The MacNeil/Lehrer NewsHour

INTRO

ROBERT MacNEIL: Good evening. The psychological warfare between the U.S. and Nicaragua heated up today. Sonic booms over Nicaraguan cities panicked civilians there. Education Secretary Terrel Bell announced his resignation. The space shuttle Discovery had a successful launch. Israel began troop withdrawal talks with Lebanon. Jim?

JIM LEHRER: First tonight, as is our new custom, we will summarize the news of the day. Then two major focus sections on what the United States should do if and when MIG-21s do come to Nicaragua, and on postelection affairs in Washington as seen from the White House by Chief of Staff James Baker in an interview with Judy Woodruff, and by Congress as interpreted by Norman Ornstein. Finally, a newsmaker interview with Education Secretary Bell, who announced his resignation today.

The lead story in our news summary tonight is Nicaragua nd the Russian fighters. The Nicaraguan government today claimed U.S. warships, aircraft and speedboats violated their national territory in shadowing the mysterious Soviet freighter. U.S. officials say the freighter may have had Soviet MIG-21 fighter planes aboard. The Sandinista government denies that. John Simpson of the BBC reports from Micaragua.

JOHN SIMPSON, BBC [voice-over]: It's turned into a waiting game at Corinto. One of the Soviet ships moves out briefly to sea, shadowed by Nicaraguan gunboats, more as a token of protection than a genuine deterrent. When an American C-130 plane overflew the port yesterday, this anti-aircraft gun fired off powerlessly at it. The first Soviet ship has now been unloaded and the crates taken off her have been driven away by the Nicaraguan military. Out at sea the first American frigate to arrive on station waits, hovering on Nicaragua's 12-mile limit. In the sky above Managua, meanwhile, an elderly jet trainer, one of the handful the Nicaraguans have at present. Miles higher, an American spy plane overflew the city this morning.

[on camera] In the last couple of hours, the head of the Nicaraguan junta, Daniel Ortega, made his first public statement since the crisis began. He told us in an interview that Nicaragua was calling an emergency meeting of the U.N. Security Council. When I asked him if there were Soviet helicopters or other arms supplies on the two Russian ships at Carinto, he didn't answer directly but he did say that what was on the ships was a normal cargo from the Soviet Union. I asked him if the Russians would become involved if the Americans invaded Nicaragua.

[voice-over] His reply was that help from other countries in terms of troops wasn't something they expected or was necessary.They had enough people to fight. What they needed were weapons. And he said they'd turn to anywhere to get them.

[interviewing] Is it possible for Nicaragua to resist an American invasion?

[voice-over] They were, he said, prepared to face one and to defeat it. The resistance wouldn't just come from Nicaragua alone but from the whole of Central America.

Military transports head through the streets of Managua after ferrying troops to their deployment areas. Daniel Ortega and his colleagues in the junta say they're worried that the Americans should be presenting them as hostile and belligerent. Everything they are doing, they maintain, is purely defensive. Now it's a matter of waiting to see if their defenses are put to the test.

LEHRER: State Department spokesman John Hughes gave the U.S. view of it today.

JOHN HUGHES, State Department spokesman: We are paying close attention overall to the possibility that MIGs or other high-performance aircraft might be delivered. We do not think the presence of high-speed aircraft delivered to a regime of that character, given its activities and its proven record of subversion outside its own borders in the area -- we do not consider that to be in the national interests of the United States or in the interests of other countries in the area.

LEHRER: Our first focus segment later in the program is on the Nicaraguan-Soviet MIG story. Also in the Latin America part of the world today, the military government of Chile outlawed most political meetings and banned six opposition political magazines, among new steps in its imposition of a 90-day state of siege. President Augusto Pinochet took the action Tuesday, claiming it was needed to thwart a Marxist-led insurrection. Robin?

MacNEIL: In a small town in Lebanon today, Israeli and Lebanese military officers began talks on ending Israel's two-year occupation of southern Lebanon.They met under heavy guard, mounted by United Nations troops in the town of Naqura on the Lebanese-Israeli border. The two delegations faced each other from separate tables arranged as two sides of a triangle, the U.N. occupying the third. They talked for three hours, and Israeli sources said they disagreed on how to fill the vacuum in southern Lebanon after the Israeli forces withdraw. Israel wants an Israeli-supported militia in part of the area, and Lebanon wants its own army to patrol it. The two sides did agree to meet for substantive talks on Monday. Israeli Prime Minister Shimon Peres visited Israeli positions in eastern Lebanon today. He told soldiers, "It's good that we're now talking with the Lebanese, but I cannot promise an early withdrawal, although we should know more about it in a few weeks." Jim?

LEHRER: Back in this country, Thesday's election triggered its first Cabinet resignation today. Secretary of Education Terrel Bell said he would not be on board in January for a second Reagan term. He said he would return to his home state of Utah and return to teaching.

TERREL BELL, Secretary of Education: It's been an exciting four years. I think Winston Churchill was the first one to use the term "a splendid misery." But it's been more splendid than misery, and I've enjoyed very much being the secretary of education. I've appreciated the remarkable success that we've had in our efforts to try to get American education turned around and striving to attain even higher levels of excellence.

LEHRER: Secretary Bell will be with us in person later in the program to tell us more about his decision and the reasons behind it. Robin?

MacNEIL: The space shuttle called Discovery was launched today, 23 hours behind schedule but with no last-minute hitches. Here's how it went from the last few seconds of the countdown.

VOICE: Fourteen, 13, 12, 11, 10, we are go for main engine starts, seven, six, we have main engine start, three, two, one, and liftoff, liftoff of Discovery and the first flight to retrieve and return satellites from space, and the shuttle has cleared the tower.

2nd VOICE: Houston now controlling. Program completed.

