: Well, I think it remains to be seen. There is a new situation since we last dealt with an aggression by Iraq in 1980, and that is that the Security Council is operating as a more or less unanimous body, and therefore it does, it seems to me at any rate, looking at it from the outside, constitute a new form of leadership in the world which I think that a lot of countries will respond to, and after all, this isn't a precedent which particularly small countries wish to see you go through without being challenged. This is, it's a very serious matter, so I would have thought it certainly remains to be seen what's happening. The situation is far more promising in that respect than it was let us say two or three years ago.

MR. MacNeil: Bob Hormats, is the U.S., the treasury and others, are they relying on the United Nations to carry this ball, or do they expect some other countries, the Europeans, the Japanese, whoever, to take individual, make individual announcements first?

MR. HORMATS: It's really the latter. I think there have been a lot of phone calls. The President himself has made phone calls, the Treasury has made calls, the Fed. The objective really is to line up the major financial and economic powers very quickly to impose these actions. Now it's good to have support from the UN and other groups, but particularly in the protection of Kuwaiti assets, they had to move very quickly, and that was really a series of phone calls. And I think in the other areas as well they're doing a lot of bilateral diplomacy and relying heavily on that.

MR. MacNeil: You say it's not primarily the EC, but for instance, there was one report today that said it would be crucial for the port of the Dutch and the port of Rotterdam, to say no Iraqi oil in here because it goes from Rotterdam throughout Western Europe. Are you saying it's not important what the members of the European Community decide and announce?

AMB. TICKELL: I'm not saying that. What I am saying is that there has to be a coordinated international response. And the place to coordinate that response must be the United Nations Security Council which passed that resolution only a few hours ago. And for that reason, we're now working, the five permanent members, all the members of the Security Council, on measures to put together measures to put real pressure on Iraq to fulfill the terms of the resolution.

MR. MacNeil: Describe that a little bit. What is happening? When will we see another meeting, or another result, and what precisely, what precise pressures?

AMB. TICKELL: What's happening is that the members of the Security Council are looking at texts which would put together an embargo, sanctions, if you like, on a whole variety of things. Bob Hormats mentioned some of them. I mentioned another. That text has got to be worked out by lawyers, by watching all the time the situation on the ground, but above all, we've got to get other people to work with us. We can't do this on our own, as several people have said. And so to coordinate them, to bring together the people who are reluctant, to make sure it's international and effective, requires a lot of work and that's what we're doing at the moment, and we shall be doing it over the weekend and I imagine into the beginning of next week.

MR. MacNeil: I see. Bob Hormats, how serious did you gather in Washington today is the effort to get the Saudis to cut the pipeline that carries Iraqi oil across Saudi Arabia?

MR. HORMATS: I think that's a very serious effort because, as your film indicated, the big pipelines through Turkey and through Saudi Arabia are very important. If those pipelines were interrupted or cut, it would be awfully difficult for the Iraqis to sell their oil and that would deprive them of a major source of foreign exchange. We're really concerned here in the long run about the overall oil picture, and if we can cut them off quickly and demonstrate solidarity among the Saudis, the Turks, and a lot of other countries, that's a powerful message and a major problem for them since they won't have any money?

MR. MacNeil: Will that be one of the means that is being considered by the Security Council?

AMB. TICKELL: The Security Council will be considering a ban on oil imports from Iraq. That's obviously one of the options we have to think about and that carries the implications which Bob Hormats has just referred to.

MR. MacNeil: Go back, Brian Urquhart, to the changed situation at the United Nations and explain why it would be more difficult with the United Nations structured the way it is today and with the East-West cooperation there is for the Iraqis ultimately to thumb their nose at the world community.

