The MacNeil/Lehrer NewsHour

INTRO

JIM LEHRER: Good evening. In the headlines today the OPEC oil cartel agreed to cut back production. President Reagan attacked Walter Mondale on economic policy, and Walter Mondale attacked President Reagan on human rights policy on this, a week plus one until Election Day. Robin?

ROBERT MacNEIL: And for special focus tonight, two election stories. We ask newspaper editors why one endorsed President Reagan and the other Walter Mondale. From Illinois, Elizabeth Brackett reports on one of the closest Senate races, Charles Percy versus Paul Simon. Charlayne Hunter-Gault talks to one of the insiders about the ethical medical problems of putting a baboon's heart in a baby girl. And we have a background report on the anti-Arab terrorists active in Israel.

LEHRER: First the news of the day, led again by Messrs. Reagan and Mondale bashing away at each other. Mr. Reagan had his main bad words for Mr. Mondale at a rally in Media, Pennsylvania, where he talked of the Democrats picking the American wallet again and other metaphors.

Pres. RONALD REAGAN: You know, if my opponent's campaign were a television show, it would be "Let's Make a Deal." You get to trade your prosperity for the surprise he has behind the curtain. Now, if his campaign was a Broadway show, it would be called "Promises, Promises." And if his administration were a novel, a book, you'd have to read it from the back end to the front in order to get a happy ending. He sees -- he sees an America in which every day is Tax Day, April 15th, and we see an America in which every day is Independence Day, the 4th of July.

LEHRER: Mr. Mondale, the underdog in the race, with just eight days to go, was in the West today. In Portland, Oregon, he did his Reagan bashing on human rights issues.

Vice Pres. WALTER MONDALE, Democratic Presidential candidate: Just think a moment about this record. Shortly after they were elected, they sent the Vice President to the Philippines who praise Mr. Marcos' love of democracy. They sent their U.N. ambassador to Chile and clinked glasses with the thugs that run that country. They met with the Argentine junta and the U.N. ambassador permitted herself to be honored at a dinner on the night they invaded the Falklands. They were silent in the face of death squads in El Salvador. The President opposed all the human rights conditions that Scoop Jackson and others wanted to impose upon aid in that direction. They have sponsored the illegal war in Nicaragua, and published manuals for the murder in that area. They've cosied up to the racists in South Africa, they've praised a constitution that condemns the blacks in that state to total denial of power: and this week the United States was the only nation in the United Nations to abstain in a resolution condemning the South African government for oppressing the blacks in that community.

LEHRER: And Geraldine Ferraro conceded today George Bush was probably more qualified than she to be president, but that's because he's been vice president now for four years. Mr. Bush, campaigning in the South, had no immediate comment on that. We'll be looking further at the presidential race in a fewminutes with newspaper editors discussing their business of endorsing Reagan-Bush or Mondale-Ferraro. Robin?

MacNEIL: In economic news today the OPEC nations agreed at an emergency meeting in Geneva to cut their production to shore up sagging oil prices, but the cut would be temporary and the decision was opposed by at least one big OPEC producer. Here's a report by James Long of the BBC.

JAMES LONG, BBC [voice-over]: The OPEC ministers have agreed to reduce their production ceiling from 17 1/2 million barrels of oil a day to 16 million. They're hoping that will be enough to make Britain's North Sea price cut look ill-advised, but there are still problems. Tonight they'll start talking about how the production cut is to be shared between them. The Nigerians have said they won't cut at all, and it could be difficult. OPEC is getting help from two non-members. The Mexican and Egyptian oil ministers are here as observers, apparently ready to keep their production down, too.But there may still be difficulties ahead. There's another and far more complex problem, which some are insisting must be resolved here. OPEC's price structure for different types of oil is out of date. Its heavy, low-quality crude oils are too cheap compared to its light crudes equivalent to North Sea oil. Modern refining techniques have made the heavy crudes much more useful and they should therefore be more valuable. Dr. Otaiba, the United Oil Emirates' oil minister, is one who is insisting this is sorted out.

MacNEIL: At home the labor news looked better in the automobile industry. Canadian members of the United Auto Workers Union began voting on a new contract with General Motors with many workers predicting approval. That would end the strike that has idled 76,000 workers in the U.S. and Canada. The UAW also announced that its workers easily ratified a new contract with the Ford Motor Company. There was another sign of slowdown in the economy today. The government's survey of worker productivity showed no change from the second to the third quarter, the first time there's been no improvement since the recovery began. Treasury Secretary Donald Regan said today that the Federal Reserve Board could provide much more credit to sustain flagging economic growth. He spoke to savings institutions in Washington about the nation's money supply.

DONALD REGAN, Treasury Secretary: In the last 13 weeks it has grown by practically less than 1%. In other words, no growth. By anyone's yardstick that is not loose money. It leaves a lot of room for the Fed to ease. If the Fed does ease money over the next several months, as conditions seem to warrant and many are forecasting, then I believe interest rates will continue to decline.

MacNEIL: There was good and bad news for the Reagan administration in another government report out today. The Commerce Department said that Americans' average personal income rose 2.1% from April through June this year, but residents in six farm states actually lost ground. North Dakota was the hardest hit; the others were Montana, Nebraska, Iowa, South Dakota and Mississippi. The farm income setbacks were blamed on the ending of the government's PIK, or payment-in-kind crop subsidy program. Jim?