MacNEIL: Scientists at Columbia University today announced a discovery that may have major implications for the treatment of addictions like smoking and alcoholism. The researchers studied a group of 15 heavy smokers and they found that a commonly used blood-pressure drug called Clonidine was able to suppress their craving for cigarettes. Doctors say the same type of drug has also been effective in quelling withdrawal symptoms from alcohol and opiates. This afternoon Dr. Alexander Glassman, head of the Columbia research team, told our reporter Susan Ades why the finding is important.

Dr. ALEXANDER GLASSMAN, Columbia University: What we feel is important about this observation is not just that we can suppress the withdrawal syndrome from cigarette smoking, but that we're able to pinpoint a relatively limited area of the brain that seems to play a major role in craving across alcoholism, narcotics addiction and cigarette smoking. I would hope that we could look at that part of the brain and learn more about the way people become addicted, that this may turn out to be a reasonable treatment for addiction. But if we understand what governs craving, whether it's craving for opiates or craving for food, whatever that is, the understanding gives us the opportunity of being able to control it even better.

MacNEIL: Dr. Glassman, whose study was co-sponsored by Columbia University and the New York State Psychiatric Institute, cautioned that much more research is needed to determine whether that drug, Clonidine, will be an effective treatment for smoking addiction.

In another field of medicine, Dr. William DeVries, the man who implanted the first artificial heart in a human being two years ago, said his new hospital has been authorized as a location for further implants. Dr. DeVries said several patients are being considered for implants at Humana Hospital Audubon in Louisville, Kentucky. Jim?

LEHRER: Our final item in the news summary tonight is one of economics. The U.S. trade deficit for the three months ending in September hit a record $33.3 billion, the Commerce Department said today. It's the high value of the dollar abroad that causes the deficit to continue to grow. Also today, the White House issued its regular economic forecast. Inflation will remain under control while the economy grows at a rate of 4% a year through 1988, is what the forecast said. And that is the end of the news summary. Next, our focus section. Nicaraguan Controversy -- U.S. Options?

MacNEIL: We devote our principal focus section tonight to the latest source of tension between the Reagan administration and the Sandinista government in Nicaragua. It's the controversy over a shipment to Nicaragua in a Soviet vessel of a cargo Washington feared might be MIG fighter planes. Yesterday President Reagan said he didn't know what was in the shipment, but it would be a serious matter if the Sandinistas were importing high-performance warplanes. Tonight we look at why the Soviets might want to send such planes and how Washington should respond if they do. We begin with the background to the present situation by our special Latin American correspondent Charles Krause.

CHARLES KRAUSE: Robin, at issue are boxes aboard a Soviet freighter now unloading in Nicaragua. The Reagan administration says the boxes are like those used to carry Soviet MIG fighters, but the administration admits it doesn't know what's inside the boxes that are now being unloaded. Nonetheless, the administration has repeatedly warned Nicaragua not to go ahead with its plans to acquire jet fighters.

[voice-over] Beginning in 1981, the Reagan administration warned against Nicaragua's military buildup.Specifically, the administration made clear its opposition to Nicaragua's plans to obtain advanced jet fighters. Washington says it fears the planes could be used against Nicaragua's neighbors, Honduras, Costa Rica and El Salvador, countries friendly to the United States. Yesterday President Reagan repeated his concerns.

Pres. RONALD REAGAN: For them to bring something that is absolutely unnecessary to them, these high-performance craft in here, indicates that they are contemplating being a threat to their neighbors here in the Americas.

KRAUSE [voice-over]: For its part, Nicaragua says President Reagan's worry is misplaced: there are no advanced fighters in Nicaragua or en route. Carlos Tunnermann is Nicaragua's ambassador to Washington.

CARLOS TUNERMAN, Nicaraguan Ambassador to the U.S.: The government of Nicaragua categorically states that it is absolutely false that ships of any nationality are bringing MIGs or any advanced combat aircraft to Nicaraguan ports.

KRAUSE [voice-over]: U.S. concerns began weeks ago when suspicious crates were loaded on the Soviet freighter at the Black Sea port of Odessa. American intelligence tracked the vessel, which avoided inspection at the Panama Canal. The freighter took the long way around Cape Horn to reach the Nicaraguan port of Corinto. Nicaragua's defense minister, Humberto Ortega, has made no secret of his desire to buy top-of-the-line jet fighters.He even made a shopping trip to the Soviet Union last year. The Sandinistas are building a major airfield at Punta Hueta. The base 20 miles from the capital will have a runway long enough to handle any plane now made by the Soviet Union. MIG-21s operating from Punta Hueta could hit targets in El Salvador and Honduras.

Nicaragua's official statements denying that the mystery boxes contain MIG jets have not eased concerns at the Pentagon or the White House. If the boxes do not hold MIG fighters, U.S. officials suggest they may contain new Soviet helicopters like this one. The Sandinistas are already using these helicopters as troop carriers and gunships in their battle against the contras. Yesterday State Department spokesman John Hughes would not talk about how the U.S. would respond if it discovered the mystery crate contained helicopters.

Mr. HUGHES: The Soviet Union and Nicaragua are aware of the gravity of the statements we have made hitherto and have again made recently, and those statements are there to be listened to carefully, but I'm not going to go beyond that and talk about response.

LEHRER: What would be a proper response for the United States if it does turn out there are MIG-21 fighter planes in Nicaragua now or any other time? We explore that now with two members of Congress who see it differently. They are Congressman Henry Hyde, Republican of Illinois, a member of the House Western Hemisphere Subcommittee, and Congressman James Shannon, Democrat of Massachusetts, who just returned from a three-day visit to Nicaragua which included talks with Sandinista leaders. He joins us tonight from the studios of public station WGBH in Boston. Starting with you, Congressman Shannon, first, can you add anything as to what is in those boxes? Do you know? Did you ask them about them when you were there?