MR. URQUHART: Well, I think it was, the last time we dealt with this was, after all, in 1980, when there was really no effort at all. The first decision of the Security Council in 1980 didn't even mention the withdrawal of Iraqi troops from Iran, which infuriated the Iranians predictably enough, and it was a very half-hearted effort. And there were a great number of complicated reasons for that only one of which was the cold war situation and the Security Council. Now I think you have an extraordinary identity, as far as I can make out, sitting and listening to Crispin, an extraordinary identity of purpose among all the members of the Council, and that I think does have a considerable effect on other governments who are members of the United Nations. I mean, they see that this is a businesslike proceeding. Obviously, every regional group and every individual government, which has something to do about it, has to play their part, but at least for the first time, there is a sort of lead at the center which represents the entire community of nations, rather than a kind of a dog fight that there has been before.

MR. MacNeil: Is there, Crispin Tickell, is there confidence in the Security Council, in the governments you're talking to, that Saddam can be forced to give up Kuwait and behave himself by economic pressure?

AMB. TICKELL: I would say that everyone is hoping that that is the case. We begin by these meetings. You've heard that Pres. Bush said this evening that no option could be ruled out, but the right way to proceed, at least in the beginning, is to apply economic sanctions, and that's why we're thinking about economic sanctions. It's the beginning of any process. It's the only way in which you can make people understand how very serious it is and what he's done.

MR. MacNeil: We, Bob Hormats, how confident are the people you're talking to in Washington today that the economic pressure will work and work fairly quickly? I mean, we had a gentlemen on the program last night who said the only way to get Saddam out is to go in there with force and take him out, a Middle East journalist. Is Washington as confident as the UN that this will work?

MR. HORMATS: I think there is a level of confidence here. I don't think there is any guarantee. This man has driven, he's driven by motives that go beyond economics. There's a certain need for him to dominate the Middle East, and particularly dominate the Gulf, and economics alone, economic pressures alone are not going to do it. They can certainly make his life uncomfortable, but he can also use these sanctions to rally his domestic support around him, demonstrate the world's isolating him, and he needs to maintain support against the world, but I do think they can have an impact, if the Iraqis are deprived of food, if they're deprived of money as a result of cutting off oil, if they're deprived of a lot of other things, if they're deprived of the Kuwait bootie that they're trying to get their hands on, it will cause pain and I think will help. But it's no guarantee that they'll bring this man back out of Kuwait or force him to withdraw. But we need to do it I think to make a moral statement and the solidarity of the civilized world against him is very important and economic sanctions are a way of manifesting that solidarity at least at the moment.

MR. MacNeil: Finally, Brian Urquhart, what could this crisis mean, if the U.N. is reasonably successful in dealing with it, what could it means in terms of the prestige and evolution of the United Nations, itself?

MR. URQUHART: I don't think it's so much a question of the prestige of the United Nations. It's certainly a question of its evolution, and I think what it could dois to show the governments and the peoples of the world that the United Nations Charter, which was after all drafted before the end of World War II, and a lot of it was retrospectively to try to avoid the disasters of the 1930s which led to the appeasements which led to World War II, and if it were to show that there is some strength in that Charter and that governments can get together and enforce it, and it's a very big if, but if it could, I think it would be a major development in the evolution of world order, which is after all what we all need.

MR. MacNeil: Well, Brian Urquhart, Crispin Tickell, Bob Hormats, thank you for joining us. Jim. FOCUS - VIEW FROM THE LEADERSHIP

MR. LEHRER: Now to the four top leaders of the Congress of the United States. From the Senate, Majority Leader George Mitchell, Democrat of Maine, Minority Leader Bob Dole, Republican of Kansas, from the House, Speaker Tom Foley, Democrat of the State of Washington, Minority Leader Bob Michel, Republican of Illinois. Sen. Mitchell, beginning with you, do you believe Iraq is going to pull its troops out beginning on Sunday?

SEN. GEORGE MITCHELL, Majority Leader: I don't think it's possible to know that, and I certainly don't think anyone can accept their statements at face value since their statements regarding the pretext of the invasion were so transparently false. We obviously hope they will do that, but reliance on their word alone I think is not enough.

MR. LEHRER: Sen. Dole, if they do, in fact, withdraw their troops, does that mean it's all over, that the war is over, the crisis is over?