LEHRER: Baby Fae is still alive tonight. She is the 17-day-old child in whom a baboon's heart was transplanted over the weekend in California. The baby suffers from a defective heart condition that is almost always fatal. Today it was confirmed a human heart might have been available for the infant the same day the animal transplant was performed, but doctors at the hospital in Loma Linda, California, said it would have had no effect on the decision to go ahead with their operation. We'll have more on the Baby Fae case later on in the program.

One other medical note, the maker of the IUD birth control device, Dalkon Shield, said today it would pay for its removal from any woman still using one. The now-banned device was taken off the market in 1974, and has been the subject of 11,000 lawsuits, all growing out of the charge they caused ill effects. Robin?

MacNEIL: A United Nations report said today that the drought situation in Africa has created the worst human disaster in recent African history.The office of the U.N. Disaster Relief Coordinator in Geneva said that more than 35 million people living in 18 African countries are desperately hungry. In Ethiopia an estimated six to seven million people are in danger of starvation.The U.N. officials said they had no estimate of the actual numbers of deaths so far from the prolonged drought and the resulting famine. The report said that altogether 27 African countries urgently need food aid.

In northern Poland police searched the Vistula River for the body of a missing priest who is the center of a new storm between the communist government and the outlawed Solidarity union. The Interior Ministry says that the pro-Solidarity priest was abducted and possibly killed by three of its officers. Lech Walesa, leader of Solidarity, has appealed for calm among his followers as demonstrations of protest began.

For our final story in the news summary tonight, in Israel police were hunting suspected Jewish terrorists for a rocket attack on an Arab bus yesterday in Jerusalem which killed one Arab and wounded 10 others. A note left near the discarded rocket launcher said a group called the Avengers were acting in retaliation for the murder of a Jewish couple last week for which a Palestinian has been charged. Angry Palestinian students today stoned an army jeep. Soldiers fired warning shots to disperse them. Israeli authorities fear that the bus attack could herald a series of attacks by the Jewish underground terrorist group, and later in this program we'll have a documentary report on Israel's internal terrorist movement. Newspapers: Taking Sides

LEHRER: We move now to our first major focus segment of the evening. The subject: newspaper endorsements -- Reagan or Mondale or nobody and, does it really matter? Most papers have now done their endorsing; many of them did so yesterday, which was a kind of informal endorsement day out there in newspaper land. The Mondale campaign said today their count showed about 40 endorsements thus far for their man. They include The Milwaukee Journal, The St. Petersburg Times, and The Washington Post. The Detroit Free Press wrote that "Mr. Mondale will more accurately reflect the pluralistic traditions that have been important to this country." In endorsing Mondale The Philadelphia Enquirer condemned the Reagan administration as one "of the advantaged, by the advantaged, for the advantaged." And The New York Times said Mondale deserves to win since he is "the man most likely to reduce the deficit, to spread burdens fairly and to control nuclear weapons." Robin?

MacNEIL: President Reagan also got his share of praise and kudos from a good many newspapers as well. According to his campaign, roughly 85 papers have so far endorsed the President. Joining those ranks have been The Chicago Tribune, the Indianapolis Star and the Portland Oregonian. Many of those Reagan endorsements have focused on leadership ability. The Miami Herald wrote that "Mr. Reagan has proved to be an extraordinary leader." The San Francisco Examiner praised Mr. Reagan's "magnetic leadership." The Cleveland Plain Dealer declared "He has made many Americans feel good about themselves and their country." Yesterday the mass-circulation New York Daily News joined the list of papers endorsing Mr. Reagan. Its editorial was written by associate editor Jack Smee.

Mr. Smee, why did your paper endorse Mr. Reagan? Was it a pro-Reagan decision or an anti-Mondale decision?

JACK SMEE: To answer the question directly I'd say it was a pro-Reagan decision because the editorial, as any reader would have noted, deal very little with Mondale and altogether, almost entirely, with what Reagan had done for the country over the last four years. To set the context a little bit further, in 1980 we endorsed Reagan over Jimmy Carter for the presidency. This time around we had to have good reason to, in effect, dis-endorse him by suggesting that Walter Mondale was --

MacNEIL: You were already on his side. You had to --

Mr. SMEE: Therefore he had to do something or he had to have done something over his past four years to justify us going to Mondale.

MacNEIL: And he hadn't?

Mr. SMEE: He had not, in our judgment.

MacNEIL: You editorial said that "he offers, at the age of 73, a newer and younger vision of where the nation is going than does his principal opponent." What's your understanding of that vision?

Mr. SMEE: My understanding of that vision is that he is returning us to what you might call traditional values, not in the sense of school prayer and so forth, but in the sense that we go back to working for a living, earning our way, doing the things that have made this country great, and living, in a sense, within our means, far more than we have in the past, and not relying upon government to do things for us. I think there's been an over reliance in the Democratic years on government to do things for us that we should have been doing for ourselves.

MacNEIL: Since the Democrats make a very big issue of the deficits, does "living within our means" encompass the deficit situation?

Mr. SMEE: We're not happy with the deficit. We think that it should be reduced. We've said so all along. We think, however, that it can be reduced and in this next administration we think that he probably will reduce it. We think ultimately he's pragmatic enough to recognize this reality.

MacNEIL: Since Mr. Reagan has not given very many specifics in terms of policies about what will happen if he's re-elected, what is your understanding of what a second Reagan term would bring?

