The MacNeil/Lehrer NewsHour

Intro

JIM LEHRER: Good evening. In the headlines today, President Reagan's State of the Union message will stress concern for the American family, while the Democrats' response will warn against too much emphasis on defense. Israel forced down a Libyan plane looking for terrorists who weren't there. And there's a report the Russians want $2 million for freeing dissident Anatoly Shcharansky. The details are in our news summary coming up. Robin?

ROBERT MacNEIL: After the news summary we have a documentary report from correspondent Charles Krause on the Philippines election. Congress-watcher Norm Ornstein previews tonight's State of the Union message, then a roundup of governors' views of the state of the states with analysis by journalist Neil Pierce. We close with a documentary look at the troubled Caribbean nation of Haiti.News Summary

LEHRER: President Reagan will sound the alarm for the American family tonight in his State of the Union message. Advance word from White House assistants say Mr. Reagan wants the welfare system and its effect on families to be studied. His speech, which is to be shorter and more general than previous ones, is also aimed at redefining the role of government in family and all other American life, they say. His fiscal 1987 budget gets officially unveiled tomorrow. Today copies of the more-than-1,000-page document came off the presses at the U.S. Printing Office. Advance word on the President's budget proposal says it calls for increases in defense spending, Social Security and space, while freezing or cutting all other government programs. The Democratic State of the Union response will be broadcast tonight right after Mr. Reagan's speech. One of the Democratic speakers is to be former Virginia governor Charles Robb. At a pre-speech briefing he warned against unrestrained defense spending.

CHARLES ROBB, (D) former governor, Virginia: We are particularly concerned that this country be prepared to defend its basic values and its freedoms. but we recognize that spending alone isn't the answer to this maintaining this strength militarily, economically or otherwise. We're concerned about weapons systems that actually work and troops that are trained to use those weapons. Now, we're also very much concerned about the health of the economy, and recognizing that we cannot maintain a healthy economy if we don't do something realistic to balance our federal checkbook.

LEHRER: One Reagan administration plan to raise some federal dollars received Senate approval today. By a 54-to-39 vote the Senate agreed to sell Conrail to the Norfolk & Southern Railroad. The sale of the 15,000-mile freight rail system is a key part of the administration's plans for privatization, the sale of federal property. The Conrail plan now goes to the House. Robin?

MacNEIL: NASA said today it may have located one of the booster rockets from the Challenger shuttle. Sonar soundings underwater have located an object that may be one of those boosters. The right booster is the chief suspect in the spacecraft explosion a week ago today. The search for debris from the shuttle on the ocean surface was sharply cut back today as NASA concentrated on probing the ocean bottom. The Navy pullut a tenth of the total weight of the 123-ton shuttle and its cargo. Ships with sonar and robot submarines are now searching the sea bottom for two principal objects, the right booster rocket and the crew cabin.

LEHRER: The Soviet Union has demanded $2 million for the release of Soviet dissident Anatoly Shcharansky. That was the report today from the West German newspaper Bild, which had reported the original Shcharansky swap story. West German Chancellor Helmut Kohl today confirmed the exchange but not the payment demand. Other sources said the swap is now set for next week. Shcharansky and other unnamed persons will be exchanged on a Berlin bridge for several Soviet and Eastern bloc spies, they say.

MacNEIL: Israeli jets today forced a Libyan plane to land in an apparent search for a top Palestinian terrorist, but released it when he wasn't found. The plane, an executive jet made in the United States, was carrying a crew of three and nine passengers, including a high-ranking official of the governing party in Syria. Comments by Israeli ministers later suggested they expected to catch Abu Nidal, leader of a Palestinian faction linked with the recent attacks on Rome and Vienna airports. The plane was flying to Damascus from Tripoli, Libya, where several Palestinian guerrilla leaders attended a weekend meeting. The interception occurred about 50 miles east of Cyprus. Syria and Libya both accused Israel of air piracy. The U.S. State Department said there was no U.S. military involvement in the intercept.

In Tripoli that meeting of radical Arab and Palestinian groups agreed to form a revolutionary force and suicide squads to strike at American interests if the U.S. attacked Libya or any Arab country. One of those attending was Abdullah al-Ahmar, an official of Syria's ruling Baath party who was aboard the plane forced down by Israel.

LEHRER: The price of oil fell again today, down below $16 a barrel for some oil on some international markets. An OPEC committee meeting in Vienna failed to reach an agreement on what to do about the price drop and the meeting was adjourned. One oil minister said the oil cartel is in an international price war, whether they like it or not. He said a full OPEC membership meeting is expected next month in Geneva to see if a strategy for coping can be reached.

MacNEIL: In Manila, both President Ferdinand Marcos and his opponent, Corazon Aquino, were out asking for votes today as the presidential campaign drew towards a close. Marcos backed out of an agreement to appear with Mrs. Aquino on an American television program, then challenged her to a debate on Philippines television, which she declined. One of Mrs. Aquino's reasons for saying no to a debate was that she was scheduled to attend a rally in Manila, which brought out one of the biggest crowds the city has seen in years. Reporters estimated the number is more than half a million. Before nightfall the crowd was already large as it was just beginning to gather in Manila's biggest park. The crowd gave hearty cheers to Mrs. Aquino and booed the name of President Marcos, his wife and family. Officially the campaign ends tomorrow night, and the election is on Friday. Tomorrow it will be President Marcos' turn to campaign in the same park. Today he was speaking at an indoor meeting before a small audience.