Rep. JAMES SHANNON: Well, no, this story really broke after I got back from Nicaragua. Of course, there had been talk, when an earlier ship landed at El Bluff, that there might be these kind of aircraft being unloaded from that ship, and I did ask about that, but they said that the El Bluff ship didn't contain any of that kind of material. And as a matter of fact, I think that American officials in Nicaragua, in speaking to other Americans, indicated that they weren't so concerned about the previous ship. So I didn't have a chance to directly ask the Sandinistas about this particular shipment that's caused concern in the last couple of days.

LEHRER: Did you have any conversation about the general issue of their desire to have MIG fighters like these?

Rep. SHANNON: Oh, yes, I did, both last week and when I was there last year. And I think virtually every American official who goes to Nicaragua, whether they are critics of the Reagan administration policy or supporters of it, make it clear to the Sandinistas that if they go beyond a certain point -- and certainly, introduction of MIGs into Nicaragua would be that point -- they're going to run into serious problems with the United States, and have urged them not to do anything that would create a situation where the United States would feel the need to take any action.

LEHRER: Congressman Hyde, do you have any information about whether those fighters are there or not?

Rep. HENRY HYDE: The latest information I have, which is this afternoon, is that we don't know yet. The crates are there, the ship is there; some unloading has gone on.But we are unable to tell whether any MIGs are there or not.

LEHRER: Well, let's go to the central issue. If there are MIGs there now or some other time, how serious -- the President says this would be a serious matter to the United States. How serious a matter should it be?

Rep. HYDE: Well, it would be a serious escalation of tension that's already there. Honduras has an army of about 16,000. The army in Nicaragua is upwards of 75,000, and if they bring in these sophisticated fighter planes that are also bombers and can go fully loaded 400 miles with tanks, a range of 400 miles, this would be very destabilizing, to use a favorite word, and I would think some action would have to be taken, not necessarily military at first. But there are economic sanctions, diplomatic sanctions. Certainly the Contadora process, which contemplates deescalating the tensions and getting weaponry out of the area, would be certainly violated, and that's why I kind of have my doubts that the MIGs are there.

LEHRER: All right. What's your view of it, Congressman Shannon, as to how big a deal this would be if they are there?

Rep. SHANNON: Well, first of all, let me just say that I share Henry Hyde's doubts that they're there, and I think that we're all having this discussion on very, very skimpy information. I mean, even administration officials have said that they seriously doubt that there are MIGs there.

LEHRER: Well, then what's going on, Congressman?

Rep. SHANNON: I don't know what's going on, and I am a little bit chagrined that the intelligence community would leak this story so intently to the press on Election Night or Election Day or, you know, I don't know when it was leaked, and create all of this fever of concern both in this country and Nicaragua. And I don't know what the political purpose behind that would be or what any other purpose might be, but I think it's terribly unfair to jump to the conclusion that the MIGs are there. And I've been listening to the radio and I've been getting telephone calls from people, and they're having all sorts of great discussions about whether we should go in and take them out militarily if they are there. I doubt very seriously that there are MIGs in Nicaragua. If there were MIGs, I think that that would be cause for concern of the United States.

LEHRER: To do what? What should we do, Congressman Shannon?

Rep. SHANNON: I think that we should go to the Security Council at the United Nations under those circumstances. Actually, more appropriately, Honduras should go to the Security Council, and we have legal means and procedures that we could follow, as Congressman Hyde pointed out. And this notion that you have to jump to some kind of military solution to everything I think is just absolutely dead wrong.

LEHRER: You agree we shouldn't, Congressman Hyde, you agree we shouldn't jump to a military conclusion. But you also say that somewhere down the line that would be -- if it was necessary, do it, don't hesitate?

Rep. HYDE: Well, I think if Honduras has a reasonable fear of invasion from Nicaragua, I think we would have an obligation to assure their security. I would disagree a little bit with Jim, my good friend. I would go to the Soviet Union, not necessarily to the U.N. They would have difficulty taking time off from beating up on South Africa and Israel to deal with this. But the Soviet Union, it's their ship, it was loaded in Odessa, it came direct to Corinto -- I would think asking them what they're doing would be more effective.

LEHRER: Let me ask you this, Congressman Hyde, then we have to move on. You also said you doubted those MIGs were there. What do you think is going on here then?

Rep. HYDE: Well, I think it's interesting if some disinformation is planted. Jim said the intelligence community leaked a story. He knows something I don't know. It could have come from anywhere. It has created some theater for the media, but Ortega has --

LEHRER: I deny that, sir.

Rep. HYDE: You deny that affirmatively.

LEHRER: Yes.

Rep. HYDE: Ortega has been predicting an invasion. They may be trying to create a flurry of activity to say, "See what I mean, America has designs on invading us," which I'm sure we don't.

LEHRER: Okay, we'll be back. Robin?

MacNEIL: If they are doing it, why would Moscow want to make such a provocative gesture to Washington right now? That's a question we put to Alvin Rubinstein, professor of political science at the University of Pennsylvania. He's an expert on Soviet policy in the Third World and the author of many books and articles about it.

Why would the Soviets, if they have done so, send such a provocative shipment right now?

Prof. ALVIN RUBINSTEIN: If the shipment turns out to be MIGs, there are a number of possibilities. First of all, the Soviets may very well be showing that they're supporting a progressive Marxist-Leninist regime in the Western Hemisphere. The Soviets would argue, as do -- may, the Nicaraguas may do -- that they have every right to obtain whatever arms are necessary for their defense. Ideologically the Soviets would be showing solidarity with a Marxist regime. If there are MIGs in those crates, it may be designed to test the Reagan administration, find out precisely how determined and how effective the Reagan administration is in coping with a problem of this sort. The Soviets, after all, can look back on the administration's handling of the Lebanese problem, and it can see that the administration was less than effective. It may very well be trying to probe just how far the administration is prepared to go and how effective it is in carrying out a stated objective. Now, a third possibility is that they want to provoke the U.S. into some overreaction. This could bring the Soviets political advantage so. It could enable them to come to the U.N. or to the nonaligned forums and to say, "See, the United States is picking on poor Nicaragua. We just sent a few planes and look what the U.S. has done."