Mr. SMEE: I think it will bring, first of all, attention to the economic situation with respect to the deficit. I think he definitely will go after that in the sense of reducing spending and/or increasing some tax or reducing some form of taxation that will increase our revenues. I don't believe that he will stand pat. I don't believe that the Republican Party and the rest of the country will allow him to stand pat on that. So I think he will go after that. I think he will also go after, on the international scene, an accommodation of some sort, not a giveaway to the Russians and the Soviet Union, and I think he will press for a resolution of our problems in Central America.

MacNEIL: Since the Democratic contender traditionally carries a lost of metropolitan New York, which is your circulation area, are you in tune with your readers in the decision to re-endorse Mr. Reagan this time?

Mr. SMEE: If you go by the polls, probably not. I think it's pretty obvious and has been historically true that New York City, particularly, has voted Democratic for almost ages on end, and the likelihood is this time around that in New York City, which is our primary market, Mondale will probably prevail. However, in the past we have endorsed Republican candidates rather regularly, despite the fact that our readership may have been voting overwhelmingly Democratic. So it is not exactly out of keeping for us to endorse a Republican.

MacNEIL: Mr. Smee, thank you. Jim?

LEHRER: The other side of the argument now from James Powell, editor of the editorial page of The Arkansas Gazette in Little Rock. His paper backed Mondale in its endorsement editorial Sunday. Mr. Powell is with us tonight from the studios of public station KCET in Los Angeles. Why Mondale, Mr. Powell?

JAMES POWELL: Well, we endorsed Mondale to begin with unequivocally and with enthusiasm on his record as the most qualified man in the Democratic Party, the most qualified man that the party had to offer, and also on the record of his issues. First of all, the rescue of the federal budget from the wild excess of the Reagan administration, and the resumption of meaningful nuclear dialogue with the Soviet Union.

LEHRER: There was a tone of anti-Reagan also in your editorial. What is your view? Is it more pro-Mondale than anti-Reagan, or give me a balance on that?

Mr. POWELL: Well, I would say that it is about equal. I think that Reagan is the most uninformed president the country has had since Warren G. Harding.

LEHRER: In what way?

Mr. POWELL: On the record of 100 lapses which are shown in his recurrent performance on television, particularly most recently in the first debate. He simply is uninformed much of the time on the record of his press conferences and at any time that he's not -- that he doesn't have a script on hand.

LEHRER: What about his policy on talking with the Russians on arms control? You came down on him pretty hard on him on that. What is the nature of your problem with him on that issue?

Mr. POWELL: Well, Ronald Reagan is the first president in more than a half century who has had no dialogue, no summit dialogue, with the Soviet Union. This is an unthinkable situation. Detente is dying and there's no negotiation with the Soviet Union that's meaningful. The SALT II treaty is moribund because Mr. Reagan has refused to endorse it or to push it, even though there was a succession of presidents, both Democratic and Republican, who helped negotiate the SALT II treaty and now it lies unattended.

LEHRER: You say that Walter Mondale is the most qualified of the Democrats, the most qualified man the Democrats could have run. In what way? Briefly, what is there about him that is so outstanding to you and The Arkansas Gazette?

Mr. POWELL: Well, to begin with he was a distinguished United States senator whose mentor was the late, great Hubert Humphrey. That was a great preparation in itself. He was vice president of the United States for four years with an almost unprecedented access to the inner councils of the White House and to contact with the President himself. His experience is simply. I think, unparalleled in the Democratic Party.

LEHRER: I see. Finally, do you feel -- the same question Robin asked the man from New York. Do you feel your endorsement is in tune with the voters of Arkansas?

Mr. POWELL: Well, we have never tried to set our endorsements in tune with the voters, although we hope they are. We hope that we are able to be persuasive with them. It is not our criterion, however. Sometimes we are ahead and sometimes we are behind after Election Day.

LEHRER: What do the polls show right now in Arkansas?

Mr. POWELL: I think the polls show Reagan ahead.

LEHRER: I see. Robin?

MacNEIL: Let's hear you two gentlemen defend your decisions a little bit for the benefit of our viewers. Mr. Smee, you heard Mr. Powell of The Arkansas Gazette call Mr. Reagan the most uninformed president since Harding on the record of his press conferences and the debates.

Mr. SMEE: I think maybe too much is made of the way he performs in a press conference. I think his performance in office and his performance with the people he puts in charge of the various departments of government is what ultimately counts. A president doesn't have to do everything himself, as we discovered with Jimmy Carter, and should not.

MacNEIL: How do you answer that, Mr. Powell?

Mr. POWELL: Well, I would say that the last responsibility rests with the President. Of course he can't know everything, but on the other hand he should have reasonable knowledge of the whole range of issues before the country and developments in the government, and I think there are just too many illustrations of the fact that he is really a fairly detached and almost indifferent president.

MacNEIL: You just don't agree with that?

Mr. SMEE: I don't agree with it. I simply cite the record. The record of the country over the last four years seems to have been considerably improved over what it was in 1980, and if it occurred on this man's presidential watch then I think he's entitled to some of the credit.

MacNEIL: Well, what about some of the other things we just heard Mr. Powell say on the budget deficit, which you and I discussed a moment ago. He described the "wild excess of the Reagan administration" on the budget.

Mr. SMEE: The wild excess I suppose refers to the tax cuts, because those are the cause, I presume, at least in my judgment, of the reason why we have the kind of deficits we do have now. We cut taxes while we are spending money and also, of course, spending more money on the military. I think there is some imbalance in that area. I don't think that the Reagan administration is immune from criticism in the area of the budget and the area of deficits, and we have said so in the past. I think, however, that the country has tended to become hysterical over things that can be corrected. I can recall, for example, when the Arab oil countries -- oil exporters raised the prices and the end of the world was in sight. Now, suddenly a few years later we have an oil glut, prices are down and there's no longer a problem with our foreign exchange.