LEHRER: And finally in the news of this day, another bomb exploded in Paris. It went off near a bookstore in the Latin Quarter of the French capital. Four people were hurt. Last night a bomb exploded in a shopping arcade, injuring eight, and a third one was found and defused on the third story of the Eiffel Tower. A group saying it wants the release of Arab prisoners claimed responsibility for the arcade blast. There have been no claims yet on the other two.

MacNEIL: That's the end of our news summary. Coming up, Charles Krause with a documentary report on the Philippines election; a preview of the State of the Union; a survey of the state of the states; and a documentary look at the upheaval in Haiti. Challenging Marcos.

LEHRER: That most remarkable Philippine presidential ele :ion is inow only two days away. We have a report on the campaign and the prospects from our special reporting team of correspondent Charles Krause and producer Susan Mills.

CHARLES KRAUSE [voice-over]: From Manila to Mindanao the campaign has had all the color and excitement of a political thriller. The challenger, Cory Aquino, enormously popular, battling against the man she calls an evil genius. The incumbent, Ferdinand Marcos, brilliant but ruthless, a wily autocrat now faced with the worst crisis in his 20 years as president. The political drama: can Marcos, now believed to be gravely ill, keep his grip on power? Or will Mrs. Aquino, relying on an army of volunteers, defeat the man she blames for the murder of her husband, Benigno Aquino, two years ago? At stake: future political stability and pro-Western government in the Philippines, a country already threatened by guerrilla insurgency, a country of great strategic importance to the United States.

CORAZON AQUINO, Philippines presidential candidate: The choice in this election is between a dictatorship founded on deceit -- the Marcos program -- and democracy, founded on the freely expressed will of the people -- the Cory Aquino program. Mr. Marcos is determined to remain permanent dictator, come hell or high water. I am determined to stop him.

FERDINAND MARCOS, President of the Philippines: We need to see things as they are in reality. We do not operate in a vacuum. My opponent grossly simplifies when she reduces the complex world of politics into a Manichean battle between good and evil. If she truly believes the caricature she has made of me, then she is dangerously naive. If she does not, if she's just making rhetorical points to advance her cause, then she is not as sincere as she pretends to be.

KRAUSE [voice-over]: There are no reliable public opinion polls to determine which of the candidates is winning the rhetorical battle, but in just six weeks, and against all odds, Cory Aquino has mounted a surprisingly credible campaign. Rich and poor alike often wait hours just to hear or touch her. A genuinely reluctant candidate when the campaign began, her crowds are large and enthusiastic. They cheer as she denounces poverty, government corruption and military abuses. They call her Joan of Arc. For millions of Filipinos she alone offers hope and faith in a country long resigned to political cynicism and fear. Cory's Crusaders, an army of do-gooders with little political experience. They're forced to sell tee shirts, buttons and bumper stickers, paraphernalia the Marcos campaign gives for free. With pride and humility Mrs. Aquino tells of a poor child who gave used pencils, all that he had, to her campaign. Wealthy businessmen have donated airplanes, computers, even the Coaster that serves as her presidential limousine. As we traveled with Mrs. Aquino last weekend, we asked her why she thinks her campaign has ignited so much enthusiasm.

Mrs. AQUINO: It's just that 20 years of Marcos has been just too much for the Filipino people, and they see in me the hope, you know, for the changes that they have all been looking for and waiting for.

KRAUSE: And is yours a kind of moral crusade?

Mrs. AQUINO: It is. When I accepted the draft I said that I considered it some kind of mission, you know, because I knew that reforms were really necessary and that I have told the people there is nothing in this for me personally because if I were only concerned about myself, probably I would have returned to the United States after Ninoy's assassination, or else I would just have opted for the easier life of staying at home and just being with my family.

KRAUSE: Well, what is it that's making you do this?

Mrs. AQUINO: Well, I refer to what my husband said a long time ago, that if there is something one can do, then one should do that particular thing because all of that person's life -- maybe I better say it in my own way. If there's something that only I could do, and if I did not do that some thing, then all of my life I would regret not having done it. And this is what has really made me decide to accept this role, no matter how difficult I knew it would be. And I have no regrets and the people have shown me that they entirely support me. And as I've said, this is such a unique situation, and I know that this particular election will never be repeated.

KRAUSE: Do you think that you and an army of volunteers really can defeat a man who has been in power for 20 years and who has the whole apparatus of government at his disposal?

Mrs. AQUINO: Yes, I really believe that. This is the power of the people finally manifesting itself. It's, you know, Charles, this is something that -- it's a complete, how should I say, a surprise to many of the jaded politicians. You know, I have been going with them, they have been helping me in some of the campaigns, and they keep on saying, "We have never witnessed anything like this." And it's just so invigorating for these so-called retired politicians. I know that Americans are so unbelieving that anybody can defeat such a powerful man like Marcos, but you just have to have faith, that, you know, there is such a thing as people power, and this is it. There is also God to reckon with in this whole exercise. I know that God is with us in this fight of ours, and that is why I am so encouraged, and I am really -- I have never been this confident about anything in my life.