SEN. BOB DOLE, Minority Leader: No, I wouldn't think so. It all depends on the shape they leave Kuwait in and what they leave behind and what kind of government they have, and also what their intentions may be with reference to Saudi Arabia and other countries in the Gulf area. No, I think they've irreparably damaged themselves, the Iraqis have, Saddam Hussein has, and he's going to have a long, long recovery.

MR. LEHRER: Congressman Foley, Pres. Bush said today that if Saddam Hussein moves on Saudi Arabia, the United States will help Saudi Arabia. Do you support that?

REP. TOM FOLEY, Speaker: Absolutely. I think that any movement by Iraqi forces against Saudi Arabia would raise the most important security concerns for the United States. Obviously, any action that we might take of a military character would have to be at the invitation of Saudi Arabia and should be in concert with other nations, but I think the President has to consider that as a real possibility.

MR. LEHRER: What's the difference between Saudi Arabia and Kuwait, just a matter of size?

REP. FOLEY: Well, it's a matter, of course, of what one can do to forestall an invasion. The forces in Kuwait are very large, the Iraqi forces, much larger than would normally be needed to take control of the country, and they present a real problem in the effort to militarily oust him, but any force that might be brought by Iraq against Saudi Arabia would be something that could be resisted and with concerted action might actually be thwarted. We would have to be deeply concerned about what would occur in world energy supplies, in the strategic situation in the Gulf, if Kuwait were to move and actually attempt to overcome and occupy Saudi Arabia, and to control their oil as well as that of Iraq and Kuwait. So I don't think the President can avoid considering the possibility of joint military action if that unfortunate consequence should occur. But we don't know, of course, whether as Sen. Mitchell has said, these statements of withdrawal by the Iraqis can be trusted or not. We have to wait for events.

MR. LEHRER: Congressman Michel, do you believe the American people would support a U.S. military action, joint or otherwise, to help Kuwait or Saudi Arabia?

REP. BOB MICHEL, Minority Leader: Well, I think the American people would prefer that it be, No. 1, obviously at the invitation of the Saudis, but more important than that I think in a coordinated effort by all our allies. You know, this is the first real post cold war crisis that we're facing now under the new alignment of the nations here, and it seems to me they've all got to pull together and work in sync with one another, and if they don't all agree with us on what ought to be done here in this instance, then we do have a problem. But I think the diplomatic channels to get that, everybody pulling together, is the appropriate action to take, and I would agree with the Speaker, that, you know, Kuwait is a rather small geographic area. When you get beyond that, I don't think we can stand idly by and just let it happen, can't.

MR. LEHRER: Sen. Mitchell, how do you read the total world reaction thus far? Is the possibility there that there could be a unified world uproar and stop Saddam Hussein, that would be strong enough to stop him now?

SEN. MITCHELL: Yes, I think that is a possibility for a variety of reasons, an accidental confluence of events really. I think people around the world, and particularly in Western Europe and our hemisphere, are heartened by what's occurred in the last year or so, an end to the cold war, a breaking down of the divisions of the past, and a promise of a peaceful future for people the world over. Combined with the transparently naked aggressive act by Iraq, there isn't even a fig leaf to justify this action. It's as clear as a case of aggression can be. And I think third the possibility that concerted economic action could have an effect, there's no doubt in my mind that if the nations of the world combined in a meaningful way to impose strict economic sanctions, there could be a powerful effect within Iraq, itself. I hope that does occur. One cannot tell at this time, but certainly the ingredients are there for that kind of response.

MR. LEHRER: But, Sen. Dole, people say that all the evidence is to the contrary of what Sen. Mitchell said, that Saddam Hussein only understands power, that he does not understand quiet diplomacy, unified or otherwise?

SEN. DOLE: Well, he still has in a sense constituents in Iraq and if we have a total embargo, I think there will be some unrest and certainly some backlash as far as Saddam Hussein is concerned and his ability to govern that nation. But I think one thing we need to have is I think we need to have the Japanese weighing with sanctions. They've been a little reluctant. We need to hear from some of the Arab nations who as far as I know have not weighed in to condemn this action by Saddam Hussein. So if we have a total effort, then I think you'll feel the pinch.