MacNEIL: You think anxieties about the budget are a question of hysteria? It's going too far?

Mr. SMEE: I think they're overstated. I think that the deficits can be handled. I think, for example, Japan in the mid-'70s went far overboard on deficits for a couple of years. Their percentage of gross national product that was represented by the deficit was greater than ours ever was, yet look at Japan today.

MacNEIL: What do you say to that, Mr. Powell? This may be overreaction on the deficit?

Mr. POWELL: Well, these deficits are triple the deficit of Jimmy Carter in his worst year. They are running close -- the $194 billion the last year, $175 billion this year; Carter's largest was about $56 billion. Now, I don't think that that sort of ratio, a tripling of the deficit, is something that we can disregard. First of all there were the tax cuts, which the Treasury yielded hundreds of billions of dollars in the course of the Reagan administration. You can't run a government without taxes. In addition it was built on high unemployment; high unemployment runs up the budget because of the unemployment compensation. And, of course, the enormous military budget, which is really, I think, beyond what would be a reasonable expenditure for defense.

MacNEIL: Let's turn it the other way. You heard Mr. Powell asy that Mr. Mondale was the best qualified Democrat to be president. What is your paper's view of Mr. Mondale?

Mr. SMEE: We find Mondale to be a fine gentleman, a decent man, a qualified public servant and a leader of his party. But when we come to examine his views, that is to say, what he stands for with respect to the economy particularly or, for that matter, with respect to our position in the world, we don't find anything that's so terribly outstanding. In fact, some of the things that he proposed in the nature of tax increases and social spending programs, which, frankly, we regard as echoes of the past that was a failed past.We don't find anything that would encourage us to believe that he would become a great president. In fact, we find a lot to suggest that he might become a Jimmy Carter clone.

MacNEIL: What do you say to that "echoes of a failed past" charge, Mr. Powell?

Mr. POWELL: I think that's the rhetoric that's used by the Reagan administration. The fact is that it was almost with great courage he has proposed a specific program for reducing these deficits, including taxes that put the emphasis in the higher incomes, where most of the benefits have gone during the four years of the Reagan administration. So I think he has been almost heroic in his presentation of the needs of this country, and he also has reasonable cuts in the expenditures. He has a specific plan; Reagan has none. We all know that next year either man who's president will have to raise taxes because the alternative is simply fiscal chaos.

MacNEIL: Mr. Smee?

Mr. SMEE: Well, the final remark --

MacNEIL: In view of what you said a moment ago.

Mr. SMEE: I agree that next year there will have to be something done. We will have to come to grips with the reality. One of the reasons we have not come to the grips with that reality in the past, of course, is that both parties play politics with this issue, and particularly in an election year, and are unwilling to state publicly what ought to be done. Ronald Reagan tried to state publicly early on in his administration something ought to be done about Social Security. We almost handed him his head for it. But ultimately and finally, through a bipartisan commission, we did get a reformation of the system and got it on a sound footing. I think in his next term of office, assuming he's re-elected, that Ronald Reagan will confront some of these social programs, some of these social entitlement programs, particularly for the middle class, and will do something about reducing their cost.

MacNEIL: Mr. Smee of the Daily News in New York, Mr. Powell of The Arkansas Gazette, thank you both for joining us. Jim? Percy vs. Simon: Key Race

LEHRER: We close out our politics section tonight with a look at an election in which only Illinois people can vote. It's for the U.S. Senate between Republican incumbent Charles Percy and Democrat Paul Simon, who is a four-term House member. Because Percy is chairman of the Senate Foreign Relations Committee and a lot of other reasons, it is considered one of the key and most interesting of the 1984 Senate campaigns. Elizabeth Brackett has the story.

ELIZABETH BRACKETT [voice-over]: The challenger for the Senate seat in Illinois, Congressman Paul Simon, is clearly on friendly ground here, an AFL-CIO rally in Chicago led by labor's strong man, Lane Kirkland.

LANE KIRKLAND, president AFL-CIO: We need Paul Simon in the United States Senate.

BRACKETT [voice-over]: But it wasn't always like this. The last time Charles Percy ran for the Senate, he got the endorsement of the AFL-CIO. It's different this time. This time the senior senator from Illinois, who heads up the powerful Senate Foreign Relations Committee and is well-respected in Washington, is under attack on his home turf, under attack by the right for being too liberal, and under attack by the left for being too conservative. The latest round of ads in this tough Senate race link Percy to right-wing evangelist Jerry Falwell.

NARRATOR [Simon ad]: The Charles Percy we once knew would have rejected Falwell's support, but now they have some things in common. The Moral Majority forces their version of organized prayer on us, and Percy endorses [it]. Paul Simon, a Senator we can count on.

Sen. CHARLES PERCY, (R) Illinois: I've always been a progressive moderate Republican, have never changed one iota on the social issues.

BRACKETT [voice-over]: But political organizer Slim Coleman says in his Chicago neighborhood Percy is in trouble.

"SLIM" COLEMAN, political organizer: Percy, just his popularity has plummeted. There is a very definite and defined point of view that he's moved to the right about 45 degrees, that he's realigned himself with Reagan, that he's no longer the independent that he said he was. I would be surprised if he gets 25% of the Lakefront, where he had done very well before.

BRACKETT [voice-over]: The attack is just as tough from the far right. Conservative publisher Richard Viguerie told reporter June Cross Illinois Republicans should support the Libertarian candidate instead of Percy.