KRAUSE [voice-over]: But if Mrs. Aquino is confident, so too officially is President Marcos. For a man reportedly dying, he has mounted a vigorous and well-orchestrated campaign. At his rallies there is always lavish entertainment. Then Imelda Marcos, the first lady, the minister of human settlements, the governor of Metro-Manila, perhaps the most controversial figure in the Philippines. A born entertainer, she gives back a small token of the vast fortune the opposition claims she and her husband have stolen from the country. Then, on a good day, the president himself. He accuses Mrs. Aquino of inexperience, of being soft on communism because she's proposed a dialogue with the guerrillas. He warns of grave dangers if she's elected.

Pres. MARCOS: She may even proclaim martial law and arrest many of us! But we will fight them and there would be a bloody civil war. I for one would not agree to the communists taking over the entire government. You would not agree to this.

KRAUSE [voice-over]: But for the most part his crowds are unenthusiastic, a captive audience. To win the election, President Marcos is clearly not relying on public enthusiasm. Instead, he's relying on the powers of his office, the government itself, and the political machine he's built up over 20 years. Every day for weeks he's been raising government salaries or cutting fuel prices, reminding voters that he can still help them or hurt them. He has his own political party, the KBL. Many of its claimed eight million members are government employees or local officials called barangay captains. The equivalent of old-fashioned ward leaders in the United States, they've been given money to work for Marcos and allegedly to pay voters on election day.

[interviewing] How much money?

MARCOS LOYALIST, unidentified: Five hundred to 700.

KRAUSE: Pesos.

MARCOS SUPPORTER: Pesos.

KRAUSE [voice-over]: The man we talked to is a member of a group called Loyalists for Marcos. He was afraid to be interviewed on camera.

[interviewing] Do barangay officials get money, too?

MARCOS LOYALIST: Yes.

KRAUSE: How much?

MARCOS LOYALIST: Well, it depends on the leader, the chairman, and I guess the lowest is 1,500 to 5,000. I don't know exactly how much. But involve thousand of pesos.

KRAUSE: Do you know of anyone, any of your friends, anyone else, who has been offered money by Mrs. Aquino?

MARCOS LOYALIST: No. Still, they have some donation. We buy their stickers, we buy these tee shirts. Everything we buy we pay for. But the tee shirts from the KBL we just get free.

KRAUSE: How do people react, how do you react, when they offer you money, tee shirts and all the rest to vote for President Marcos?

MARCOS LOYALIST: Most of these people, you know, they just need the money badly, you know, in a community like that, you know, you just stand these for 20 pesos. Sometimes it's big money for them. That's what it's for. And then sometimes you've been influenced by your boss or your leader [unintelligible], you know, like that.

KRAUSE [voice-over]: According to official figures, 16 billion pesos, almost a billion dollars, is missing from the central bank, withdrawn without explanation by the government since the Marcos campaign began two months ago. The opposition believes Marcos is desperate. Adrian Cristobal, the presidential spokesman, does not deny it.

ADRIAN CRISTOBAL, presidential spokesman: When he first ran for president in 1965 he was desperate. In 1969 he was desperate. And so in 1986 he is desperate. That is his fighting style. He is always running scared. He doesn't take anything for granted.

KRAUSE [voice-over]: Jaime Ongpin, is a leading Filipino businessman and a close adviser to Mrs. Aquino.

[interviewing] Do you think he's determined to win this election at all costs?

JAIME ONGPIN, Aquino adviser: I think he is, yes. And I think it shows in the manner, and I say in the highly irresponsible manner, in which he has been conducting this campaign. It shows in the fact that every time he is consistently trying to block her from getting equal access to media, which is guaranteed under the election code, but is honored more in the breach than in the observance. I think it's evident in the way that they are just throwing money like it was water.

KRAUSE [voice-over]: With the election just days away, Mrs. Aquino is fighting an uphill battle against time, money and the president's powerful political machine. The crowds are with her, but the question is whether she can turn their enthusiasm into a clear-cut majority on election day.

Mr. CRISTOBAL: That is the important thing, because my own analysis of the situation is that it is not enough for a candidate to be popular. She or he needs a base. It has been true of all presidential elections, even with Magsaysay or with Marcos. The personal popularity of the candidate must be augmented by the party base. And Cory Aquino has a thin party base.

Mr. ONGPIN: We have no doubt in our minds that she can win the vote. In fact, we believe she has already done that. We expect that the country will vote, nationwide, at least 60-40, maybe 75-25 in her favor. The thing to do is make sure that that vote is counted correctly.

KRAUSE [voice-over]: Stephan Bosworth, the U.S. ambassador.

[voice-over] Is it conceivable to you that President Marcos could win a free and fair election in this country?

STEPHEN BOSWORTH, U.S. Ambassador to the Philippines: I think it is conceivable. I think it's conceivable that Mrs. Aquino could win a free and fair election. You know, we don't have any way of doing in-depth samplings of Filipino political opinion. That's not our role here. Our role is to concentrate on the process, to continue to express our strong desire that it be seen by the Filipinos as a fair process. And then, if that is the result, we are, as we've stated many times, prepared to work very seriously with that government to try to address the problems of this country.

KRAUSE [voice-over]: The Philippines has not had a presidential election for 17 years. Mrs. Aquino demonstrated again tonight that her campaign has aroused political passions long buried by authoritarian rule. But President Marcos could still emerge the legitimate winner. The fear is that if neither candidate wins a credible victory on Friday the passions of the campaign could turn violent. If there's massive fraud, millions of Filipinos might throw their allegiance to communist-led guerrillas, the outcome most feared by the United States.

