The MacNeil/Lehrer NewsHour

MR. LEHRER: Good evening. I'm Jim Lehrer in Washington.

MR. MacNeil: And I'm Robert MacNeil in New York. After the News Summary this Wednesday, our first fact or fiction report. Every week until the election the Bush and Clinton campaigns will rebuff what each considers the distortion of the week by the other side. Then Time Magazine National Security Correspondent Bruce Van Voorst reports on the ongoing controversy over gays in the military. NEWS SUMMARY

MR. LEHRER: President Bush had some election season good news for wheat farmers today. He announced $1 billion in new agricultural subsidies for wheat exports. He made the announcement after touring a family farm near Humboldt, South Dakota. Mr. Bush said he still believed in free trade, but his export enhancement program, or EEP, would help the U.S. compete against countries which routinely subsidize agriculture exports.

PRESIDENT BUSH: This is the largest quantity of wheat ever made available under the EEP program at one time. And there is no question that in a world of open trade, the U.S. would be the premier supplier of wheat to world markets. And that's why we're committed to reducing subsidies worldwide. But my announcement today should leave no doubt with heavy EC subsidies continuing this EEP program is vital and we will use it as necessary. I am putting foreign governments on notice to that effect right here today in South Dakota.

MR. LEHRER: The President also had good news for General Dynamics workers in Ft. Worth, Texas. He announced he would recommend the sale of 150 F-16 fighter jets to Taiwan valued at $6 billion. General Dynamics had announced massive layoffs in July because demand for their airplanes was so low. The United States had banned such sales to Taiwan since establishing diplomatic relations with Mainland China in 1979. Robin.

MR. MacNeil: Bill Clinton today attacked the Bush administration's higher education policies. He said the President has tried to cut grants and loans, while colleges had been priced out of range for many Americans. He spoke at Montgomery College in Rockville, Maryland.

BILL CLINTON: If Congress had let him get away with it, George Bush would have cut off Pell grants to over 400,000 students this year alone. He tried to change the law so that if you make $10,000 a year, you're too rich for a college grant from the federal government. His '93 budget cut college aid $79 million and he vetoed a bill -- he vetoed a bill which would let people deduct the interest that they pay on their student loans from their tax burden.

MR. MacNeil: Clinton also faced a new round of questions about his draft status during the Vietnam War. The Los Angeles Times reported that Clinton's uncle had contacted a naval reserve commander to secure a reserve slot for Clinton, which Clinton never used. The report said this was done to keep Clinton out of the draft while he was studying in England. When asked about it, Clinton said the story was news to him.

MR. LEHRER: The California budget deadlock is over. It ended last night when state legislators passed a $57 billion budget. It was immediately signed by Republican Governor Pete Wilson. Wilson had vetoed previous budgets passed by the Democrat-controlled legislature, saying they did not make large enough spending cuts. The state was forced to issue I.O.U.'s to pay its bills during the two-month impasse. After last night's vote, Gov. Wilson said this.

GOV. PETE WILSON, California: The budget that we have just signed is a very difficult budget, not only difficult in terms of getting to my desk, but it's a difficult budget in that it reflects the very trying time that we are experiencing, the worst economic times since the Great Depression. It's compelled austerity that we did not seek and under those circumstances I think this budget, as difficult, as unpleasant as it has been, is a tribute to the people who have managed to finally put it on my desk.

MR. LEHRER: The Commerce Department reported today per capita income rose 2.4 percent in 1991. That was less than the 4.4 percent inflation rate for personal spending. It was the first time inflation has outpaced income growth since 1982. Orders to U.S. factories fell in July. Another Commerce Department report said the 1.1 percent drop was due to a decline in demand for commercial aircraft and parts. A General Motors plant in Oklahoma City was forced to shut down today. It was the sixth to do so since workers at a GM body stamping plant in Ohio went on strike last week. The closing has choked off supplies for the others. United Auto Workers officials say they are protesting GM's plans to permanently close 21 plants and eliminate 60,000 jobs by 1995.

MR. MacNeil: President Bush announced today that he would release $755 million in disaster aid for farmers who lost crops in Hurricane Andrew, or in flooding disasters earlier this year. In Florida today, the first tent cities opened in Homestead. Similar encampments are scheduled to open tomorrow. They will house about 4,000 people, only a small percentage of those left homeless by the hurricane. Food and other necessities donated by individuals and groups from around the country also arrived at the camps today. Workers have begun attempting to restore power and other services. The state is hiring temporary workers with federal money to clean up debris and distribute food. A Pacific Ocean earthquake triggered a series of tidal waves that hit Nicaragua late last night. At least 52 people were killed and more than 100 are missing. David Simmons of Worldwide Television News narrates this report.

DAVID SIMMONS: The waves reeked havoc on communities along Nicaragua's West Coast. Over 300 kilometers of shoreline have been devastated by the tidal onslaught. Homes and boats were swept away and vehicles sent flying as 10-meter waves engulfed the shoreline. Residents say the high waters sucked people, furniture, and even buildings out to sea as it repleted. An emergency committee set up to cope with the disaster says it's too soon to assess the full extent of the damage. But officials fear the death toll will rise rapidly. Hundreds of people have been injured. Dozens more are missing and thousands have been left homeless. Troops with medical supplies and tents have been dispatched to help those in need. And Nicaragua's president, realizing the extent of the disaster, has already made an appeal to the internationalcommunity for help.

MR. MacNeil: The State Department announced it was providing $25,000 in relief aid. Spokesman Richard Boucher said the Nicaraguan government had not yet requested additional assistance. He said U.S. disaster relief officials were already in the country to assess the situation.

MR. LEHRER: China expelled a U.S. academic today for his connection to Chinese dissident Shen Tong. Ross Terell was an adviser to Shen, who was arrested yesterday just before announcing the formation of a human rights group in Beijing. Shen had taken part in the 1989 pro-democracy demonstrations in Tiananmen Square and had recently returned from three years in exile in the United States. He secretly reported this statement before his arrest.

SHEN TONG, Political Dissident: [Monday] I returned to stand again with those I left behind, following the brutal crackdown of the 1989 pro-democracy movement. I'm here to strengthen the bridge between those who were forced to flee and those who have carried on the struggle from within, the key forces in shaping the political future of my homeland.