MacNEIL: But wouldn't such a test or challenge or provocation or whatever it is run directly counter and seriously compromise what appears to be, or many people are interpreting, as a Soviet effort to try and improve relations now with President Reagan and Washington on the wider issue of arms control and so on?

Prof. RUBINSTEIN: I don't think there's anything that's abnormal about past Soviet behavior. We have had many times cases in the past when the Soviet Union has talked about improving relations but has in a number of specific instances tested just how far it could probe or push or take advantage of a situation in a different part of the world. Then the Soviets if caught would back down or would retreat or do something, but meanwhile resume relations with the U.S. at other levels.

MacNEIL: Is it likely that this leadership, which seems in other ways so much more cautious and conservative in its actions, and collective, also, than the days of the free-swinging Khrushchev, who put the missiles in Cuba, would behave this way?

Prof. RUBINSTEIN: I don't find that the action for the moment is out of character with what you've just said. After all, we don't know whether there are MIGs in those crates. If there are, it's possible that those crates will never be uncrated, that they may very well be shipped back to the Soviet Union.

MacNEIL: In other words, the test would have been successful just by seeing what react in there was in Washington to the possibility of there being MIGs in the crates.

Prof. RUBINSTEIN: Exactly.

MacNEIL: And that would provide the test, and they'd go back again.

Prof. RUBINSTEIN: That's right. The Sandinista leadership has put itself on the line. It has stated unequivocally that there are no MIGs in those crates. If it turns out that those MIGs are uncrated -- the crates are uncrated and we have MIGs in there, the Sandinistas will be shown to be first-class liars, and I think that that would be less than beneficial to the Soviet case.

MacNEIL: Now, Professor Rubinstein, you've done a brave job of speculating with the best information you can bring on this. What's your own hunch? You heard what the two congressman said; what do you think?

Prof. RUBINSTEIN: I don't think there are any MIGs in those crates. The Soviets may very well have experimented with a ship that they sent up to Corinto. Apparently there were several ships that off-loaded various armaments in Nicaragua's Atlantic ports a few weeks ago, with crates that were very similar to the ones that are on the ship off Corinto. And this may be part of a Soviet ploy to see precisely how far they can go.

MacNEIL: What's your view of this, Congressman Shannon? Speculation of what the Soviets might be up to, and why would they send a freighter unusually all the way around the tip of South America and up to the Pacific port?

Rep. SHANNON: Well, I don't know the answer to that question other than the alternative route to get to that port, I suppose, would have been through the Panama Canal, and perhaps they didn't want to disclose for their own defensive reasons what was in there. There could be helicopters, there could be some kind of anti-aircraft guns or ground-to-air missiles to protect against air attack. There could be defensive weapons, and they might have their own reasons for not wanting to disclose that. Let me make a point if I can about not just the Soviet leadership but the Nicaraguan leadership. They're not stupid, and they know that the United States is 100 times the size of Nicaragua, and they've gone to some lengths, I think, particularly in recent months, to try to accommodate the United States. They have agreed to sign the Contadora treaty. Congressman Hyde mentioned Contadora. The Contadora treaty would prevent the intervention of MIG jets into Nicaragua, and the United States is now trying to back off on all of that. And so I don't believe -- you know, it's one thing to say the Soviet leadership is conservative. But I think on this issue or provoking the United States, the Nicaraguan leadership is also very conservative, and so I doubt seriously that they're doing anything as provocative as bringing MIGs into Nicaragua.

MacNEIL: What's your view of that, Congressman Hyde?

Rep. HYDE: Well, I agree with Jim. I think the consequences would be very serious. I think there's something in those crates. I think it has to do with military weaponry or something like that.

MacNEIL: But you agree with Congressman Shannon that the Sandinistas have recently shown themselves to be sensitive to Washington's concerns and are making gestures of accommodation?

Rep. HYDE: I don't -- I'm not as enthusiastic as Mr. Shannon is about the Sandinistas. We have not backed out of the Contadora agreement, as he said. We're trying to get it verifiable, a word that has to be taken seriously. But they want to freeze the process, not negotiate. But I think it would be a grave mistake; I think the Sandinistas know that. Unless they have to do what the Soviets tell them to do, I think that this may be a tempest in a teapot.

MacNEIL: How plausible do you think are Professor Rubinstein's theses on what the Soviets might be up to, or hypotheses?

Rep. HYDE: Well, yes, I think it makes sense that the Soviets' worst-case scenario, they do have MIGs in there to see what our reaction would be. They may have anticipated a Mondale victory, who knows, when they started the ship out. But it is plausible.But again, it doesn't make sense. It would make liars out of the Sandinistas. The Soviets have also denied there are MIGs in there. And it would certainly ruin any propaganda value that the Nicaraguans think they have, or the Sandinistas, rather, with the Contadora countries.

MacNEIL: What's your view of the possible Soviet motivation, Congressman Shannon?

Rep. SHANNON: I don't know what the Soviet motivation would be. I think that the tensions between the Soviet Union and the United States can lead to an awful lot of unfathomable kinds of actions on both sides unless we strengthen the relationship and relieve some of those tensions. But I just have great difficulty seeing any rationale at all at this particular point, either one of political embarrassment or one to try to provoke us for any kind of nefarious reason -- why the Soviets would do this. It would be foolhardy, and I don't think anybody would gain from it, so I just don't believe it's the case andI think that if our intelligence continues to track these ships and these crates, as I'm sure they will, we'll find that it wasn't the case.

MacNEIL: Professor Rubinstein, given the past history of relations between the U.S. and the Soviet Union at moments of crisis, when there's a desire to have no misunderstandings, the U.S. has reported already to have talked to the Soviet Union about this. Is it likely -- how would the Soviet leadership tend to behave? Would they say privately, "Look, there aren't any MIGs in there" or would they say, "It's none of your business" or would they see the thing blowing up so much that they might want to come clean privately?