MacNEIL: That report was by special correspondent Charles Krause, who will be reporting again from Manila later in the week. Still to come on the NewsHour, a preview of tonight's State of the Union, a survey of the state of the states, and a documentary report on Haiti. State of the Union

LEHRER: This is State of the Union night in America, a week late because of the space shuttle tragedy. President Reagan offers his assessment of the country and its government first, in a nationally televised speech to a joint session of Congress. The Democrats follow it with a response, also on national television. Both are expected to be shorter than usual and more general than usual, and we start the pre-game festivities now in true Superbowl fashion with Norman Ornstein, the political scientist who is a resident scholar at the American Enterprise Institute and a frequent contributor of wisdom on this program. Norm, is this really going to be that different, tonight's State of the Union message?

NORMAN ORNSTEIN: Remember, Jim, first we won't be giving point spreads here, so it is a little bit different than --

LEHRER: I agree. Exactly. Exactly.

Mr. ORNSTEIN: There are clearly some differences. This is something that happens, as we've looked at the past at presidents who enter their sixth year, roughly, around that time. They get bored with the old format of the State of the Union messages, laundry lists of things, and innovate, and Reagan is doing the same thing. And really in a similar fashion, say, to Eisenhower in his sixth year. It's going to be a short speech with highlights, really, of the Reagan philosophy and just on occasion touching on specific elements of policy of the moment.

LEHRER: But there are no philosophical turns in this, are there? I mean, most basically a restatement of where he's already been and wants to just continue going that direction?

Mr. ORNSTEIN: Oh, I think very clearly that. What you see, if you look at the past, the evolution of Ronald Reagan in six years in the White House, you see differences in the State of the Union messages, in part based on where he's coming from. As he's entering an election campaign in 1984, for example, it's a clear election statement. In 1982 it was devoted to the theme of the new federalism. Now, however, you also see some of the continuity that we have across those speeches. There is a philosophy there. It's a core philosophy: America, the great nation; it can do greater things than anybody else as long as we don't let government shackle her. America reaching out to the frontiers, the notion of space, which clearly will have a special and poignant place tonight, has been there in past Reagan messages, that we are reaching out towards the frontiers. I'm sure that will be there tonight. And also, of course, at least touching on the deficit. Although he's never spent much time on this issue, it's an obligatory thing early on that he gets through and gets over. I'm sure we'll see that again.

LEHRER: All of the pre-speech briefings last week, when it was set to go, last Tuesday, and some advance things that came out today, also emphasized this concern for the American family. What's that all about, Norm?

Mr. ORNSTEIN: Well, that's also something that we've seen in the past at least touched upon by the President. I'm sure that the President's talked about family, home, hearth and some of the traditional core roots of American society, the tremendous impact that the Bill Moyers CBS special on the black family has had, has had an impact here, and I think it's leading towards probably some broad Reagan proposals to do something about the question of welfare and welfare reform. That and privatization I think are going to be elements that are new in terms of policies for the future but that will be dealt with in broad brush strokes.

LEHRER: Yeah, the word was that he's going to call for a major study of the welfare system and is it contributing to the dissolution of the American family and that sort of thing. On one other area, as I understand it also in the pre-speech briefings is to study, to see if there's a need for a big international monetary conference. What's going on there, do you think?

Mr. ORNSTEIN: Oh, I think we're leading towards Reagan at least looking at the global monetary picture. We saw just a few weeks ago Jack Kemp and Bill Bradley, a Republican and a Democrat both very prominent in national politics, hold their own conference on the international monetary question. We've got serious questions about the dollar, we've got serious questions in the international scene with Mexico and oil prices, about debt. I think the President is trying to set the stage as he anticipates crises ahead to show people that he's in charge. That's part of, by the way -- while the White House has said this won't be a laundry list, and it clearly won't -- it's short and it's going to be much more pithy -- that doesn't mean he isn't going to touch on different spots, trouble spots around the world, broad issues and specific areas of policy here. I'm sure, of course, not only the deficit, tax reform. We've talked about welfare and welfare policy. Space, he's going to talk about. I'm sure that he is going to get to the question of budgetary reform as well, and with international monetary things; and he's got to make some reference, I'm sure, to the contras and perhaps the Philippines. He will cover a lot of bases. But I think that we're talking about very brief way stations. Six years into his presidency the chance of some bold new initiative coming forward, if he's been a successful president and has acquitted himself to a point where he could get re-elected, the chance of some bold new initiative is slim to none, and probably wouldn't make much sense anyhow. That's why we're not taking about, say, welfare reform restructured right now.

LEHRER: Finally, the President of course is at the height of his popularity. The Democrats have to respond, whether they want to or not. What kind of problem are they confronted with in this brief response that they're going to make tonight?

Mr. ORNSTEIN: Well, the Democrats -- it's interesting. The Republicans in Congress are not all that happy with their president right now, despite his popularity, because they have a different set of issues and concerns. The Democrats are very wary of Ronald Reagan. He's better off in popularity than any other president since we've been measuring these things at this stage in the presidency. But I think they believe that there's a detachment between Reagan's popularity and his issue popularity. And I suspect they're going to come out fairly tough on the issues, emphasizing the deficit, because that's where they see their opening right now.

LEHRER: I asked one of the participants at a little briefing today, well, are you really going to come out strong against the President, and he, "Oh, no! Oh, no! Oh, no." Just his policies.

Mr. ORNSTEIN: Just his policies. That's right. He's a nice fellow, but.