MR. LEHRER: Two French journalists who recorded that statement were expelled yesterday. State Department Spokesman Richard Boucher said Chinese officials rejected U.S. protests about the treatment of Shen, saying the United States had no right to interfere.

MR. MacNeil: Serb forces in Bosnia signed an agreement today with United Nations peacekeepers to put all heavy weapons in Sarajevo and two other cities under U.N. supervision. Under the accord, heavy guns, like these Howitzers, would be monitored by U.N. troops stationed in the area. The Serbs have at least 11 gun batteries in the hills surrounding the capital. A Serb officer said the agreement would not prevent his forces from firing their artillery in self-defense. Also today, Bosnian officials said Serb forces have begun to pull out of Gorazde after a three and a half month siege of that Eastern city. That's it for the News Summary. Now it's on to campaign, fact and fiction, and gays in the military. FOCUS - FACT OR FICTION?

MR. LEHRER: We go first tonight to a few lies and some distortions as seen and alleged by the Democratic and Republican Presidential campaigns. The Clinton/Gore charges are about how many times taxes were raised in Arkansas. The Bush/Quayle allegation centers on Clinton economic claims. It is the launching of a new element of our campaign coverage, an ongoing attempt to ventilate what each campaign believes are low blows it is receiving from the other. George Stephanopoulos, the campaign's communications director, represents Clinton/Gore tonight. He is in Little Rock. Campaign senior adviser Charles Black is here for Bush/Quayle. The Clinton complaint will be first. It has to do with the continuing charge from the Bush campaign that the Arkansas governor raised taxes 128 times. Here is how President Bush put it in his acceptance speech in Houston.

PRESIDENT BUSH: [Houston, August 20] Two years ago, I made a bad call on the Democrats' tax increase. I under estimated Congress's addiction to taxes and with my back against the wall, I agreed to a hard bargain, one tax increase, one time, in return for the toughest spending limits ever. Well, it was a mistake to go along with the Democratic tax increase. [applause and cheers] And I admit it. But here's the question for the American people: Who do you trust in this election, the candidate who's raised taxes one time and regrets it, or the other candidate, who raised taxes and fees 128 times and enjoyed it every time?

MR. LEHRER: George Stephanopoulos in Little Rock, what's wrong with what the President said?

MR. STEPHANOPOULOS: Well, President Bush asked the right question there. Who do you trust on taxes? But then he didn't tell the truth about his own tax record and he didn't tell the truth about Bill Clinton's record in Arkansas. The charge of 128 taxes has been reported as false by the Wall Street Journal, the Washington Post, AP, NBC News, and several other reputable news organizations. What the Republicans did is jerry rig from a list a bunch of phony tax increases, including lengthening the dog racing season, court costs on convicted criminals. But let's assume that their 128 figure has some validity, something even Bush aides say isn't true. By the standard the Bush campaign sets, Reagan and Bush together raised taxes and tariffs over 577 times during that same period of time. So what's sauce for the goose is sauce for the gander. If the number about Gov. Clinton is true, then they've raised taxes 577 times. What they don't tell you is that Arkansas has the second lowest tax burden of any state in the nation.

MR. LEHRER: All right. Well, let's go to -- we'll leave the 577 for another program. Let's go to the 128. Is it your -- what -- are you saying that Gov. Clinton did not raise taxes or taxes were not raised 128 times as alleged? Go through the list and give us an example of a few things that you say did not happen that the Bush/Quayle people say did happen.

MR. STEPHANOPOULOS: Well, for instance, on the original list there were three lines that they counted that were simply blank. Another list that they counted a tax increase is simply lengthening the number of days that dog racing can go on in Arkansas. Another item on the list is a $1 fee that convicted criminals pay to the courts. Another example, when they go to an energy tax, they count as diesel gas and ethanol all as separate taxes. They break one tax hike down into three separate taxes. They also don't count tax decreases. There were 69 during Gov. Clinton's tenure.

MR. LEHRER: So the -- how does it bottom out then? In other words, the message that the Governor raised taxes 128 times in Arkansas, you're saying that the bottom line was he didn't raise taxes at all, or he didn't raise 'em --

MR. STEPHANOPOULOS: The bottom line is that he cut taxes more times than he raised them. Secondly, the number is specious. What they've done is just add together apples, oranges, pears, and plums and called them all taxes. It's simply not true. And by the standard they set, they've raised their own taxes 577 times.

MR. LEHRER: Okay. Charles Black. It's a specious figure, 128, according to Mr. Stephanopoulos. Where did you get the figure and how do you back it up?

MR. BLACK: Well, Jim, we got the figure from the Arkansas legislative tax handbook. I promised you, George, I'd have it with me next time and I do. I have the whole stack of them here. This is a publication of the Arkansas legislature, the Democratic legislature run by Gov. Clinton's --

MR. STEPHANOPOULOS: But it's not your list.

MR. BLACK: -- allies. And we compiled the figures by taking verbatim, line by line, what the Democrats in Arkansas said about how many facts and fee increases Gov. Clinton had passed. But I also say that we also know for a fact that he doubled state spending during his years as governor. We know that he brags about the constitution of Arkansas requiring a balanced budget, therefore, he obviously doubled revenues. It's hard to say he did more tax cuts than tax increases, when you know that revenues doubled during that period. Bill Clinton wants to do the same thing for America as he did for Arkansas, large tax increases, large spending increases.

MR. LEHRER: Are you -- in other words, you're staying with the 128 figure, you're not backing off of that?

MR. BLACK: Not backing off a bit. I've got 'em all with me right here in publications that George's friends did.

MR. LEHRER: Is it -- do you consider it a fair charge to include things like the dog racing season and cutting, making a difference between diesel fuel and regular fuel, all the things that Mr. Stephanopoulos said?

MR. BLACK: Believe it or not, the dog racing, the length of the dog racing season down there means millions of dollars. Extending that season is a million -- multimillion dollar revenue item. The diesel tax that George is talking about, that was two separate bills, two separate pieces of legislation, one for gas and one for diesel fuel, so, of course, it should be counted as an additional tax.