RICHARD VIGUERIE, Conservative Digest: It is no secret that I and most conservatives have been very disappointed, upset, disillusioned with Senator Percy and his liberal, big business voting record over the years.

Sen. PERCY: Who is this crowd coming in here -- Dolan, Viguerie, Weyrich? What do they mean in Illinois? Not a thing. They flatly and categorically stated why. It's the only way they have of getting Jesse Helms eligible to be selected as chairman of the Foreign Relations Committee.

BRACKETT: Though he says he doesn't want it.

Sen. PERCY: That's what he said.

BRACKETT [voice-over]: Percy has always received strong support from normally Democratic black voters, 33% in his last election. Percy says he will do that well again with the black vote, but Chicago Mayor Harold Washington has put radio ads on black-oriented stations attacking Percy.

HAROLD WASHINGTON, (D) Mayor of Chicago [Simon ad]: As mayor of Chicago I am obligated to tell you that Charles Percy has been bad for our city. Ronald Reagan and Charles Percy have let us down. On November 6th let's dump the Reagan-Percy team and elect Walter Mondale and Paul Simon, a team we can count on.

BRACKETT [voice-over]: Percy's first reaction was to call the mayor a racist and warn him not to look to Percy for federal funds for Chicago.

Sen. PERCY: Oh, that was in a moment of anger, and I -- certainly the mayor knows now that we'll have continuing and same relationship that we have had in the past.

BRACKETT [voice-over]: But the damage was done. Chicago alderman and committeeman Allan Streeter.

ALLAN STREETER, (D) Chicago Alderman: I was at first surprised and shocked. Then I felt somewhat hurt that a senator would make this kind of a statement to one of the mayors that we elected. And I felt as a black person that I wanted to go out and take Senator Percy and drag him down the street and throw him in the river.

BRACKETT [voice-over]: Despite attacks from all comers, Percy has retained the support of middle-of-the-road Republicans, particularly those in the business community. Chicago stockbroker Phillip Hummer.

PHILLIP HUMMER, stockbroker: I think that there's a great confidence in his integrity and in his understanding of economic issues. And tax issues and budgetary issues and the difference between him and his opponent is that Senator Percy is interested in relying first on growth of the economy and growth of the private sector, and his opponent is more inclined towards taxing, spending, and that's no way to build the strength of the economy.

BRACKETT [voice-over]: Paul Simon rejects the notion that his classically liberal views are out of touch with the times.

Rep. PAUL SIMON, Democratic challenger: I have been able to convey a progressive program in terms that conservatives understand and conservatives have supported me. And I think you're going to find a lot of conservatives supporting me in this election, too.

BRACKETT: Are you in touch with the times?

Rep. SIMON: I think I am. I think I am. I think I am in -- I don't know if you can say in touch with the times if I'm a -- you know, I still wear a bow tie, I don't try and change my views with whatever the latest polls are. If the question is phrased a little differently, am I in touch with the needs of Illinois and the country, the answer is yes.

BRACKETT [voice-over]: Though in front of audiences like this hispanic neighborhood group, Simon often calls for liberal solutions to society's problems.

Rep. SIMON: I think the next great step forward we're going to make as a society is to guarantee job opportunities for all Americans.

BRACKETT [voice-over]: Simon's support is strong here. It grew stronger when Percy failed to show up for the evening debate, a move that so angered the group it found Percy at his next scheduled event and delayed his appearance on a radio talk show.

[on camera] The battleground in his campaign is in neighborhoods like this one on the southwest side of Chicago. Traditional Democrats, many here have turned to Ronald Reagan because of his conservative positions on issues like abortions and civil rights. That switch has cut into the Democratic vote for Paul Simon as well.

NARRATOR [Percy ad]: Paul Simon doesn't think Walter Mondale goes far enough --

BRACKETT [voice-over]: The issue Percy has used most effectively among conservative white ethnics is taxes. Percy has accused Simon of wanting to raise taxes even more than Walter Mondale.

NARRATOR [Percy ad]: If you feel you're not paying enough taxes, Simon's your man. Otherwise, stick with Percy.

BRACKETT [voice-over]: Simon calls the ad grossly unfair and inaccurate.

Rep. SIMON: I expect ads to be confrontational, but I expect them to be accurate. His ads have not been. They've been labeled inaccurate by the editorial writers, and properly so.

BRACKETT: Do you feel the tax issue has been your most effective issue so far?

Sen. PERCY: Absolutely, and it's driving him right up the wall. It's pinning the tail on the donkey. It's calling it exactly what it is.

BRACKETT [voice-over]: Ron Sabonia has lived on the southwest side of Chicago all of his life. His dad is a strong union man and has always voted Democratic. Ron has voted with the Democrats, too, until this year. Now Ron is working for the Republican ticket, including Charles Percy.

[interviewing] Are you going to support Charles Percy?

RON SABONIA, Chicago voter: Yes, but it's not a vote for Percy. It's more of a vote against Simon. I don't like his fiscal policy, let's say. He seems to be a tremendously big spender, and that's something I don't think we need right now.

BRACKETT [voice-over]: Simon will rely on both his own organization downstate and the tattered, split, but on Election Day still productive. Democratic machine in Chicago. Simon has walked a careful line between Mayor Washington and opposition Alderman Edward Vrydoliak. And, unlike some Democratic candidates this year, Simon is not afraid to be seen in the same room with Walter Mondale. But Percy also has a fine line to walk as he tries to maintain some of his moderate credentials while wanting to reap the benefits of running with the conservative president who is 16 points up in the Illinois polls.