LEHRER: That's right. That's right. Well, thank you, Norm. Robin?

MacNEIL: While national attention is focused on the President's State of the Union message, this is the season when governors in the states do the same. Tonight we have a roundup on the state of the states. Here is Judy Woodruff. State of the States

JUDY WOODRUFF: Just as the President does on a nationwide scale, so do the governors use these addresses to assess what shape their states are in, financially and otherwise. Looking at what a half-dozen or so governors had to say since the first of the year, we found surprisingly little mention of the coming reduction in federal funds. It's said there is a fairly widespread theme of self-sufficiency.

[voice-over] From the statehouse in Albany, New York, the word is spreading across the nation. State governments are in good shape, better than they've been in some time.

Gov. MARIO CUOMO, (D) New York: The last three years have been a time of achievement. They cap a decade of recovery and move us now, I think, to the verge of a grand resurgence. Little more than a decade ago, with the greatest city in the world virtually bankrupt, and the future of the entire state in jeopardy, many of us sat in this chut many of us then led by Governor Carey saw it differently in the spirit that made this state great. We looked at our troubles and saw them as challenges, and we set about to restore our greatness.

Gov. GEORGE DEUKMEJIAN, (R) California: When we met here three years ago, California couldn't pay its bills. The budget was out of balance, our people were out of work, businesses were leaving the state, and our schools were running out of money. But using common sense and with consistency of principle, we have traveled from hardship to leadership. California has gone from IOU to A-OK.

WOODRUFF [voice-over]: The good news predictably is from the nation's biggest and richest states. In the nation's heartland, in states like Kansas, plagued by the farm crisis and other economic troubles, the message is modified. These states will be struggling to make their budgets stretch.

Gov. JOHN CARLIN, (D) Kansas: Today we're facing financial difficulties, not only in government, but individual Kansans are as well. Many of our farmers and businessmen and -women are struggling. Thus, it's time to work together and view our situation as an opportunity to improve our financial situation and move our state forward once again.

WOODRUFF [voice-over]: Kansas Governor John Carlin even took the politically risky step of proposing a sales tax increase as as a way to help his state make the progress he wants.

Gov. CARLIN: Some would argue that this is not the time to raise taxes, and it is certainly true we have many citizens such as farmers who are facing severe financial hardships today. But the fact remains in these competitive economic times, agriculture and some of our basic industries need our help and support. It is not a time to turn our backs on them in the guise of being fiscally responsible, for fiscal responsibility also means that we invest to keep our economic base healthy.

WOODRUFF [voice-over]: The deep South has also had its share of economic troubles. The prospect of losing still more federal assistance was lamented by Alabama Governor George Wallace, long an advocate of fiscal conservativism.

Gov. GEORGE WALLACE, (D) Alabama: Gramm-Rudman legislation recently enacted by Congress calls for a balanced budget. The intent of this legislation was maybe noble, but it's going to -- it is going to balance the budget on the backs of the poor people and the farmers of America.

WOODRUFF [voice-over]: Wallace was among only a few governors who compained openly about Gramm-Rudman's threat to the federal pipeline that so many states depended on in the past. Most governors we sampled downplayed the federal relationship and focused instead on themes of economic independence for the future.

Gov. DEUKMEJIAN: With solid recovery, now we have a chance to build an open-door prosperity to meet the challenges of the international marketplace, and to make sure that all regions and residents of our state are included in that progress. More trade, free and fair trade, means more jobs for our people.

Gov. MICHAEL DUKAKIS, (D) Massachusetts: How do we nurture and sustain innovation so that Massachusetts can continue to lead the nation as an economic showcase and a beacon of opportunity? How can we help to get more good ideas out of the laboratory and the inventor's garage and into the marketplace? How can we do a better job of promoting and carrying Massachusetts' products and services to the markets of the world?

WOODRUFF [voice-over]: And in Michigan, which teetered on the brink of bankruptcy three years ago, the economy is now strong enough that that governor could also talk of self-sufficiency in his televised state-of-the-state address.

Gov. JAMES BLANCHARD, (R) Michigan: Our goal, I believe, working together should be to make Michigan number one. Michigan, a world-class state. Michigan, the state on the cutting edge of technology. Michigan, a state with a diversified economy and secure jobs.

WOODRUFF [voice-over]: Along with economic independence, the governors we sampled stressed education as the key to strength in the future, as the way to cut welfare and other social costs.

Gov. JOE FRANK HARRIS, (D) Georgia: Most importantly, with the passage of the quality basic education act, you and I have made education the top priority for Georgia. We have said that we can best prepare our children for the future by insuring that our children receive a quality education -- and now.

Gov. BOOTH GARDNER, (D) Washington: As I look over the past year, my greatest frustration as governor has been the state's inability to adequately finance and provide resources necessary to make substantial improvements in education. Education, both K-12 and higher education, has more responsibility for the future well-being of our people and communities than any other part of state government.

WOODRUFF [voice-over]: With all the talk of a bright future for the states, even in one of the healthiest there was the reminder of the persistent problems of those least able to participate in that future.

Gov. CUOMO: For all the affluence and all the power evident in the Empire State, there persists an intolerable amount of deprivation, even despair. And it's no consolation that many parts of the nation share this pain. Many of us are doing better than ever, but the stark truth is we have more poor and more homeless than at any time since the Great Depression. And if we, you and I, look the other way, as a generation of children born and raised in poverty surrounded by drugs and despair is denied adequate education and employment, none of us will escape the trouble and the pain that will come. Both love and self-interest demand that we do more.