Prof. RUBINSTEIN: I think everything you've said would be a possible reaction on the part of the Soviets. I don't know what we said to them. But you know, this is not the Cuban missile crisis, and it would be, I think, foolhardy of us to act as if there is a major crisis brewing between the Soviet Union and the United States over those crates. It may very well be that the U.S. intelligence community preempted a crisis by announcing that there was this Soviet ship that behaved erratically, that zigzagged its way around the coast of South America, came up the Pacific coast, and tried to off-load rather secretly. And in so doing, it may very well have alerted the Kremlin to the fact that if there was an attempt to send in MIGs, that they'd better back down or at least they have time to back down. So I think in retrospect, if there is no crisis, part of the credit probably has to go to the intelligence sources that notified us in the first place.

MacNEIL: I think on a speculative story we've covered all the bases of speculation we can find at the moment. Professor Rubinstein, thank you; Congressman Hyde, thank you; Congressman Shannon, in Boston, thank you. Jim?

LEHRER: Still to come tonight on the NewsHour, a Judy Woodruff interview with the man who runs the White House, chief of staff James Baker; a look at the shape and substance of the New Congress by our favorite Congress watcher, Norman Ornstein; and an interview with the man who said "no more" today: Education Secretary Terrel Bell. James Baker: Looking Ahead

LEHRER: We move now to a major focus section on what next now that the election is over -- what next for the administration, what next for the Congress? The administration's view of the postelection world is that of James Baker.

[voice-over] There are many who say there were two big personal winners Tuesday in the race for president, the other one being James Baker, the White House chief of staff. When the Reagan White House first went into business four years ago, he was the outsider, the junior partner to long-time Reagan insider Ed Meese. Meese is still there, more or less in limbo, awaiting confirmation as attorney general, but Baker is clearly number one. Even his enemies say he's smart and straight. Even his friends say he plays hardball and always to win. He's known as a conservative pragmatist politically, which isn't conservative enough to those in the New Right who want more ideology from Mr. Reagan and his administration. To Republican congressional leaders and some Democrats, he's known as a godsend, the only man to talk to to get things done. To all he is known as the man behind the strategy that resulted in Mr. Reagan's stunning reelection and the other man who counts behind how the White House will play out the next few months and the last four years of power. For all those reasons and others, Judy Woodruff sat downfor an extended interview with James Baker yesterday in Santa Barbara.

[on camera] And Judy brought it back to Washington with her this afternoon. Judy?

JUDY WOODRUFF: Jim, I should say to begin with that despite a lot of earlier speculation about whether Baker might move to a Cabinet job, everybody now expects him to stay in his White House post, at least for another year. In the interview he tried, not surprisingly, to play down the significance of the failure of Republicans to regain the strength they had in the House of Representatives when Mr. Reagan first came to office. I started by asking him what the President's chief goals are for his second term.

JAMES BAKER: Domestically, I think the number priority will be seeing what we can do about the deficit in terms of further reductions in federal spending. Secondly, seeing whether or not we can enact an historic simplification of the tax code. Both of those are very difficult goals to accomplish, and we don't take it for granted that we're going to be able to get there. But those are the primary domestic policy goals. Now, just one foreign policy goal, if I might, and that is the maintenance of peace, as the President has expressed it, and the achievement of a meaningful arms reduction agreement with the Soviet Union. Not a bad agreement from the standpoint of the United States, but a good agreement, one that's equitable, one that's verifiable, and one that results in a reduction of nuclear arms.

WOODRUFF: All right. Well, in the domestic area, you mentioned budget cuts. You have tried for the last four years to cut government spending; it's been very difficult. What new ideas do you have for getting down government spending?

Mr. BAKER: Well, it's been very difficult, and you're right. Now, in 1980 the President said that he wanted to reduce the rate of growth of federal spending, and he's cut it roughly in half. I mean, federal spending is no longer going up at 17% a year. It's down to roughly half of that. Most of those reductions that we've been able to accomplish were accomplished in the first year of the first term, 1981. And it gets tougher and tougher as you get into a presidential term. Now we will have another honeymoon period of undetermined extent and duration. We should be able to do better in the first year of a second term than we were able to do in the fourth year of the first term. So we hope we'll be able to make some additional reductions, maybe get some of those reductions that we've sent up that we were unable to get in the third and fourth years of the first term.

WOODRUFF: But even that's not enough, is it?

Mr. BAKER: No, you've got to do more, and the President has said, you know, that he wants to first also -- not first, but he wants to see what we can get by way of additional growth. We've gotten more growth in terms of deficit reductions than we had anticipated. In addition to that, you're going to have to see what results from a tax simplification that broadens the tax base and gets more revenue for the government from people who are not now paying taxes.

WOODRUFF: Do you have specific ideas right now what more you can cut out of the budget before we get into taxes?

Mr. BAKER: Well, I don't specifically sitting here, beyond knowing, for instance, that we've got to take a look at things across the board. The President said he's not going to touch Social Security and that Social Security is fixed well into the next century, and that's a commitment and a promise he's going to keep. So we're not going to look atthat. He's obviously not going to look at reducing the defense budget below what it was last year.He'd still like to see us remain prepared for peace, restrengthen our defenses, by seeing some increase, some reasonable increase in the defense budget. So put those two things aside, then look at everything else.

WOODRUFF: Medicare?

Mr. BAKER: Look at everything. We're going to have to consider everything. Agricultural programs. You know, there are just a lot of things. We sent a lot of cuts up that we were unable to get in years three and four of the first term.

WOODRUFF: What about a budget freeze?

Mr. BAKER: Well, you've got to look at a budget freeze. I mean, that's something that has to at least be looked at. Now, that's not something that's --

WOODRUFF: You want to lay odds on it?