MR. LEHRER: Mr. Stephanopoulos, why not count 'em?

MR. STEPHANOPOULOS: Well, it's silly to count simply because more revenues are coming in, because more people are going to the dog races, that's not an extra tax. What they also don't count is the tax decreases, or the repeal of taxes. It's simply a specious number. But let's accept what they're saying, even though many reputable organizations have said it's simply not true. By the standard they set, they raised taxes 577 times. They also won't tell you that George Bush signed the second biggest tax increase in history in 1990, followed by -- that followed Ronald Reagan's largest tax increase in history in 1982, and the third largest tax increase in history in 1984. With Republicans in the White House, Americans have gotten more taxes than ever.

MR. LEHRER: Do you accept that, that if you used the same criteria that you used in drawing up your figure, Mr. Black, of 128, and applied it to Reagan/Bush, you'd have 577, instead of just 1 that the President said in his speech that we just used?

MR. BLACK: Well, I haven't asked the Arkansas Legislative Resource Bureau to do the analysis for the Reagan years, but I'll tell you this. The largest tax cut in American history was passed by Reagan and Bush in 1981. It triggered the largest peacetime economic expansion in the history of this country. We know for sure that President Bush has proposed tax cuts, tax incentives to the Congress, for economic growth, including capital gains tax reductions and investment tax allowance, a $5,000 tax credit for first-time home buyers. But if those things were passed by Gov. Clinton's allies in the Congress, not only would they mean tax cuts for the American people, they'd mean more jobs. Hundreds of thousands of people who are unemployed today would have jobs if the President's economic growth package had been passed by the Democrats early this year.

MR. LEHRER: Mr. Black, Mr. Stephanopoulos has repeated accurately the fact that many national news organizations have looked at your 128 figure and have also -- it's not just George Stephanopoulos that has said you guys haven't quite got it right -- so how do you respond to that?

MR. BLACK: I respond -- I could go point by point through all 128, again taking it verbatim out of the Arkansas Legislative Tax Handbook. And, George, your argument's not really with me. It's with your own allies there in Little Rock. Go talk to 'em. They're not dead. They're alive and well. Go interview 'em and see where they got the numbers.

MR. LEHRER: George Stephanopoulos.

MR. STEPHANOPOULOS: Well, I think what -- we just heard a very interesting claim from Charlie Black. He said, let's bring back the days of Reaganomics. He says, let's bring back the days of the tax cuts in 1981, tax cuts which led to the largest deficits in history, which led to the economic mess we're in right now. Trickle down economics hasn't worked and President Bush wants to bring it back. He just claimed that President Bush's acceptance speech had promised more tax cuts. If President Bush keeps all of the promises he made in his acceptance speech, he's going to add $1.3 trillion to the deficit, or require $1.3 trillion in spending reductions, according to the AP. That means the virtual elimination of Medicare, the elimination of the Veterans Department, the elimination of the food stamp program, and most of the rest of the federal government programs that are helping real people. That's who's going to pay for the programs that President Bush is proposing.

MR. LEHRER: Mr. Black.

MR. BLACK: That's nonsense and George knows that's nonsense. The President has proposed -- and it's before the Congress -- spending cuts that will more than cover enough money to have a tax rate reduction which would spur economic growth in this country. He wouldn't abolish any of those programs. In fact, his mandatory entitlement caps specifically protect the recipients of Medicare and other entitlement programs, guaranteeing inflation increases, guaranteeing increases in the beneficiary population. Not only is it not true that he would not abolish any programs, he specifically guarantees those benefits in his plan. And if Congress would adopt his program to cap mandatory spending, there would be room for tax cuts which again would spur economic growth. You know, George, the 18 million people who got jobs, knew jobs in the Reagan/Bush years, would not have the same critique of Reaganomics that you do. They kind of enjoyed it.

MR. STEPHANOPOULOS: Jim, if I could respond to that.

MR. LEHRER: Sure.

MR. STEPHANOPOULOS: The President's budget that Charlie just referred to would cut $127 billion from Medicare. That's $2,000 for the average Medicare beneficiary, 30 million of them over the next five years. It's interesting, today the President was in South Dakota, calling for an increase in the export enhancement program of a billion dollars. The President's budget that Charlie just referred to, which was just put to the Congress in July, calls for a $3 billion cut in that same program. Which promise does President Bush intend to keep, the one he made today to the farmers in South Dakota, or the one that Charlie's referring right now on the show? He can't have it both ways.

MR. BLACK: The implication being that Gov. Clinton wouldn't use funds that are already appropriated to help American farmers, I guess. Is he against the use of that program?

MR. STEPHANOPOULOS: He's for the export enhancement program, but President Bush has said two things: Today before the farmers, he said he was for a billion dollars in new spending on the export enhancement program. Last month, when he sent it up to Congress, he called for a $3 billion cut. We just want to know which one he means.

MR. BLACK: Because he -- well, that's appropriated money that he proposed spending today and it's very appropriately spent. Now, now he would expect to cut those export subsidies when we complete the GATT round, get a new GATT agreement in which the Europeans quit subsidizing agriculture. When they quit, we'll quit.

MR. LEHRER: Let's go back to the 128. I'm determined to do that. Mr. Stephanopoulos, what about Charles Black's point that this information came from the Arkansas legislature, so what are you all complaining about?

MR. STEPHANOPOULOS: Well, the information didn't come from the Arkansas legislature. What he is taking -- he derived is phony list from a record of bills that were passed in Arkansas -- and what he's done is breakin' it down and put it together in new ways that added up to 128. But as I -- I can only repeat what I said before. Every objective analyst that has looked at this has said that the Republican list is phony.

MR. LEHRER: Yeah. You know, Mr. Black, there was another element to this story last week. It was reported by NBC News and one other public -- another publication that quoted an official of your campaign said, yeah, we know that 128 figure may not be that terrific, but it's working, so that's the way it is.

MR. BLACK: They quoted somebody anonymously --

MR. LEHRER: Yeah, exactly.