MR. LEHRER: But that's never happened before, has it, Sen. Dole, ever against anybody in any situation?

SEN. DOLE: Not -- I don't know, I don't think it has. And there is a reluctance on some of the neighboring Arab states. I think they feel intimidated by Saddam Hussein. They are concerned about their own welfare and then there's a tendency for the Arab states to only concentrate on what they consider their primary enemy, the State of Israel. But the Japanese ought to join. I think there's a sentiment here in the Congress that if they don't do that, there may be an amendment offered to the defense bill, which is now pending before the Senate to give the President of the United States the authority to curtail imports from Japan if they refuse to cooperate in our efforts in Iraq.

MR. LEHRER: Congressman Foley, would you support that kind of action, in other words, in order to get this potential unified world reaction to use the power of the United States to bring people like Japan and any other reluctant ones along?

REP. FOLEY: I don't really think you can coerce cooperation in that way. The important thing is attempting to convince all of the importing countries that this kind of action by Iraq threatens stability in the region and threatens international law and so on, and my information is that the Japanese are cooperating in freezing assets, and I think we can expect that there is a real possibility because of what has been mentioned here, the naked aggression, the threats to other states, just the equilibrium that we'll create in international oil supplies, that we might well get voluntarily, even enthusiastically, the kind of economic sanction cooperation that hasn't existed in the past. I don't think it would be brought about by threats by us against those of us with whom we want to have cooperation.

MR. LEHRER: But Congressman Michel, it's never happened before on a voluntary basis. Do you think it'll happen this time?

REP. MICHEL: Well, we've got to always be hopeful about it, but as I indicated earlier, I don't know that unilaterally we want to make the kind of moves militarily without the full support of those who obviously are just as much affected by this as we are.

MR. LEHRER: Congressman Michel, some people have suggested today that our major ally in the Middle East is Israel. We support them militarily and with great sums of money. Is the possibility of some military action involving Israel in the cards, do you think?

REP. MICHEL: Well, I don't know if we ever got to that point, I don't see how frankly they'd be completely bystanders in this thing. They were the ones in the first place, you know, who were pointing up the intensity of what was happening in Iraq, and the very fact that what has happened could very well have happened, probably more concerned about that than those of us who have more or less been on the sidelines, as distinguished from being right at the focal point of that action, so I think we're grateful that we have as much strength as we think we have in the state of Israel and of course we've pretty much helped them to build that force up to defend themselves in just such kind of a situation.

MR. LEHRER: Sen. Dole, do you see a role for Israel in this?

SEN. DOLE: I wouldn't think so. It seems to me that Israel's response would be if there was an attack on them. Otherwise, I would not see a role for Israel at this time. They are a strong nation and they do have a unique relationship with the United States, but they're surrounded by hostile forces with the exception of Egypt, and somewhat to a lesser extent Jordan. They're concerned about Syria. They're certainly concerned about Iraq. But I would guess their role would come if, in fact, there was an effort by Saddam Hussein, a direct effort against the State of Israel.

MR. LEHRER: Sen. Mitchell, some supports of Saddam Hussein have suggested that there's not much difference between what he has done toward Kuwait than what the United States did vis-a-vis Panama, send in a military force, remove a ruler or people in charge we didn't like and then move out and leavethings pretty much the way we found them. How do you respond to that?

SEN. MITCHELL: Well, I think that's as transparent and false an argument as the pretext upon which the Iraqis invaded Kuwait in the first place. The situations are not in any way similar. The presence of the dictator in Panama was in direct contradiction to the freely expressed will of the Panamanian people in an election. The American presence was intended to vindicate the views of the people there. In the case of Iraq and Kuwait, it's very clear that this is naked aggression to enforce Iraq's economic claims and to enhance its economic interest and its political power interest, really not its interest, the interest of its dictator as opposed to that of his nation, so in my view, the situations are not analogous and the argument simply doesn't hold.

MR. LEHRER: Do you agree, Sen. Dole?