LEHRER: That report by Elizabeth Brackett. Most recent polls are now calling the Simon-Percy race a dead even race.

[Video postcard -- Colonial Beach, Virginia] An Eye for an Eye

MacNEIL: Our next focus segment on this NewsHour returns us to the story of anti-Arab terrorism in Israel. As we reported earlier, Israeli police are searching for terrorists who fired an anti-tank rocket at an Arab bus yesterday near Jerusalem. A group calling themselves the Avengers said the attack was in retaliation for the murders last week of two Jewish students on the West Bank. The Avengers are also demanding the release of some 25 alleged Jewish terrorists now on trial for various acts of terrorism against Arabs. Jewish terrorism against Arabs was spawned by the Camp David accords, and the forced eviction of Israeli settlers when the Sinai was returned to Egypt. Israeli settlers on the West Bank feared they would be next if the Arabs there were granted autonomy under the terms of Camp David. Camp David also aroused Arab passions on the West Bank, where protests, riots and attacks against Israeli settlers became commonplace. Those attacks prompted Jewish settlers to form what government officials have described as an underground to launch retaliatory violence against Palestinians. Early targets of the alleged terrorists were the Arab mayors of three towns on the West Bank. Four years ago they were the victims of car bomb attacks. Using filmed reconstructions, Tom Mangold of the BBC picks up the story from there.

BASAAM SHAKAA, ex-mayor of Nablus: I put my leg on the clutch and went to put the gear as the reverse. The bomb exploded and I know directly that I am in very danger cause and that my body is begin to be empty.

KARIM KHALAF, ex-mayor of Ramallah: When I was reversed like this the car was blown up. I saw my blood before hearing the force of the explosion. Then I tried to escape from my car.

YUVAL NEEMAN, Minister of Science and Development, 1982-84: This was an operation against people who were really inciting the Arab crowds to riot against the Jewish settlers. It was not hitting innocent people.

TOM MANGOLD: Do you have any sympathy for the mutilated mayors?

HANNAH NOVICK, mother of suspected terrorist: Do I have any sympathy for the mutilated mayors? Well, I know they wanted to kill us. Do I have to have sympathy for people who want to kill me? Do I? I ask you.

MANGOLD [voice-over]: Were you seen by any investigators, any Israeli or local Arab police investigators?

Mr. KHALAF: Not at all: There's the first day in the operation room without asking me anything. Then he came, I was in --

MANGOLD: Who?

Mr. KHALAF: A policeman. And I was in a very dangerous situation, position at that time. The doctors, they didn't allow them.From that time till now no investigator, no policeman asked me what happened with me.

MANGOLD [voice-over]: It was Israel's Ministry of Justice in Jerusalem which first uncovered some embarrassing inequalities of law enforcement on the West Bank. Israel's deputy attorney general was asked to investigate law enforcement relating to crimes committed by Jewish settlers on the West Bank. It took her a year to expose the facts, and then her findings were held up by the cabinet for 20 months. The report was dynamite. Law and order was on the verge of breakdown. Mrs. Karp revealed that police investigations were being carried out in an ambivalent manner. Three-quarters of the files she examined involving allegations against settlers had been closed without results by the police. Referring to Arab-Jewish tensions on the West Bank, the Karp Report also established that settlers sometimes took the law into their own hands. They called it self-defense. Clearly, a fully independent authority was needed to investigate Jewish terrorism. Shin Beit, the nation's legendary secret service, is that kind of organization. Despite suspicions, Shin Beit was uncomfortably aware of the political overtones of this investigation. It would need hard evidence. Three years have passed and still no results.

On July the 7th last year, Aharon Gross, a young student from Kiraiat Arba, was brutally murdered in Hebron. The settlers wanted government action to respond to PLO terrorism on the West Bank, and they wanted it now. Once again they felt vulnerable. If the government wouldn't act, they would. On July the 26th, two men dressed as Arabs, their faces partially masked, ran through the grounds of the Islamic college in Hebron. Three Arab students were murdered; another 33 were wounded, some seriously, when the terrorists' guns sprayed bullets inside the building. The attackers escaped in a car driven by a third terrorist. The attack took place three weeks after the murder of Aharon Gross.

DAVID ROTEN, defense attorney: The time came to fight back through the heart of the PLO and therefore this attack was made. The point of the attack was to warn the PLO and the Arabs in the area that the Israeli people can do the same as the PLO is doing.

MANGOLD [voice-over]: Over winter and the new year PLO terrorists mounted several bloody attacks in Israel. Four passengers were killed, 43 wounded, when a nail bomb exploded inside a bus in Jerusalem. In April this year, five PFLP terrorists hijacked an Israeli bus. All were killed, as was one Israeli soldier. It was by now almost predictable that Israel's self-appointed avengers would respond. At nine minutes past 10 p.m. on April the 27th, a Shin Beit agent posted at a road block on the Hebron-Jerusalem road was ordered to let a specific car, registration number 3382582, pass through unhindered. The car was next trailed by another Shin Beit agent in Jerusalem and followed to the Mount of Olives. The men in the car were seen to place five bombs on the back axles of five Arab-owned buses. Timing devices were set for 4:30 p.m. the next day. In the city's rush hour the blasts would have caused carnage. Each bus would have been packed with Arabs, Jews and tourists. Not only had Shin Beit averted their murder, but at last they had the prima facie evidence they'd spent years looking for. As dawn broke the surveillance on the suspects' car ended as both men were picked up, arrested and held.