MR. BLACK: -- but you can get that almost anywhere in this town. That was nobody who spoke for this campaign. We stand by the 128 figure. I've got it documented right here. We can take as much time as you want to go through. But the real point of this is, Jim, what Gov. Clinton has done in the past is what he wants to do to America in the future. He's already proposed an economic plan with $150 billion in tax increases, $220 billion in spending increases. He accepts permanent deficits. He opposes the balanced budget amendment, is opposed to the President's tax cuts, spending cuts, deficit reduction, and balanced budget. The American people have a clear choice in this election of two paths to take this economy.

MR. LEHRER: Mr. Stephanopoulos, is Mr. Black's point well taken there, that you look at a past -- a person's past record to get some indication of what somebody might do in the future, and is that not fair? You're saying this is unfair, the 128, but is it not fair seen in that context?

MR. STEPHANOPOULOS: Well, it is important to look at people's records. And that's what we intend to do. Back in 1988, George Bush gave an acceptance speech where he said, "Read my lips; no new taxes." And then he signed the second biggest tax increase in history. He can't be trusted to keep his promise on taxes. And now he expects us to buy this pig in a poke. I'm going to cut taxes for everybody and the spending reductions will come later. But you can look into his budget and see what those spending reductions mean. Gov. Clinton's plan cuts taxes for middle income people and working class people. And it also has $140 billion in spending cuts to go with the new investments in jobs, education, and health care. Finally, it cuts the deficit in half over four years. We stand by our plan. We wish the President would come up with a coherent one that we could examine.

MR. LEHRER: All right. So before we move on, as I understand what the two of you have told us tonight is that the 128 figure, you, Charles Black, and the Bush/Quayle campaign are going to continue to make that charge, and you, George Stephanopoulos, and the Clinton/Gore campaign are going to continue to say it's a phony list and it's a distortion of the governor's record, is that right?

MR. STEPHANOPOULOS: No question about it. If we raised taxes 128 times, Reagan and Bush did it 577.

MR. LEHRER: So nothing changes?

MR. BLACK: I'll stand by my friends, my Democratic friends in Arkansas. Like I said, they're not dead. They're alive and well. You ought to go interview them, George.

MR. LEHRER: Okay, well, let's go now to a Bush charge against the Clinton campaign. And it centers on claims in a Clinton TV commercial that began airing in some parts of the country this week.

ANNOUNCER: [Clinton TV Commercial] In changing people's lives, that's the work of his life. Twelve years battling the odds in one of our nation's poorest states, Arkansas now leads the nation in job growth. Incomes are rising at twice the national rate. Seventeen thousand people moved from welfare to work. Bill Clinton has an economic plan to rebuild America, that invests in our own people, education, training, eight million new jobs in the next four years, a new direction. Those making over $200,000 have to pay more. The rest of us get a break. It's a plan to put people first again and six Nobel Prize economists say it'll work.

MR. LEHRER: All right. Charles Black, what's your problem with that?

MR. BLACK: Well, just almost every sentence is a misleading and false claim. First of all, "Arkansas now leads the nation in job growth." It's simply not true. If you look at the Clinton decade, the decade of the eighties, which because of the census being taken in ten year segments we have good Census Bureau data on the 1980s, if you compare the eighties to the seventies, before Gov. Clinton became governor, there's been a decline in job growth. In the 1970's employment in Arkansas increased 22.8 percent. During the Clinton decade of the eighties, employment increased just 13.4 percent. More importantly, during the eighties, the Clinton decade, job growth in Arkansas was slower than the national average, the national average being 17 1/2 percent, and again the Clinton decade average in Arkansas being 13.4 percent. It's simply a false claim. Secondly, Arkansas incomes are rising at twice the national rate; not true. During the Clinton decade, the decade of the eighties, personal income growth in Arkansas was 11 percent lower than the national average, according to the Census Bureau. Disposable personal income was 14 percent lower during this decade. If you look at other measures, like wages, average hourly earnings in Arkansas manufacturing jobs in 1980 were 78.5 percent of the national average. In 1989, at the end of the Clinton decade, the same percentage. They haven't increased a bit. There's no doubt that Arkansas under Bill Clinton is a low wage, low tech economy which has not kept pace with the national growth during his years as governor. To move on to the next point, the ad says that under Gov. Clinton 17,000 people have moved from welfare to work. The cold facts are that since Gov. Clinton's welfare reform proposal passed, welfare caseload has increased 12 percent in Arkansas, in addition to which the welfare bureaucracy, the administrative costs of welfare administration in Arkansas have ballooned 3,000 percent. In the case of his highly vaunted welfare program, U.S. News & World Report concluded that Clinton's Arkansas welfare programs "aren't as great as he claims." I have more. Stop me when you're ready.

MR. LEHRER: All right. Well, let's stop there, because -- and then we'll go to the second part of what you object to, which is the eight million jobs and et cetera --

MR. BLACK: Yes.

MR. LEHRER: -- and the new thing. George Stephanopoulos, go through this. You heard what Charles Black said. On creating jobs, it was 13.4 percent in Arkansas, 17.5 percent nationally, just the opposite of what that ad claims.

MR. STEPHANOPOULOS: Well, that's not the opposite of what the ad claims. It says that Arkansas leads the nation in job growth. And this year, Arkansas leads the nation in jobgrowth according to Bush's own Bureau of Labor Statistics. It's a simple fact. You know, there's no question that when Bill Clinton became governor of Arkansas, it was a poor state. But the important point is that every year during the 1980s, and on into the '90s, they've made progress. And that's what you're seeing in Arkansas now on jobs. They've created -- they led the nation in job growth this year. More importantly, since 1989, since Bush has been in office, there have been more private sector jobs created in Arkansas, 90,000 jobs, than in the whole United States under George Bush. Bush promised 30 million jobs in eight years and he's delivered less than a million and less than 90,000 in the private sector. Arkansas -- let me repeat that -- Arkansas in the last three and a half years has created more private sector jobs than the whole United States.

MR. LEHRER: But on the specific thing then, what you're saying is that -- that the 13.4 percent figure saying it's a higher growth rate than the rest of the country, you're talking about right now, not -- you didn't go back over the whole eighties, the way Charles Black did, right?

MR. STEPHANOPOULOS: No. Charles took a different number and I can't dispute --

MR. LEHRER: Okay.