WOODRUFF: Wherever the governors came out, on the side of deploring cuts from Washington or cheering on their own self-sufficiency, they will all be watching closely the numbers that affect them in the Reagan administration budget that is being released tomorrow. Robin?

MacNEIL: For a little more on the state of mind in the states we have Neil Pierce of the National Journal, co-author of The Book of America. Neil, why isn't there more sort of public doom and gloom about another wave of impending federal cuts?

NEIL PIERCE: I think the governors know the bad news that may be coming, but politically it's not advantageous to talk about it right now. There are 36 governorships up for election this year. The political priority says you don't talk doom and gloom when you can talk achievements in the future within your own state so people will feel hopeful about what you're doing. Their budgets are in fairly good shape so far, hoping, of course, that they don't get the Gramm-Rudman budget axe across the neck, they're not going to anticipate it and say it's going to happen to them until they do. Then they'll be able to say it's all Reagan's fault, even Republicans, I would think, and be able to deal with it at that moment.

MacNEIL: What position are the states in now, if there is, as seems in prospect, another large cut in federal direct assistance or in programs to the states?

Mr. PIERCE: Most of them are in pretty good fiscal shape. You find through the Farm Belt -- we heard Governor Carlin on the pain of the plains, if you will, and hard times there. We find some real reversals in the energy dependent states, Texas, Oklahoma, Louisiana, in very bad fiscal shape in terms of their own budgets as oil prices drop. But on the whole the states are in fairly good shape, and quite a number have instituted rainy-day funds over the last several years which will give them some cushion if a real cutback in federal funds hits them soon.

MacNEIL: So how will they cope if and when these cuts come?

Mr. PIERCE: Well, that's the good question we don't know the answer to. Some clearly will say we just have to cut back and make the cuts that are in place. I have a hunch that they don't want to say so, but what will happen in not too long a period of time is that they will begin to think about raising state taxes to cover for some of the programs and activities that are lost when federal aid goes down. The states have the constitutional power to raise taxes. What we're probably engaged in in America is a transfer of some chunk of federal responsibility back to the states, and they will, although they won't advertise it in grand terms that we're going to be heavy spenders, they'll start to move, I believe, into more taxation to cover what they see as the loss of federal assistance so they can do what they want to do and what the feds used to do, if you will, in areas like housing, for instance. They can enact taxes on real estate transfers, if they need more general revenue. The greatest area of economic expansion in the country is in services, and that's one opportunity, they would have more services on lawyers, accountants, whatever you like.

MacNEIL: You've studied the states. You've spent a lot of your journalistic career looking at the states and staying in touch with the thinking there. How far does the sort of conservative theory that is popular in Washington at the moment about reducing the impact and role of government -- how far is that trickling down to state government? How far is it believed and accepted nowadays?

Mr. PIERCE: It's having difficulty getting out beyond the Beltway around Washington, I would say. There has been a very activist period in state governments in the 1980s. They seem to have hit their stride. They know what they're doing. You heard some of that in the group of clips we were just listening to from these states of the state. In education we have one of the greatest waves of state-based education reform in the history of the United States just in the last three or four years. In economic development they have undertaken an immense number of activities, ranging all the way from business incubators and special university-based research things around to foreign trade promotion. They are working a great deal on the organization of their own bureaucracies. There is almost a cockiness, but I wouldn't go quite that far. There is an exuberance. They watched through the recession. They made some very tough decisions in terms of cutting services, raising taxes. They were able to survive that hard time, even while Washington was on its fiscal binge, if you will, still. There's this almost exuberant feeling out there, "Yes, we can do it and we can cope, even if the national government is doing a poor job now."

MacNEIL: And what about how much of a sympathetic echo will there be of Governor Cuomo's feelings about the people who are not sharing the prosperity?

Mr. PIERCE: Well, that's going to depend politically on how people react. What I have sensed in the last year around the country is a shift. Instead of talking about welfare programs as something we owe compassionately, there's a lot of talk about how we're going to have more workfare, the Massachusetts ET program, which may be the most advanced welfare program, workfare program, out there. That we will find a way to intervene at an early enough point where we have serious social problems and therefore find some solutions that are cost-effective. In other words, you apply the economic yardstick to social problems. It's been suggested quite broadly now in the area of teenage pregnancy -- early intervention or daycare, so that welfare mothers, for example, can work. If that kind of argumentation is developed, and I think there was a little bit of that in the Cuomo pitch tonight, you might see even conservatives brought around to a position that where you can show an advantage in making an early investment, yes, states ought to be making that investment.

MacNEIL: Neil Pierce, thank you. Jim?

LEHRER: Yeah, let's bring Norman Ornstein into this for a couple of minutes. Norm, first of all, do you agree with Neil when he says that what we're seeing here is a transfer of power literally from the federal government to the state governments?

Mr. ORNSTEIN: We're clearly seeing a transfer of responsibility that's taken place, and going back to 1982 when President Reagan talked about the new federalism, they thought they were getting a deal of more responsibility and more freedom in return for a little less money. They've gotten a lot less money and probably not that much more additional responsibility. And I would think that these governors -- and in the states they have to be awfully nervous, not only about the Gramm-Rudman budget cuts but also that as the federal money dries up, Congress instead of saying, all right, we'll give you more freedom to spend that money, is going to turn around and take the opposite attitude: we have less to give and we want to pinpoint it more directly. And they may put more shackles on.