SEN. DOLE: Yes, I agree with that.

MR. LEHRER: Let's go on to the budget negotiations. Speaker Foley, the word Wednesday that Pres. Bush had given you Democrats until today to come up with a budget plan. Did you all do it?

REP. FOLEY: Well, there's no such ultimatum or demand. There was an interest in having the original plans laid down at some simultaneous point. Before that could actually be effected, there were some statements, apparently leaks about one of the plans, and that caused a certain amount of concern. It's now I think our general assumption that we will resume rather intensified negotiations immediately after Labor Day, looking for a conclusion of that in the second week of September, presenting the legislation to the House and the Senate, and completing the budget process by the beginning of the fiscal year and we've talked among ourselves about the precise scheduling of that in the House and the Senate, and I'm optimistic it can be achieved.

MR. LEHRER: Do you all have a plan, Speaker Foley? Is there a Democratic plan to reduce the budget deficit?

REP. FOLEY: There are elements of proposals that would probably be put together in an initial plan or statement in a very short time, but they haven't been agreed on in any final sense or ready to present yet.

MR. LEHRER: Congressman Michel, how did you read, you were at that meeting where the President spoke, and there were all kind of reports that the President had issued an ultimatum and the White House said no, he didn't, and then some of you all who came -- not you specifically -- but your Whip, Newt Gingrich, and others said the President is giving these guys 48 hours, and if Foley and Mitchell and these guys don't come up with something, then the President is going to beat their brains out over the August recess. What's going on?

REP. MICHEL: Well, sometimes I guess we each read it a little bit differently. There is no question the President was rather exercised over the fact that nothing really substantive has happened, other than our having gotten together a number of times, and that if there wasn't anything, frankly, that was of substance yet before we recessed, the President wanted to be free to say what he felt had to say during the course that we were in recess, but ultimatums, I didn't really read that into it. And I think the President's been, the leadership meetings that he's called in the White House with the four of us as leaders in conjunction with his people have pretty well agreed we couldn't make it by the time we broke, hopefully tonight or tomorrow, and that we will have to come back in September and really have a specific schedule to meet. Otherwise, we're going to have the enforcement mechanism of sequester do it for us.

REP. FOLEY: May I clarify a point, Jim?

MR. LEHRER: Right.

REP. FOLEY: It's sometimes assumed that because of these leaks that there has been one plan laid down by the Republican or administration side and the Democrats have not done so. It's not true. Neither side has formally laid on the table any plan or proposal of an overall character. We've discussed elements of it. Neither side has laid that down. There were some statements made about what might be in the Republican or administration plan that have somehow been taken to be the character of the plan, but no official or formal action has been taken in either direction.

MR. LEHRER: Sen. Mitchell, is what's going on here is just a game of chicken over who's going to first propose some kind of tax increase?

SEN. MITCHELL: No, I don't think it's that. This is a very serious effort by all concerned in difficult political and fiscal circumstances to reach an agreement that deals with a serious national problem. Now ours is a competent political system, and there are some on either side who are given to making I guess what you'd call political statements in an effort to make an immediate or tactical advantage, but I think that the common objective of most of the participants, not all, but most, is to try seriously to reach an agreement under the timetable that the Speaker has laid out, and I hope and expect that we're going to be able to do that. It's going to be very difficult, because the problems are large and the differences between us are great, but I think the common objective of us trying to do something about a serious national problem will outweigh those difficulties.

MR. LEHRER: Well, Sen. Dole, is it true that the administration and I guess you all, you other Republicans in the House and Senate are not going to put a plan on the table until the Democrats put a plan on the table?

SEN. DOLE: I don't think that's the case. I think what we're trying to fashion here is that there be plans on the table, a Republican plan and a Democratic plan, and they might not be the final offers. I mean, I think there will be some preliminary offers that may be modified by each side. And I'm still optimistic. I believe it can be done when we get back together in September. It's taken a great deal of time and I know sometimes the American people don't understand why it takes so long, but it's very difficult when you have a divided government in a sense, Republican President, Democratic Congress, and you have divisions within both parties in each the Senate and the House, it takes some time to bring everybody on board, and the bottom line around this town is how many votes do you have, and the bottom line is we need to pass something we agree on, and that's why it's taken so much time. We might have agreed on something 30 days ago and not have had the votes to pass it. That would have been a disaster.