MR. STEPHANOPOULOS: -- the fact that during the 1980's we started out slowly. Arkansas was a poor state and every year they've made progress.

MR. LEHRER: Do you dispute --

MR. STEPHANOPOULOS: In the last three and a half years, Arkansas has made good progress, better than the rest of the United States.

MR. LEHRER: Do you dispute that, Mr. Black?

MR. BLACK: I haven't looked at that figure, but Bill Clinton's been governor for 12 years. I think you have to look at the overall record and the most readily available figures to us were the eighties. And if you want to talk about what's happened in Arkansas this year, the credit ought to go to lieutenant governor Jim Guy Tucker who's been running the state while Gov. Clinton's been out campaigning. Look, the fact is that today -- today Arkansas is 49th in per capita in household income, 50th in workplace safety, 48th in the number of adults with high school diplomas, 50th in expenditures for state and local law enforcement. So Gov. Clinton took a state that had big problems, just as George said. He's been governor for 12 years and he's taken it nowhere.

MR. LEHRER: But in this particular case, it's possible that both of you are right as far as on the growth in jobs, correct?

MR. BLACK: Well, it's possible, but --

MR. LEHRER: Because if you use his figures, George Stephanopoulos, would you agree with that, that it's possible that what Charles Black is saying may be right if you take all the eighties, no?

MR. STEPHANOPOULOS: I can't dispute that. My point is that we're making progress.

MR. LEHRER: Okay.

MR. STEPHANOPOULOS: I would like to make one additional point though. Earlier in your broadcast, you talked about income growth. And we noted that for the first time since 1982, income in the United States is below the rate of inflation, the lowest rate in 30 years. What Charlie wouldn't tell you, what your broadcast didn't say, is that Arkansas is in the top six states in income growth as just reported by the Department of Commerce today. So while the whole United States is going down, Arkansas is moving in the right direction. And that has a lot to do with Bill Clinton's policies.

MR. LEHRER: Mr. Black.

MR. BLACK: Well, again, he can take a lot of figures from a short period of time. If he's taking one year out of the twelve years that Gov. Clinton has been governor, that's the equivalent to taking three months of the four years that George Bush has been President and comparing it. I'll do that. I'll pick the three months immediately preceding and following Operation Desert Shield and Desert Storm and we'll have some comparison on things. But, look, you have to look at the full record. He took a state that had big problems, that was behind in every measure. It's still behind in every meaningful measure today.

MR. LEHRER: Yeah.

MR. STEPHANOPOULOS: As far as I'm concerned, let's compare apples and apples. Since George Bush has been in office, the United States has created less than 90,000 private sector jobs. Arkansas has created 90,000 private sector jobs. Arkansas, one state, has created more private sector jobs than the whole United States under George Bush.

MR. BLACK: You ought to send Sen. Gore up to the Hill to pass the President's economic growth package, which has been languishing there since January, and we'd have hundreds of thousands of new jobs today if they'd passed it early this year.

MR. LEHRER: Do you dispute what Mr. Stephanopoulos just said, the 90,000 claim that's been made several times by people in the Clinton camp?

MR. BLACK: Well, I haven't looked at that figure specifically so, therefore, I do not dispute it. But let's say that arguendo I conceded. It took him 11 years to get warmed up for this great spurt of economic growth. America doesn't have 11 years for him to increase taxes, increase spending, groping for a way to move the economy.

MR. LEHRER: Okay. Let's go to the second complaint you have in that commercial, and that speaks about the 8 million new jobs in the next four years. You tell me what your problem with that is.

MR. BLACK: Well, the problem is that if it's based on Gov. Clinton's economic plan, in fact, that economic plan when implemented would immediately lose jobs. It would lose about 2.6 million jobs. The additional defense cuts, we are in the middle of a 25 percent down sizing of the military which the President has worked out. Gov. Clinton wants to cut an extra $60 billion from defense. That would cost an additional 1 million jobs in defense. His "pay or play" health care proposal requiring a 7 to 9 percent payroll tax on small businesses -- and by the way it's a tax on everybody in America who has a job -- the "pay or play" health care plan and the tremendous burden it would put on small business is estimated to cost 700,000 jobs. Business tax increases included in his 150 billion dollar tax increase would cost another 300,000 jobs. The 1.5 percent payroll tax for job training, another 300,000 jobs; and the extreme cafe standards that Gov. Clinton and Sen. Gore want to impose on the automobile industry --

MR. LEHRER: Automobile mileage.

MR. BLACK: -- automobile mileage, increasing those standards, a tremendous demand on the American auto industry that experts say would cost at least 300,000 jobs. So if he became President and if you passed his program, you'd be 2.6 million jobs less just based on that economic plan, not more jobs.

MR. LEHRER: All right. Where does the 8 million figure then come from, Mr. Stephanopoulos?

MR. STEPHANOPOULOS: It comes from a modest projection of economic growth from CBO and the Bureau of Labor Statistics.

MR. LEHRER: That's the Congressional Budget Office.

MR. STEPHANOPOULOS: Congressional Budget Office, I'm sorry.

MR. LEHRER: Right.

MR. STEPHANOPOULOS: And the Bureau of Labor Statistics.

MR. LEHRER: Okay.

MR. STEPHANOPOULOS: Based on the investments that Gov.Clinton's plan calls for in infrastructure, roads, and highways, in health care, in education and training. Only a devotee of trickle down economics, like Charles Black and George Bush, would say that investing in job training, education, health care, to bring health care costs down, is going to cost jobs. We think this is a very modest projection. Remember, four years ago, George Bush promised 30 million jobs in eight years. He should have made 15 million by now and he's well over 1 million jobs short. You can't trust their claims on jobs.

MR. LEHRER: Well, what about the figures that he just went through, that the cuts in defense, the increases in payroll tax, total would be -- in other words, there would be a negative loss, I mean, a loss of 2.6 million jobs, rather than an increase in 8 million?