LEHRER: If that happens, what's --

Mr. PIERCE: Well, in that case you might as well say forget it. I mean, we're on a trail towards zero federal funding of a huge number of these state and local programs. At that point the effectiveness of federal mandates, you know, you do our way or we'll pull away your money, fella, that falls away.

LEHRER: If you don't have any money to pull away, how can Congress keep the thumb on if they don't give them any money?

Mr. ORNSTEIN: Well, of course, if they go down to zero funding, that's definitely the case, then I think the states which are riding high now in part because the economy is going well, and they are very sensitive in their budgets, as Neil knows, to the economy resting on sales taxes so much as they do. If the money goes to zero, that's a different ballgame, but if the money goes down to much, much less but still something that they desperately need in return for picking up the vacuum that the federal government has left, they're still going to want that money and they're going to have to pay a much heavier price for it. I'm sure they're very nervous about that. I'm sure they're also nervous -- the federal government's been talking on its own about taxes about the possibility of a value-added tax, almost a grand federal sales tax. That really crimps the style of the states where their revenue base is strongest.

LEHRER: What do they think of that, Neil?

Mr. PIERCE: Not much. They're hoping it doesn't happen, naturally.

LEHRER: Because that's their own area -- well, there's also real estate taxes. Those are their two main areas that have been left to them, right?

Mr. PIERCE: Up to this point, sure, but there's nervousness that that could take place. But the feds haven't moved close enough to it to cause major concern down in the state capitals as yet.

Mr. ORNSTEIN: You know, Jim, when President Reagan talks about welfare reform, of course the favorite idea of the governors has been to really bifurcate responsibilities. Let the federal government take up welfare --

LEHRER: Do what? That's a big word, Norm.

Mr. ORNSTEIN: Well, I looked it up in the dictionary today.

LEHRER: Okay.

Mr. ORNSTEIN: That's to take responsibilities and really divide them very carefully, where now they're really mixed and matched and melded between the states and the federal government. What the states want is for the federal government to take on welfare, period. Not give them a major role in it, and let them take on a whole series of other areas, like environmental cleanup and highways and the like, which happen to be a lot more attractive to deal with, that they think they can handle much better. And they're going to make, I think, another push for this and hope that President Reagan, as he calls for welfare reform, will buy this idea. It's never been bought before.

Mr. PIERCE: I think there's broad support for it. There was a commission on federalism and the national purpose headed by Chuck Robb when he was governor of Virginia, and Dan Evans, now senator, former governor of Washington, that came in with a report last month, or in December. And it said very clearly welfare and Medicaid to the national level, assure adequate levels of welfare, which we don't now have, in return for almost all community development and other expenditures down to the state level.

LEHRER: They just told me very clearly that we have to go. Norman Ornstein, Neil Pierce, thank you both very much. Haiti: Dynasty in Danger

MacNEIL: Finally tonight we have a documentary look at Haiti. Last week resentment over chronic poverty and abuse of human rights boiled over in riots against the authoritarian regime of Jean-Claude Duvalier. At least 50 people have been killed in the demonstrations. Today the government urged people to return to work, but many stores and all the schools were shut. One of the opposition leaders, former cabinet minister Hubert de Ronseray, was quoted by Reuters news agency as saying, "It's no longer a question of if Duvalier will go, but when." Yesterday Duvalier, who carries his father's title, president-for-life, made one of his rare public excursions. Driving around the capital of Port-au-Prince with his wife Michelle, he told foreign newsmen, "There are no demonstrations. There are people being manipulated by other people with bad intentions." But the situation for Haiti and Duvalier clearly remained tense, as we learn in this report from CBC correspondent Terence McKenna.

TERENCE McKENNA, CBC [voice-over]: The island of Haiti is transformed by darkness. There is an other-worldly quality, and usually an imposing silence. In the city the people eat in the streets, slwep in the streets; lately, many have to take cover. Distant gunshots, ambulances for the wounded. The police say that rebels and bandits are doing the firing, but the poor say different.

[interviewing] Who is firing the shots, the gunfire that we hear?

HAITIAN: Tonton Macoute.

McKENNA [voice-over]: The Tonton Macoute is the hated and feared secret police force, targeted against the government's list of enemies. Here for the first time Haiti's minister of foreign affairs, Georges Salomon, admits that it is the government forces doing most of the shooting.

GEORGES SALOMON, Haitian Foreign Minister: We believe they were trying to deter people from looting or doing acts like that.

McKENNA: So the shooting is coming from the military?

Min. SALOMON: Is probable, probable.

HAITIAN: I see one die the whole time, and nobody take him. You just see it in the street and you're scared. You just pass by and nothing to say. If you say something, you can get killed for yourself.

McKENNA [voice-over]: In Port-au-Prince the morning after. The tension here is boiling over because of the discontent of the poor in the Western Hemisphere's poorest nation. Seventy-five percent of the working population makes less than $200 a year. Disease is rampant. One in 10 children die before the age of one. Ninety percent of the population is illiterate, and a tiny elite owns almost the entire economy.

[on camera] Haiti had a proud birth as the world's first independent black nation, but its history has been marked by an incredible string of murderous dictators. Even in that infamous lineup one name stands out, a name that has dominated this country for most of 30 years, the name Duvalier.