MR. LEHRER: Sen. Dole, would the American people be right in saying up to this point at least politics has been the prevailing push, I mean, the prevailing wind in what's happened up till now?

SEN. DOLE: No. I think that may have been true early on. It's been eighty-six or seven days I think since the President called us together and said, let's try to deal with the deficit, and I think there was a period of posturing by some on both sides, but my view, most of that's behind us. We're now getting down to the nitty gritty and we're going to have to make some tough decisions, and they're not going to be pleasing to everyone in this country, and so I think both parties will take some heat. The President's taken a lot of heat. He's been out front. He feels like he hasn't gotten much, but in the final analysis, if it's a good package, I think it will benefit everyone.

MR. LEHRER: But Speaker Foley, Congressman Gingrich, the minority Whip, Mr. Michel's colleague, said that for all practical purposes what you all have been up to is over, the budget summit has failed, and there's nothing still going to happen as a result of this.

REP. FOLEY: Well, I think the -- I don't want to try to assess motives for Mr. Gingrich, but my opinion is that he doesn't want to see a budget summit reached, that he didn't agree with the President's call for one, he's criticized the President directly and indirectly for continuing to negotiate for one, and since he has that view, he's not likely to be one who can thought to be to want to encourage the process. But the President, the leaders who are here on this program, including of course the chairman, Dick Gephardt of Missouri, and the vast majority of the others in the budget summit want to reach an agreement, think it's important for the country, are determined to exercise their best efforts to do it and to bring one, as Sen. Dole says, that can be approved by the majority in the House and the Senate, that's a tall order, but it's one we're going to press forward with. In the meantime, those who have other views and have other purposes will try to discourage the process, even wreck it, but I don't think we can or should be deterred.

MR. LEHRER: Congressman Michel, would you agree with Congressman Foley's description of Congressman Gingrich's goal in all of this?

REP. MICHEL: Well, of course the Speaker and I have been through this several times before. This is the first time that Newt Gingrich has been included in this leadership group on this kind of a monumental task. And I think it takes a little bit of experience to recognize what really give and take actually has to take place on the part of both parties and yes, the White House, and the divisions within our respective parties in both bodies, and so eventually I think Mr. Gingrich will I think see the light, and if the agreement is compatible, we'll come along. We hope we can bring these divergent forces to come to just the kind of agreement that the Speaker says we have to have to get something eventually.

MR. LEHRER: But Congressman Michel, your home district is Peoria. Can you really explain this to the people of Peoria in a way that makes sense? You know, they've been reading about this summit and all these statements and nothing's happened, and yet, everybody says the budget deficit is a big deal and we've got to work hard and you guys meet and nothing happens.

REP. MICHEL: The question is right on target, because as a matter of fact, the problem is out there that the people I don't think generally have felt the urgency as it was reflected to us when the President first called us together. We see these figures and they look very menacing out there, and that something has got to come and happen and I don't think it really breaks, other than the overall feeling of people out there that why don't you do something about deficit reduction, but when we get down to the nitty gritty of the programs that will either have to be reduced or cut or their benefits shaved, then we're going to hear from the folks back home and the problem is it'll be in spades, and there's no good medicine to dole out here in order to meet this problem.

MR. LEHRER: Is that what it's all about, CongressmanFoley, the medicine is bad and nobody wants to be responsible for doling it out?