MR. STEPHANOPOULOS: Well, it just doesn't make sense. First of all, on defense, Gov. Clinton will spend 95 percent of what George Bush spends over the next five years, plus he has a defense conversion plan to make sure that the defense workers who are thrown out of their jobs through defense cuts are retrained for better jobs in the future. On health care, right now we're losing jobs because health care costs are driving the cost of our products through the roof. By having a real health care plan that takes on the insurance companies and brings costs down, it'll make our companies more competitive and it'll cost less over the long run. Right now, American companies are spending well over 8 percent of their income on health care costs. This will make America more competitive. Finally, on education and training, every single reputable economic study agrees that by investing in training, you make sure you'll have more high wage, high growth jobs in the future, the kind of jobs that we have in Germany and Japan. That will also come with investing in environmental technology and environmental jobs. They're just living in the past. They don't understand that investing in jobs, education, and health care will create jobs.

MR. LEHRER: Mr. Black.

MR. BLACK: Only a devotee of big government would believe that more taxes, more spending, more deficits is going to create jobs. Most people understand that 7 to 9 percent payroll tax on small business, plus the fact that the 150 billion dollars in increased taxes the governor proposes mostly falls on small business, that crippling small business, which produces most of the jobs in this country, is not a way to create jobs. There's no one who believes more deficits will help the economy. Our history tells us that when the President struggled to get Congress to reduce the deficit and Congress refused, it hurt the economy. It fed the recession that we were already in. We need to move toward a balanced budget, reduce the deficit. We need to spur economic growth with tax cuts and spending cuts just like President Bush proposed. Nobody in the American public bought more taxes and more spending when Gov. Dukakis proposed it or Vice President Mondale proposed it. And they're not going to buy it from Gov. Clinton once they understand the two clear paths that these candidates want to lead America.

MR. LEHRER: On this 8 million jobs claim that you take objection to, is that more a -- just a difference in approach and philosophy than it is a distortion, or do you think that is -- that that is an out and out distortion of the facts, that Gov. Clinton and George Stephanopoulos and their campaign is up to?

MR. BLACK: There's nothing in American economic history that indicates that increased taxes, increasedspending and increased deficits creates new jobs. In fact, history is just to the contrary. So we think it's a distortion.

MR. LEHRER: But the -- the Stephanopoulos argument that we just heard, that when you invest in job training and you do retraining for people who are going to lose defense jobs, you just reject that?

MR. BLACK: But you've lost a million defense jobs, so retraining people, which the President unveiled an excellent job training program just last week, which I hope he will get congressional support on, job training doesn't do any good if the jobs aren't there, because small businesses went broke from the heavy payroll tax increases that Gov. Clinton wants to put on it.

MR. LEHRER: Mr. Stephanopoulos.

MR. STEPHANOPOULOS: Well, I think it basically is a difference in approach. What we're hearing from Charlie Black tonight is bring back Reaganomics. He talks about deficits. The deficit has doubled under George Bush. It's quadrupled since Ronald Reagan took office. They've created the largest deficits in American history. And they're lecturing us about deficits? Gov. Clinton has a plan to bring it down. Look what happened in Japan last week. They face a problem, a crisis in investment. And what they did was invest in infrastructure, invest in training, and they could afford to do it because they could hold their deficits down. America under Reagan and Bush can't afford to do that right now. Our roads and bridges are crumbling. Our education system is falling apart. And health care costs are out of control. And all they say is bring back the past, bring us back to what we did in 1981, which got us into this mess. It just doesn't make sense.

MR. LEHRER: In simple terms, is he right, Mr. Stephanopoulos, is that really the Bush/Quayle message, let's do again what was done in 1981 under Ronald Reagan and George Bush, cut taxes and that will --

MR. BLACK: What we proved in 1981 is that tax cuts provide economic incentives and stimulate the economy, create growth, and create jobs. What President Reagan was not able to accomplish with mostly Democratic Congresses and President Bush has not been able to accomplish with a totally partisan Democratic Congress, is spending reduction and deficit reduction. This President has put a premium on that. He fought tooth and nail for the balanced budget amendment which would force both parties to move toward a balanced budget and provide the fiscal discipline. And, again, the Democrats defeated it. He -- in the biggest sacrifice he made politically in his career, the now famous tax increase that he agreed to in 1990, because the Democrats held spending cuts hostage, it was for half a trillion dollars in spending cuts and deficit reduction that the President agreed grudgingly to go along with that tax increase. He has vetoed spending bills that exceeded the appropriations he thought were appropriate. He's vetoed tax increases by the Democrats. His record could not be more clear. George Bush is for tax cuts and spending cuts. Bill Clinton is for tax increases and spending increases. And the history of our economy in modern times bears out the President's approach.

MR. LEHRER: Is that -- is that fair, George Stephanopoulos?

MR. STEPHANOPOULOS: Not in the least. President Bush never submitted a balanced budget. He talks about balanced budget amendment, but every single year Congress appropriated less money than the budget that President Bush submitted. He's been the greatest spender since Lyndon Johnson. I mean, those are the facts. The Republicans talk about lower taxes. They talk about lower spending. They talk about smaller government. But for the last ten, twelve years, they've brought higher taxes, higher spending, and more big government. They have a record to run on. It's the record of the last 12 years, and it's a failed record.

MR. LEHRER: All right. So, in summary, on this, gentlemen, before we go, you, at the -- at the Clinton/Gore campaign are going to continue to run that commercial, continue to make the point -- the claims about Arkansas and the 8 million new jobs, is that correct?

MR. STEPHANOPOULOS: Absolutely.

MR. LEHRER: And you're going to continue to complain about it and say it's a distortion?

MR. BLACK: We'll continue to make sure the American people understand that the choice is President Bush's tax cuts and spending cuts versus Bill Clinton's tax increases, spending increases, and increased deficits, and maybe the next distortion we'll be able to take up on this show will be the question of whether Gov. Clinton has truly set the record straight about his draft activities in 1968.

MR. LEHRER: Is that -- is that a fair subject for one of these discussions, Mr. Stephanopoulos?

MR. STEPHANOPOULOS: Gov. Clinton has said all he has to say about that. He has set the record straight. He's laid it out for the American people and I think they'll decide.

MR. LEHRER: Okay. Well, why don't we talk about that, if not next week, one of these things, because that issue did come up again today, as you know, Mr. Stephanopoulos and Mr. Black. And we will go through it. Gentlemen, thank you very much --

MR. STEPHANOPOULOS: Thank you, Jim.