Mr. BAKER: That's not a blueprint, it's not on the drawing board, but sure you got to look at that and consider it. But the fact of the matter is that the budget is not going to be discussed at the White House until starting Monday the 12th of November.We're just getting into the budget process, so I can't sit here and tell you we're going to look for cuts in this, that or that program.

WOODRUFF: Walter Mondale is saying the one thing this administration is going to have to eat crow over, his words, is the issue of tax increases, that you're going to have to somehow raise revenues in order to get the budget deficit down.

Mr. BAKER: Well, you know, I just want to tell you that this President campaigned in 1980 against tax increases, in fact for tax decreases, and he gave them to the American people. He campaigned, and this campaign was fought out over the question of tax increases. And you're not going to see a tax increase proposal submitted by this President. You're just not. He said back in August that, you know, as far as he was concerned, raising taxes was an absolute last resort. And last resort means you don't even look at it.

WOODRUFF: Not submitted, but in the recesses of your mind and your heart, you don't think that he's going to have to --

Mr. BAKER: No, ma'am.

WOODRUFF: -- go along with some kind of a tax increase.

Mr. BAKER: I certainly don't, until we see at least the extent to which additional growth and additional reductions in federal spending and broadening the tax base, all three of those things, we've got to first see how much we can reduce this deficit through recourse to all three of those things. So don't be looking for a tax increase, 'cause it's not going to come from this administration.

WOODRUFF: Specifically, how are you going to work with the House when you don't have as many Republicans to count on as you had even in '81?

Mr. BAKER: Well, we don't have as many as we had in '81, but we've got a lot more than we had in '83 and '84, and we got a few things accomplished in '83 and '84. And also, Judy, I think you've got to -- before you can determine whether we've got a House -- before you can determine what we can do in the House of Representatives, you've got to take a close look at those Democrats who were elected narrowly in districts in which the President was very strong. Because they could -- you know, there might be a lot more Boll Weevils in that next Congress than we anticipate.

WOODRUFF: What do you mean take a look at them?What does that mean?

Mr. BAKER: Well, I mean, you've got to see where they're going to be on these issues, see where they might vote on some of these issues. Just the mere fact that they're Democrats doesn't automatically mean that they're going to be voting against, for instance, reducing tax rates further in a way that simplifies the tax code and makes it more fair.

WOODRUFF: Are you saying maybe the fear of God is put into some of them because the President ran stronger than they did?

Mr. BAKER: No, I'm not saying that, but I am saying that they're all political people and they're aware of what the numbers -- of what the President's numbers are in their district, just as they're aware of the extent or scope of their margin of victory. So those who won narrowly in districts that the President carried handsomely, we should be able to work with.

WOODRUFF: So then what will be your coalition in the Congress?

Mr. BAKER: It'll be the Republicans, it'll be those Boll Weevils that we've worked with in the past, and any new Democrats that we could characterize as boll weevils by reason of their votes on particular issues. So you're not really going to know that, quite frankly, until sometime in January or early February of next year.

WOODRUFF: Is the President a lame duck?

Mr. BAKER: Oh, I suppose that any president, any incumbent president who's reelected by virtue of the constitutional prohibition against more than two terms is a lame duck, if you want to call him that. But in terms of being able to move the country, absolutely not. A newly elected president with a margin as great as this one and a personal victory as big as this President has achieved is anything but a lame duck. Sometime after the midterm elections in 1986 I suppose a second-term president would be more appropriately considered a lame duck.

WOODRUFF: Baker would not say exactly how long he thinks the President's new clout with Congress will last, but senior White House aides say privately they expect their power will start to diminish after the first eight months of the new term. Not much time. Jim? Congress: "Capitolizing on Power"

LEHRER: Thank you, Judy. And that brings us to Norman Ornstein, the man we have come to believe knows more about Congress than even Congress itself does. He is a political scientist at the American Enterprise Institute and a regular contributor to this program. Tonight we talk about how the dust from Tuesday's election may eventually settle on Congress, particularly the Senate.

First of all, any overview statements you would like to make, Mr. Ornstein, about how this Congress is going to differ with the one that it replaces?

Dr. NORMAN ORNSTEIN: Well, I think when you really look at all of the pieces, we're going to find more contention between the House Republicans and the Senate Republicans than probably any other groups in Washington.

LEHRER: Why?

Dr. ORNSTEIN: Well, House Republicans have tended in the past to be a little more feisty and a little more conservative, at least in terms of the issues that the Republican platform has considered. They're much more adamant about a tax increase -- they're against it. They're much more concerned overall with the social agenda -- abortion, prayer in he schools, the constitutional amendment to balance the budget, for example. They're a little more feisty when it comes to defense increases. And remember, they're a minority party, so it's easy for them, without having the responsibility for governing -- and when they go to the public in 1986, that midterm election, they don't have to worry so much about the record. Senate Republicans are more moderate to begin with. They are the majority. They do have to worry about the record, and they know that the record is such that in the sixth-year election of a two-term president, it's usually very bad for the President's party. They're going to pushing hard very quickly with Jim Baker and others for a deficit-reduction package that will almost inevitably include a tax increase early. They know that the President's standing will diminish probably before the first eight months. If you don't get it done quickly, it won't be done at all, and they're worried.

LEHRER: All right, let's talk about the Senate. The Senate leadership on the Republican side, the race to replace Howard Baker as Senate majority leader. What's the dope on that?

Dr. ORNSTEIN: Well -- or who's the dope on that?

LEHRER: You said that; I didn't say that. I said what's the dope.