REP. FOLEY: Well, it's not only that. I mean, obviously, this is not something that anybody in public life is looking forward to, because it is, as Bob Michel says, some pretty sour medicine. But on the other hand, we have a problem that has to be addressed. I think the public understands that more and more and expects us to come forward responsibly and deal with it. But there are some policy questions as well. It's not a matter of just knowing what we should do and delay doing it because of fear of political reprisal. We have to bargain out some very tough decisions on which there is disagreement, disagreement not only between the parties, between the Congress and the administration, but among some of the members of the summit group and more importantly of the larger Congress. It is taking time, but the important thing, as Sen. Dole says, is that when we craft that budget agreement and assume that we'll have the strong support of the President and both parties, that we can also get the majorities of each House and the Senate to pass the legislation, because that's the bottom line, how many votes do you have, as Bob Dole says, and we think we need those votes, and the country needs those votes to get a budget in place.

MR. LEHRER: On another subject quickly, Sen. Dole, the House today passed campaign finance reform similar to the one that -- it's a Democratic version similar to the one the Senate passed this week. The President -- at least the word apparently is that the President is going to veto that if that's the way it comes out -- would you support that, should this bill be vetoed?

SEN. DOLE: Oh, I think the bill in its present form should be vetoed. But I'm again hoping that if there's a conference on the two bills that maybe the White House can weigh in and others who have different views can weigh in and reach some compromise. But there's no doubt in my mind that if it's much like the Senate bill and goes to the White House, it'll be vetoed, the veto will be sustained, and they'll still be without campaign finance reform. Again, that would be not the desired result, but I think in this case it would be the appropriate result.

MR. LEHRER: And Sen. Mitchell, how would you explain that to the people in Maine, after everything that's happened, the Keating Five, all the other abuses that have come up, the savings & loan thing, the HUD thing, everything, you name it, and yet the Congress of the United States still can't figure out a way to reform something called campaign financing, how do you explain to that?

SEN. MITCHELL: Well, of course, if the scenario you described occurred, the Congress would have figured it out but the President would have vetoed the bill. And in our system, it takes both to get a bill and I hope that we will finally get a bill. Bob Dole and I disagree on this. Of course, we disagreed during debate on the bill. I think the Senate bill is a very good bill, a strong bill, providing meaningful reform, and I hope that the President will sign it, so if we pass a good bill, and I understand and respect the fact there are differences of opinion on that, and the President vetoes it, it will be the President's responsibility for failing to permit a good bill to become law.

MR. LEHRER: Congressman Michel, that would be it, it would be Pres. Bush's fault, if there's no campaign finance reform?

REP. MICHEL: Jim, first of all, we haven't completed the action on the campaign reform legislation in the House. As soon as we're offthis program, I'm going back to offer the substitute which we hope to offer. We did conclude, however, the civil consideration of the civil rights legislation and that is one that because we failed on our substitute to have it adopted that the President had made notation to us by form of a letter that he would have to veto that piece of legislation unless the objectional features were not conferenced out with the Senate. Back to campaign reform just for a moment, if I might, there are some significant differences obviously between the two parties and the House. We've been complaining all week long or for some time that the rules are so restrictive under which we're considering it, we don't really have adequate time to vote to the specific to our piece of legislation which I think is in the best interests of the country. And so it's going to be a very telescoped minimal package that is ultimately passed by the House and gone to conference with the Senate. Maybe it can be enlarged at that point, but that would be difficult.

MR. LEHRER: All right. Well, gentlemen, Senators, Congressmen, thank you all four very much for being with us tonight. RECAP

MR. MacNeil: In other news today, the Labor Department reported the nation's unemployment rate rose 5.5 percent in July. That's the highest jobless rate in two years. On Capitol Hill, the House passed a Democratic version of a civil rights bill. It is nearly identical to a bill passed by the Senate last month. President Bush has said he would veto the legislation because he has said it contains unfair hiring quotas. In East Germany today, the prime minister called for joint elections with West Germany on October 14th. That's six weeks earlier than planned. Lotar DeMazier said he wanted unity as quickly as possibly. He said the earlier elections would improve the climate for investment in East Germany. West German Chancellor Helmut Kohl welcomed the proposal. Good night, Jim.

MR. LEHRER: Good night, Robin. Have a nice weekend. We'll see you on Monday night with continued coverage of developments in the Iraqi War against Kuwait. I'm Jim Lehrer. Thank you and good night.