MR. LEHRER: -- for going through all of this with us and we look forward to doing it again.

MR. BLACK: Thanks a lot. FOCUS - PURGING THE RANKS

MR. MacNeil: Finally tonight, another issue that divides the two Presidential candidates as much as any in the campaign, whether gays should be allowed to join and remain in the Clinton. Clinton says yes. Bush says no. Time Magazine's national security correspondent Bruce Van Voorst explores the topic in this documentary report.

MR. VAN VOORST: In the movie "Top Gun" Tom Cruise played a hot shot navy pilot, the best of the navy's aviators, known as "top guns." The film showed what superb dog fighters they are in the air and unabashed lady killers on the ground. Cruise's image was a full-blooded, all American boy, macho all the way. Twenty-five-year old Navy Lt. Tracy Thorne of West Palm Beach, Florida was among the real life top guns. A bombardier navigator on an A-6 intruder attack aircraft, Tracy Thorne finished first in his class at flight school, the top gun. One fellow officer picked Thorne as a sure thing for admiral, until, i.e., Lt. Thorne went on "Nightline" to tell the world that he's homosexual.

LT. [J.G.] TRACY THORNE, U.S. Navy: What I'm trying to do is show people that you can be gay, you can do your job, and your friends, you know, fellow officers in the Navy have no problem, people that I've come out to have no problem with my homosexuality.

MR. VAN VOORST: Lt. Thorne described the agony of going public about his homosexuality.

LT. TRACY THORNE: A few months ago I was sitting on top of the world. I was planning and executing strikes daily against targets and delivering ordinance. Now I'm grounded, sitting at my desk, awaiting my legal battle. My career's in deep jeopardy, not from something that I have done, nor something that I want to do, but for the way I was born. The military says homosexuals lack the capacity to lead, that they destroy unit cohesiveness, take away privacyrights of others. I say being gay has absolutely nothing to do with leadership, unit cohesiveness or privacy. It's just a small part of your overall being, like whether your eyes are blue or brown.

MR. VAN VOORST: But not in the eyes of the U.S. Navy. For the Navy, the sole issue was his homosexuality. Not surprisingly, since Lt. Thorne was not denying his homosexuality, a board of inquiry recommended his separation. In another such case, Army Col. Margarethe Cammermeyer, a nurse who won a bronze star in Vietnam, was forced to resign after revealing she is a lesbian.

COL. MARGARETHE CAMMERMEYER: There are two sad parts of my experience I think in the military. One was that while I was in Vietnam that I wasn't able to save all of the soldiers in my care. And the second is that I was not able to make enough of a difference to facilitate the overturning of the ban against homosexuals in the military.

MR. VAN VOORST: Homosexuals serve without discrimination in all other U.S. government agencies, including the Department of State and the super secret Central Intelligence Agency. Gays and lesbians are also allowed to serve alongside the more than 1 million civilians in the Department of Defense. Now, for the first time, the policy of automatically expelling gays and lesbians from the uniformed military services is an open issue in this Presidential election campaign.

REPORTER: If you become President, do you plan to revoke the U.S. military longstanding ban on gay and lesbians who want to serve their country? [applause]

BILL CLINTON: Here's where I'm coming from on this issue. I believe we don't have a person to waste in America. We need all of you.

MR. VAN VOORST: President Bush, who said he would not bar homosexuals from his cabinet, nonetheless, defends the uniform military's ban on homosexuals.

PRESIDENT BUSH: I do support our policy in the military. And I will continue to support it.

BARBARA WALTERS: [20/20] Banning homosexuals?

PRESIDENT BUSH: Yes. I will continue to support it. It's been that way through history and I accept the recommendation of the professionals that make that recommendation to the President.

MR. VAN VOORST: Chairman of the Joint Chiefs of Staff, Gen. Colin Powell, explained the rationale for the current policy.

GEN. COLIN POWELL, Chairman, Joint Chiefs of Staff: It's difficult in a military setting where there is no privacy, where you don't get choice of association, where you don't get choice of where you live, to introduce a group of individuals who -- proud, brave, loyal good Americans, but who favor a homosexual lifestyle. And I think it would be prejudicial to good order and discipline to try to integrate that into the current military structure.

MR. VAN VOORST: For a look at the impact on good order and discipline in practice, we visited the officers and crews of the U.S.S. Scott, a destroyer cruising in the Atlantic Ocean off Virginia. Lt. Rick Mullen from Colorado Springs, Colorado, was officer of the deck.

LT. RICK MULLEN, U.S. Navy: Homosexuality is such a volatile subject and there are -- most people are not ambivalent. It's either hot or cold. You either say, yeah, that's great, I think we should support them totally, or no way, that's not natural, it shouldn't be happening. And so with -- with such strong opinions being expressed on both sides of the fence, it's hard to get a middle ground and there's just a lot of mutual antagonism as a result of that.

MR. VAN VOORST: Opinions on the ship indeed varied greatly. We talked to three enlisted personnel on the mess desk. Seaman Patrick Laird, 23 of Detroit Michigan, saw no problem if homosexuals are professionally competent.

PATRICK LAIRD, U.S. Navy: Ship policy, Navy policy is no homosexuals. My personal opinion is if a person can do the job, then they should be able to do the job. If they're capable people, they can do the job, then like I said, a person that's working on your car, you know, you're not going to take a car if someone is a homosexual, saying that he's not going to be able to fix your car. And that's discrimination.

MR. VAN VOORST: Petty Officer David Hopkins, 22 of Three Lakes, Wisconsin, isn't so sure.

DAVID HOPKINS, U.S. Navy: I don't think a homosexual can relate to the rest of the crew. I think there'd be conflict there because most of the crew isn't ready to accept something like that.

MR. VAN VOORST: Many sailors we talked to accepted homosexuals who do their job, but were uncomfortable with gays or lesbians who flaunt their views. Petty Officer William Biles, 23 of Cleveland, Ohio.

WILLIAM BILES, U.S. Navy: I don't really care if, you know, he's a homosexual, just as long as he's doin' his job, he don't present himself to me or his shipmates sayin' hey, I'm a homosexual, could you do this and that with me.