[on camera] Four whole years have now passed since the original attack on the West Bank mayors and at last the days of the underground were beginning to come to an end. Within hours of the arrest, Shin Beit ordered the detention of the other suspects.

[voice-over] The arrest and trial of the terrorists is a triumph for Israel's democracy. Arab terrorists who attack Israel are never brought to trial in their own countries. Instead, they're hailed as heros. The trial takes place, coincidentally, at the very time that Israel's political parties have buried their wide differences in a government of national unity. When the trial ends, the verdict will be passed on the prisoners, but the judgment will be on Israel.

MacNEIL: In that excerpt from a longer report by Tom Mangold of the BBC, some of the scenes you saw were filmed recreations of the events reported. Acting in the Joint

LEHRER: Our final segment tonight has to do with prisons and efforts to rehabilitate prisoners. It's a behind-the-scenes look at one prison that takes a different approach with its young inmates.Charlayne Hunter-Gault has our report.

CHARLAYNE HUNTER-GAULT [voice-over]: This is the Harlem Valley Secure Facility, a New York State prison for young men between the ages of 13 and 21 who've been convicted of violent crimes such as murder, rape and armed robbery. There are many prisons for young people throughout the state of New York, but Harlem Valley is different for at least two reasons. It is one of only 10 serving the most seriously troubled young offenders, and it has a very different approach to handling them. It's based on an attempt to develop a different kind of prison psychology. As a result, officials don't call it a prison.They call it a facility. They call the inmates residents and the guards child care workers. And sometimes the sound of music and song can be heard over the prison walls. That is a part of a program pioneered here, using the techniques of the theater with support from professionals as a way to teach the young men to come to grips with the problems that put them there. It's called Theater Rehabilitation for Youth, TRY, for short.

KEN BERMAN, TRY executive director: No, this is the problem. You are not used to the ad libs.

HUNTER-GAULT [voice-over]: Ken Berman, a former Broadway producer, came up with the idea of teaching the prisoners to act and dance and sing while working part time as a drama teacher in the prison.

Mr. BERMAN: I thought that this could work because I know that in every teenager, in addition to the feelings of shyness and the need to pull in, there was also an enormous need to go out. And these kids are not given the opportunity that most of us afford our children to express themselves in positive ways. And that a play of this sort, a play that they trust, a play that they can believe in themselves, becomes an extremely viable way for them to express the feelings they have that other kids have as well.

ACTOR: Well, if they're going tohelp me, let 'em do it and stop talking about it. You know, everyone's always rapping at me about my potential. Well, I am potentialed out.

Mr. BERMAN: There is a level of passion almost that I'd like to achieve --

HUNTER-GAULT [voice-over]: The first time around Berman chose the play Pippin. That worked, but somehow he felt the need to produce something more relevant to the experience of this unique group of actors. So Berman went to work interviewing young criminals for several months. What that produced ultimately, with the help of professional composer Michael Carwile, was "And the Chains Fell," a musical drama based on the real-life stories of prisoners doing time in Harlem Valley.

Mr. BERMAN: One Sunday I was rehearsing here, and a kid had been standing waiting for a visit and the visiting bus came and his mother wasn't there. And for around half an hour he was in a very dark funk. He sat down and started to write a letter home, and it was sort of forgiving her up front for not being here. [song from "Chains"]

HUNTER-GAULT [voice-over]: This young actor was not a part of the original cast, many of whom have been paroled or moved on to other facilities. But the story so closely mirrors the lives of many of these young offenders that it is not difficult for a new cast to step in and relate immediately to what is going on.

ANTHONY, actor-inmate: 'Cause I am putting it all together. And right now my mother may be disappointed with me, being that I'm here, but being that I'm doing a lot of positive things for myself and I'm coming out of here better than I was when I came in, it's like she'll be proud of me then.

Mr. BERMAN: You got to pick up the pace, gentlemen. You've got to move it along.

We've had some pretty emotional times in this room working towards scenes. And psychologists who have observed those sessions have told me that what I'm doing is really a very startling form of therapy.

HUNTER-GAULT [voice-over]: In a scene about group therapy, Berman plays the role of a prison psychiatrist.The real prisoner portrays a fictional prisoner who is about to be released on parole.

"INMATE": Sure I did.

"PSYCHIATRIST": I don't think so. I don't think you even have the brains enough to be scared.

INMATE: What's to be scared of?

PSYCHIATRIST: Fifty percent, that's what. Gentlemen, figures don't lie. Fifty percent of you guys will land right back in here.

INMATE: I'll tell you why. Straights like you tell us what to do 24 hours a day. If you break you know someone's going shout at you, put their hands on your shoulder. Outside there's no one on the streets to do that.

PSYCHIATRIST: Look. No one took your freedom from you but yourself. when you have that freedom again you have to be responsible for you.

INMATE: Sounds real hard, man.

PSYCHIATRIST: So, what's easy? Think about it. Think about other ways to protect yourself from yourself. We'll talk about it again next time.

HUNTER-GAULT [voice-over]: John Lum, director of the Harlem Valley Facility, was responsible for bringing in the TRY program.