Dr. ORNSTEIN: Well, this is another complicating factor, Jim. You've got a shakeup now. It's going to take a while for the Senate to shake itself down, and it's going to mean all the leadership levels -- the majority leader at the top, the whip and several other positions -- you've got 15 Republican senators out of their 53 running for a leadership post, five for the top position, that of majority leader that Howard Baker vacated. It's hard to tell right now. Several have some support, but I would say probably the frontrunner is Bob Dole. Bob Dole, the chairman of the Finance Committee, a veteran who was former chairman of the Republican National Committee and he ran for vice president himself.The problem that Dole has is that he's a little quick with his wit sometimes, and also people are concerned that he might be running for president in 1988 and he's up for reelection in 1986. They want somebody who will look more carefully at Washington.

LEHRER: He was on our program last night and he said very much that he wanted the job and he was hustling.

Dr. ORNSTEIN: I think he's working hard for it, and he is a strong figure who's going to stand up for Senate Republicans against all forces, maybe including pressure from the White House, and that'll serve him well.

LEHRER: How would his leadership change with -- how would it be different than the leadership under Howard Baker?

Dr. ORNSTEIN: I think that you'd find that he's a little less laid back than Howard Baker in terms of letting all the forces work themselves out. Howard Baker was folksy, and he was able to work things so that he could just steer it a little bit in his direction. In an individualized institution like the Senate, sometimes you have to be that way. But Dole is as savvy a vote counter and coalition builder as Howard Baker.Now, he's got another problem, and that is that he is chairman of the Finance Committee. If he becomes leader, he leaves it. Next in line is Bob Packwood, who some of the conservatives and some business figures would not want to see chairing of that very important committee.

LEHRER: All right, let's go through some of these committee changes. Foreign Relations, of course -- Senator Percy was defeated. All right, what's the scenario there?

Dr. ORNSTEIN: Well, it gets very complicated because the leadership race gets involved there too. Next in line in seniority is Jesse Helms. And Senator Helms, in the midst of that tough reelection campaign, he made a public pledge during a televised debate to the voters of North Carolina that he would not move from the Agriculture Committee. A lot of people speculated, however, that he will be looking for ways to move. Next in line is Senator Richard Lugar of Indiana, who is also running for majority leader. Now, if Helms kept his pledge and Lugar became majority leader, then the chairman of the Foreign Relations Committee would be Charles "Mac". Mathias of Maryland, and that would drive conservatives absolutely up the wall.

LEHRER: He's a liberal Republican.

Dr. ORNSTEIN: Yes. And of course, I think that one of the things that's going to happen is that some senators are going to go to Senator Lugar and ask him to withdraw from the race for majority leader and they'll go to Senator Helms and see if he'll stay at Agriculture if they can guarantee in return that Lugar, a conservative, whose views are much like Helms' but whose style is a little less combative, will take over the Foreign Relations Committee. We don't know whether either man would consent to such a thing.

LEHRER: Sure. On the economic issues, there are three committees. You mentioned one of them, the Senate Finance Committee. There are a couple of others. Now do you see things shaking down there?

Dr. ORNSTEIN: You've got three big committees on money, Finance, which is taxes; the Budget Committee, which of course deals with the big overall budget -- the chairman of that is also running for majority leader, Pete Domenici. If he became majority leader, the chairman would be Bill Armstrong, who's much more hardline conservative antitax increase than Domenici.

LEHRER: Both of whom were just reelected.

Dr. ORNSTEIN: Both of whom were just reelected by very sizable margins, over 70% in Domenici's case, 65% in Armstrong's case. The Appropriations Committee is the only one where we can be pretty sure there won't be a change no matter what. Mark Hatfield, who was just reelected by a sizable margin, has been chairman there in the past and he'll stay as chairman. The only complicating factor there is when we get to defense. The Defense Appropriations Subcommittee, the biggest one and a very significant one, is chaired by another candidate for majority leader, Ted Stevens. But it's his good fortune, with Lowell Weicker, a very liberal Republican next in line, that the rules permit him to keep a subcommittee chairmanship. So he may be the only one of the leadership candidates who doesn't have that liability of someone waiting in line with musical chairs.

LEHRER: All right. The Armed Services Committee -- Senator Tower is leaving because he retired. What happens there?

Dr. ORNSTEIN: Well, this of course is a key issue. What happens to defense in the next couple of years is going to be very important -- rate of growth and the particular programs that get emphasized. With Senator Tower leaving, the next in line in seniority, who actually had more seniority than Tower on the committee, was Strom Thurmond. Thurmond gave up his possibility of chairing the Armed Services Committee in the past to chair the Judiciary Committee, and one part of the reason was the ever-present Mac. Mathias, the liberal, who would have taken over otherwise. And he sacrificed to become the leader on that committee. My guess is that Thurmond will, for the same reason, probably be drawn to stay at Judiciary; and then comes Barry Goldwater, who has announced already that he'll be leaving after two years, and of course who's had several health problems. Now, he, despite being very strongly prodefense, as we've seen many times in the past, is also rather cantankerous, and I suspect there are some people at the Pentagon who are quaking in their boots a little bit because Senator Goldwater doesn't pull any punches when it comes to criticizing anybody, including the Pentagon.

LEHRER: And then finally the social issues. Of course, the Senate Judiciary Committee would affect that -- abortion and school prayer and those kinds of things.

Dr. ORNSTEIN: The key factor here, or the key figure here, is probably Orrin Hatch, who not only chairs an important subcommittee on the Judiciary Committee, that on the Constitution, which deals with many of these social issues through constitutional amendments, but is also chairman of the Labor and Human Resources Committee, which handles the other end of the social spectrum, including such issues that have been pushed in the past as teenage chastity and the squeal rule and so forth, dealing with birth control and abortion. He's going to be a power in this next Senate in substantive terms, I think. Of course, the problem that all Republicans have is that their margin is reduced to 53 to 47, and when you look at the turnovers in the Senate, it is a more liberal Senate by a couple of votes. And when you add the moderate liberal Republicans to the mainstream Democrats, it's going to be extraordinarily hard for anybody in the policy area, like Orrin Hatch, much less the next majority leader, whoever he may be, to pull together a majority for almost anything.