MR. VAN VOORST: Four radar operators took a much harder line against gays and lesbians. Operations Specialist Greg Hazlett, 23 of Johns Town, Pennsylvania, argues that a ship is just too small and homosexuals too unreliable.

GREG HAZLETT, U.S. Navy: My feeling is that on this ship or any ship there's no place for it just because the quarters are cramped, spaces are small, and I mean, you know, we're a war ship. How could you go to war, sitting there getting ready to shoot a missile, knowing that the man in charge of you or maybe the man that's going to pull the -- pull the trigger, his thoughts are elsewhere.

MR. VAN VOORST: Now it's your assertion that his thoughts are elsewhere. Why do you think they are elsewhere?

GREG HAZLETT: You never know. I mean, it's the same -- it's the same thought if there is a murderer around. You know, do you know if he's going to murder you any time, no. You know, if you have a homosexual, you never know where his thoughts are, especially down in a berth, things, they don't let men and women together, just for the simple fact that that's going to cause problems. If they leave men and men together, you know, I wouldn't feel comfortable sleeping, you know, with a guy who's a homosexual three feet above me or three feet below me, or going to take a shower knowing that, you know, there's homosexuals around.

MR. VAN VOORST: Operations Specialist John Hall, 21, a three-year Navy man from Cincinnati, Ohio, agrees.

JOHN HALL, U.S. Navy: To me, there is no place for 'em here either. To my opinion, it's totally immoral. It's undignified. Now, if they started letting them into our Navy, I mean, you can tell a homosexual nine times out of ten from someone else, from maybe the way they act or their beliefs. You're going to know that they're a homosexual.

MR. VAN VOORST: Reminded that Tracy Thorne and many of the other homosexuals who have left the services were exceptional officers and enlisted personnel, the quartet insisted that professionalism wasn't enough. Operation Specialist Jason Mottner, 21, a three-year Navy veteran from Ft. Lauderdale, Florida.

JASON MOTTNER, U.S. Navy: I think it's not a question of their ability. It's a question of the people around them, and their abilities, and if say the person made an announcement they're a homosexual, that'll affect the other people's jobs around that person.

MR. VAN VOORST: Why?

JOHN HALL: I'm sure that they're just like any other human being in the competence and incompetence level. I'm sure like we have people in here that are incompetent to do their job, or they can do their job the best of anybody here, and I'm sure they're no different than anybody else, but we're talking about morals here. It's just undignified.

MR. VAN VOORST: Do all four of you agree that if homosexuals are allowed in the Navy you'd want to leave the Navy?

ALL FOUR IN UNISON: Definitely.

MR. VAN VOORST: All four. But Lt. Tracy Thorne says such fears are unwarranted. He makes a distinction between sexual proclivity and conduct.

LT. TRACY THORNE: I've lived aboard ship and I can control my sexuality. Gays are not sexual predators, with some kind of hormonal over drive. We're just as in control of our sexuality as any heterosexual. Sexual misconduct is not and should not be tolerated in the U.S. armed forces, nor anywhere.

MR. VAN VOORST: A growing chorus of critics argues that this policy of automatically expelling gays and lesbians from the military is no longer consistent with contemporary American society. Two sitting members of Congress are openly gay. In one poll, 80 percent of the respondents said that they thought lesbians and gays should be allowed in all tasks. 60 percent said of these said this should include the military as well. In a recent major development, the unofficial newspapers of the military services, the Air Force Times and the Army Times, publicly favored lifting the ban. "Discrimination based on sexual preference is no more legitimate than that based on race, gender, or religion." In the past, the military argued that homosexuals were a security threat because they might be blackmailed into spying by foreign intelligence services. The Pentagon has now dropped the security argument.

DICK CHENEY, Secretary of Defense: There have been times in the past when it's been generated on the notion that somehow there was a security risk involved, although I must say I think that's a bit of an old chestnut, that the question turns more upon the need of the Department to maintain the combat effectiveness of our military units.

MR. VAN VOORST: Critics say that that judgment, in turn, sounds much like the arguments once used against black Americans and women. In 1942, senior Navy officers wrote to the Secretary of the Navy. "How many white men would choose of their own accord that their closest associates in sleeping quarters, at mess, and in a gun's crew should be of another race -- if the issue were forced, there would be a lowering of contentment, teamwork, and discipline in the service." President Truman ended that policy with a stroke of a pen in 1948, successfully integrating the forces with far less conflict than was widely expected. Subsequently, women, long discriminated against, have been playing an increasingly important role in the military. Homosexuals remain the exception. The General Accounting Office has just completed the only major independent study of the military's policy on homosexuality. Paul Jones headed the team.

PAUL JONES, General Accounting Office: DOD is implementing its policy. They're expelling several thousand men and women per year based on their sexual preference, i.e. homosexual preference. It's costing 'em money. We found in 1990 it cost 'em about 27 million just in training and recruiting costs. We found there's no empirical data to support that policy.

MR. VAN VOORST: Tanya Domi was a successful Army captain destined fora senior teaching position at West Point when the service forced her out because she is a lesbian.

TANYA DOMI, Former Army Captain: The fact of the matter is that gays and lesbians have always served in the military. They have always been there, despite the policy. And what we are saying is, let us serve with dignity and privacy. Just allow us to lead our lives and serve our country like any other American.

MR. VAN VOORST: President Bush supports the ban on homosexuals. Gov. Clinton would drop it. For Tracy Thorne and other gay men and women who want to serve their country in the military, as well as for those persons who would keep them out, the November vote will be crucial. RECAP

MR. MacNeil: Again, the main stories of this Wednesday, President Bush announced a billion dollar package of farm subsidies to stimulate U.S. wheat sales abroad. He also said the federal government would provide more than 750 million dollars to farmers suffering losses from Hurricane Andrew. At least 52 people died and thousands were left homeless after a tidal wave hit the Pacific Coast of Nicaragua. Good night, Jim.

MR. LEHRER: Good night, Robin. We'll see you tomorrow night with a look at progress in the Middle East Peace talks. I'm Jim Lehrer. Thank you and good night.