JOHN LUM, Harlem Valley Security Facility director: When it first came in it was something that people thought, "My God, why are we doing this here? You know, we're going through all this construction and we don't have the facility in place yet, and here Lum is bringing in this drama program, you know, with these fruity people who are artistes to come into this environment." And the kids take cues from adults, so the kids were kind of back-offish on the whole experience at first as well, saying, "Well, no, that's sissy stuff, you know. I'm macho and I want to be into the macho sports and the athletic kinds of things, and going on stage is a very sissy kind of thing." And gradually, as this organization has evolving and evolved with the TRY program as part of it, it's now the most popular program within the institution.

HUNTER-GAULT [voice-over]: One indication of just how popular the program is, is that Berman is never at a loss for a cast. The actors are all volunteers who do so for different reasons.

STEVE, actor-inmate: What the theater program does for me is help me face with my problems, help me to deal with people and more or less relaxes me. The person I play, Stan, is like a person who is troubled with family problems, emotional problems and, you know, he's found karate to sort of discipline himself.

HUNTER-GAULT [voice-over]: In this scene another performer receives a visitor, his younger brother, played by a professional actor. The younger brother boasts about his own fledgling career in crime.

ANTHONY [little brother]: Me and Churchill broke into this bad set of wheels and got a great tape deck, but only got five bucks for it off of Gimp.

VINNIE: That's a real shame, huh?

ANTHONY: Ain't it? But that's okay because we made up for it by hitting up Old Man Hawkins' cash register. You should have seen him, Vinnie, standing there shaking. He didn't try to stop us or nothing.

VINNIE: I wish he had.

ANTHONY: What do you mean, man?

VINNIE: I wish somebody had. I wish somebody woulda tried to stop me. Do you know where you're heading for, stupid? Right for this place or someplace just like it. You're bad all right. You're a badass fool!

JOHN, former resident: It relates to my own life a lot, which is really surprising because the scene was written for a different character. But it relates to me a lot because it goes -- I go through the same thing every day with my brother. You know, I tell him, I says look, you have to stay out of trouble, you can't do this, you got to pick your friends right. You have to do certain things. And he says, yeah, yeah, yeah. I won't get in trouble, I won't do this. You know, just like in the scene.

ANTHONY: You sound like one of the pigs in the neighborhood.

VINNIE: Shut up about pigs, Anthony! You don't know nothing about pigs, and you don't want to know.

ANTHONY: I know they're getting to you. I know they're turning your head around.

VINNIE: Nobody's turning my head around but me.You know what I see? I see me five years ago and it's killing me.

Mr. BERMAN: A lot of these kids have enormous guilt feelings, and that's very healthy. Because if they can get rid of that, if they can get rid of that now, then maybe they can go on with the rest of their lives.

ACTOR: Sometimes late at night I start thinking about the crime I committed, and I'll tell you the truth, man. I go over every minute that happened. It's like a movie in my mind. Every detail. And the main thing is it's stupid. Yeah, stupid is what it is. It's not brave. It's not scary. It's not some big adventure. Just plain dumb.

Mr. BERMAN: Bernard, Bernard, Bernard. Be a little more sarcastic. "It's not brace. . ." Yeah, right.

Mr. BERMAN: The boy is expressing an enormous amount of frustration and anger at the utter stupidity of his crime, the fact that it was not a premeditated one and the fact that he was just angry and bored and hot and so he faked a stickup.

ACTOR: These two suckers, a man and a woman, theycome toward me and I go and stick 'em up. Man, I didn't even have no weapon. No piece, no shank, nothing. Just my hand stuck in my jacket like a rod.

BERNARD, actor-inmate: Yeah, the part I play, yeah, it's like, you know, I could say that but then I feel for myself when I say it right, you know? It's like I'm not saying it just for the part like that. I'm saying it for me, too. When I look I see all the people backstage and then I say, yeah, I know, I'm acting, but if I just like tune into myself and keep to myself then it's just like off of me and it's real.

HUNTER-GAULT [voice-over]: The words have extra special meaning to this young actor known as Steve, one of the original cast members who did his time and is now free on the outside. But Steve still comes back voluntarily to play his old role.

"INMATE" [Steve]: I'll be out of here soon. I got to tell you. I been in and out of lockup since I was 8 1/2 years old, mostly in. I'm 16 now, and I ain't certain of anything in this life but one thing I know. Out there in the world it's a different place, a whole different place.

STEVE, former resident: For me personally I didn't have that assumption that I was going to get back in trouble because I learned my lesson. I went out there and I got a job. It pays extremely good money for a person who is only 18 and this is his first job. I'm doing great.

HUNTER-GAULT [voice-over]: Berman's hope is that all of his inmate actors will end up like Steve, although he knows the reality is that half of them will end up back in prison, and not voluntarily like Steve. In spite of that, Berman says society must, as he has attempted to do, find new ways of solving the problem.

Mr. BERMAN: Obviously our system as we have structured it doesn't work. The recidivism rate is heartbreaking. There must be new avenues. There must be new ways to reach these people.Or you can line them up against the wall and shoot them. You can do that. Now, there are many people who want to. And that maybe is another solution. If you're not going to shoot them you better deal with them, because they're going to be back in your neighborhood very soon.

LEHRER: That report the work of Charlayne Hunter-Gault. We had also planned and promised a major focus piece on the Baby Fae case later on in the program. Technical problems among other things have prevented that from happening. Sorry. Again the major news of the day.

OPEC members agreed to an oil production cut aimed at preventing a worldwide price war.

And the Reagan-Mondale race for president went into its final full week with tough exchanges on economics and human rights. Good night, Robin.

MacNEIL: Good night, Jim. That's our NewsHour. We'll be back tomorrow night. Thanks for watching. I'm Robert MacNeil. Good night.