[voice-over] Election day, 1957. After a bitterly fought campaign, a diminutive country doctor emerges from the pack to claim the presidency. Francois Duvalier, called Papa Doc. To insure that he is not overthrown by his army, Papa Doc creates his own secret police and militia called the Tonton Macoutes. The name is derived from a Haitian legend of a mythical boogeyman. This murderous gang of thugs eliminates Duvalier's enemies and imposes his will on the country. The president is often holed up in his white palace, fending off attempted coup d'etats and assassinations. But he outwitted all his opponents until the end. He died in 1971, but not until after he successfully transferred the title president-for-life to his homely 19-year-old son, Jean-Claude. In the '70s Jean-Claude ruled with the help of his mother and somewhat curtailed the practice of murdering political enemies, though he was always careful to cultivate the Tonton Macoute. Boat people began to flee Haiti's disastrous economy and severe repression, and so Jean-Claude made several attempts at liberalization under the tutelage of a new political counselor, his bride Michelle, whom he married in 1980. In the 1980s Jean-Claude Duvalier has been constantly cited for torture and other human rights abuses by Amnesty International. Recent food riots and demonstrations have endangered the stability of his regime, and so last Friday martial law was imposed.

[interviewing] Why has your government declared a state of siege in this country?

Min. SALOMON: We have to come to the decision to restore law and order in many cities where we have been -- we have assisted to something of a dissidence and trouble.

McKENNA: But is it a crime in your country merely to dissent against the government?

Min. SALOMON: No, it is not a crime to dissent against any one either inthe government or anwyere, but the law affect the person which are declared guilty of plotting against the security of -- plotting or acting against the security of the state.

McKENNA [voice-over]: On Sunday morning a curfew in some provinces stopped many Haitians from attending church. In Port-au-Prince, where the bishop is sympathetic to the regime, the church was open. But opposition from most of the clergy is a new and serious problem for the government. The faithful are unsure of the path ahead of them. For the young, a Duvalier regime is all they can remember. Some prefer the misery they know to an uncertain future they fear. Under the influence of the church the flock is beginning to edge away from Duvalier. The regime tries to hold back the tide. They have shut down the Catholic broadcasts on Radio Soleil and other radio stations.

[interviewing] Why have you taken these radio stations off the air?

Min. SALOMON: Because the military authority has estimated that those stations with their wild broadcasting were inciting the people.

McKENNA [voice-over]: Large numbers of Haitians are driven by wild stories, voodoo rituals and myths. The government has always been able to harness and exploit that energy, but now Duvalier may be losing control. Many are tasting a new freedom and don't want to turn back. The armed forces are trying to suppress the excitement this week. They still generate real fear. But the effect may not last as long as it used to. Duvalier forces are not in control of much of the country. Even in Port-au-Prince the president is almost confined to his palace. The palace guard is nervous. On alert for an attack or coup attempt, they pounce even on our TV crew, but we are soon released. The blue uniformed Tonton Makoute don't like being photographed, but they too are a vigilant presence here. Their justice is rough, their loyalty to Duvalier has a fierce reputation among the people.

HAITIAN: You can't even say nothing, nothing bad about the president, because you know if you say anything so bad you can get killed.

McKENNA: Do you think many people are against President Duvalier?

2nd HAITIAN: Oh, yes. The people is very poor. No work, no medicine, no eat. Bad, bad, bad. All bad, bad, bad, bad, bad.

McKENNA [voice-over]: It is often said that the American ambassador really makes the decisions on the island. Last week's rumor that Jean-Claude Duvalier was leaving originated at this embassy, and that's not the only indication of what the Americans are thinking.

[on camera] The U.S. government has been giving $52 million a year in aid to Haiti. That's the lion's share of the aid which arrives here in Port-au-Prince. That aid is what keeps Jean-Claude Duvalier afloat. For years the American subsidy has continued in spite of the murder and torture and other human rights abuses. The Reagan administration has always claimed that things were improving here; they wanted to stand by a good American ally. Not any more. The U.S. government has finally decided to cut that aid.

Min. SALOMON: If they cut their aid that will mean more suffering, more misery for the Haitian people. The American aid go directly to the people. They have full control of all the funds and of all the program.

McKENNA [voice-over]: The people of Haiti are wary of provoking their government. At night many pretend to ignore the gunshots and fighting in the surrounding hills. They go about their gambling and other diversions. Out of fear they may say little, but they hear and see everything. Many are waiting for the odds to improve, waiting to see what their neighbors will do. There is a sense that their fate will soon change, a feeling that a storm is still approaching.

MacNEIL: U.S. officials said today that 15 Americans have been evacuated from the northern city of Cap-Haitien, a main center of the protests against the Duvalier government.

LEHRER: Again, the major stories of this Tuesday. President Reagan is to sound the alarm for help for the American family in his State of the Union message tonight, while the Democrats respond with an expression of restraint on defense spending, among other things. West German Chancellor Helmut Kohl officially confirmed the Soviets have agreed to swap Soviet dissident leader Anatoly Shcharansky for some of their captured spies. A West German newspaper reported the Soviets also want $2 million for making that deal. And the price of oil continued its slide down below $16 a barrel for some types of oil on some markets. Good night, Robin.

MacNEIL: Good night, Jim. That's our NewsHour tonight. We will be back tomorrow night. I'm Robert MacNeil. Good night.