LEHRER: Ornstein, you really do know more about Congress than anybody I've ever seen in my life. Thank you very much.

Dr. ORNSTEIN: Thank you, Jim.

LEHRER: Thank you. Robin? Terrel Bell: Calling It Quits

MacNEIL: As we reported earlier, the secretary of education, Terrel Bell, announced today that he will resign at the end of December. He's the first member of the Reagan Cabinet to step down following the President's landslide reelection on Tuesday. Secretary Bell is with us this evening in Washington.

Mr. Secretary, thank you for joining us.

Sec. TERREL BELL: Thank you.

MacNEIL: Why resign now?

Sec. BELL: Well, it's the end of the first term, and I don't choose, to use a Marine Corps term, reenlist.

MacNEIL: Why is that when the President praised you for the progress you've made in improving the state of American education in schools. Why would you want to leave now?

Sec. BELL: Well, seriously, I have personal reasons relating to a family business. And in addition to that, I've been offered a professorship in my home city, University of Utah, and I'm looking forward to the life of academe.

MacNEIL: What do you think you've accomplished in four years, Mr. Secretary?

Sec. BELL: Well, I need to be careful I don't sound boastful. I'd say that American education has really moved along as a result of our National Commission on Excellence report. We have a major reform movement going on. Some have called it a renaissance of American education. It all came about from our report in April of '83. The nation's governors rallied round, have made some very significant moves through their state legislatures, and we've taken some actions that I also think have been helpful.

MacNEIL: Like what?

Sec. BELL: Well, we've been pushing hard on changing the teacher personnel practices in this country. The American teaching profession is really in difficulty right now, and we're slowly getting a career ladder system, an academic rank system based upon merit established in our schools. Tennessee, Texas, California, Florida, South Carolina -- eight or 10 states have enacted career ladder systems where some of the compensation will be based upon performance. Now, this is very significant because the teaching profession has been a dead-end job, and we really need to make teaching more competitive and more attractive in our country. We're losing our best teachers, and as you look on our university campuses now and look at those that are studying to be tomorrow's teachers, most of them have scored on the bottom of the SAT scores. So we need to be more competitive if we're going to get the top talent.

MacNEIL: Do you feel you can depart now and that it's time that the job disappear and the department be abolished, as you and Mr. Reagan planned four years ago?

Sec. BELL: No, and I don't think that's an issue. We had a cut at theat early in the first term. We proposed a foundation structure, and we tried it in the Senate, where we had the majority, and I got a grand total of 19 votes in support of it. And in addition to that, it's significant that the Republican national convention, their platform committee after having quite a ferocious debate, opted not to include that in their platform this time. So I think that issue is sort of past us.

MacNEIL: Looking back on it now, do you think you and the President were just plain wrong in saying you could do away with the Department of Education?

Sec. BELL: Well, I never did think we could do away with it like some of my conservative critics wanted to do, and abolish the federal role and abolish all of the student aid programs, like the guaranteed loans, all the aid to the disadvantaged and all the aid to the handicapped. I never did think we were going to eliminate the federal role in education. And of course, our critics were disappointed when we came up with an alternative structure. And I don't think we were wrong in proposing an alternative structure at that time, but I'd have to say that since then, and having had experience in the Cabinet, knowing at first hand the clout that a Cabinet officer has. I've come around from a point where I didn't believe that it mattered much whether we had an independent agency like a foundation or a Cabinet-level entity. I think American education needs a Cabinet secretary of education.

MacNEIL: Is part of your reason for resigning now that you worry that education may not be the priority in the second term that it was, partly perhaps for reelection purposes, in the first, in terms of expenditure? We just had James Baker, White House chief of staff, saying that nothing except defense and Social Security will be immune from the axe when it comes to looking for domestic budget cuts. Are you worried about -- that education won't have that priority?

Sec. BELL: No, I'm not. You know, the President has given over 50 major addresses on education, and I've had ample opportunity to discuss education with him. I know what his commitments are, from debates and struggles that I've had over the budget with the director of OMB and others.

MacNEIL: How does the President express those commitments?

Sec. BELL: Well, when I use that appeal, I get a budget that's been quite satisfying.

MacNEIL: In fact, it's ironic, isn't it, that the budget of your department is now $3 billion higher, at $17.9 billion, than it was when you came in wanting to do away with the department.

Sec. BELL: That's correct. Now, I would emphasize that the budgeting process is a negotiating thing, and if you want to end up at a reasonable level, you have to start lower. We get blamed for having started lower, and I think we'll be, for openers, with the budget crunch, I think the coming budget will be a start-lower budget. But I think we'll end up about where we are with it. So I'm not worried and I'm not leaving because of that.

MacNEIL: You think in the President's mind, education will be immune from cuts, like defense?

Sec. BELL: Oh, I wouldn't want to go that far, but I would say that education is going to have a higher priority than a lot of other activities. Education is a good issue for Republicans. You teach someone how to fish rather than giving them a fish, and it beats welfare to help someone learn how to be independent and be a taxpayer rather than a tax eater. That's a good Republican issue, Robert, and that's why -- Robin -- and that's why I'm pleased with it.

MacNEIL: Well, Mr. Secretary, thank you for joining us, and we wish you well in your retirement.

Sec. BELL: Thank you. It's been a pleasure to be on your show.

MacNEIL: Jim?

LEHRER: Thank you, Mr. Secretary. Again, the major news of the day. The Sandinista government of Nicaragua claimed the United States has violated its territorial waters in shadowing a Soviet freighter. The United States denies the charges but says the freighter may have brought sophisticated MIG-21 Soviet fighter planes to Nicaragua. Nicaragua denies that.

The space shuttle Discovery is off and well into orbit.

And the man Robin just interviewed, Education Secretary Terrel Bell, resigned.

Good night, Robin.

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