The NewsHour with Jim Lehrer

MR. LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight accused war criminals and other problems in Bosnia as seen by NATO commander Admiral Leighton Smith; hate crimes in California, Spencer Michels reports; how to raise the minimum wage, Secretary of Labor Reich and Sen. Bond debate; and the President of Poland, Charles Krause has a conversation. It all follows our summary of the news this Monday. NEWS SUMMARY

MR. LEHRER: A war crimes prosecutor today called for the arrest of Bosnian Serb leaders Radovan Karadzic and Ratko Mladic. Both have been indicted by the International Tribunal for genocide. The commander of the NATO force in Bosnia, Admiral Leighton Smith, said in a NewsHour interview he has no mandate to arrest these or any other war criminals.

ADM. LEIGHTON SMITH, NATO Commander, Bosnia: [London] First of all, the guidance that we get and the rules of engagement under which we operate are quite clear. And that is that we will not go hunting down war criminals. We don't even have authority to arrest anyone. We have authority to detain and immediately turn them over to the international tribunal. I get the guidance from our political masters. Of course, they get input from us, the military side. Right now my guidance is exactly as I have previously stated.

MR. LEHRER: Mm-hmm. All right.

ADM. SMITH: And we are following that guidance.

MR. LEHRER: We'll have the rest of that interview right after this News Summary. American military forces will conduct a month of war games in the Persian Gulf beginning Wednesday. U.S. military officials said today the Army, Navy, Air Force, and Marines will be involved in the joint exercises that will run through August 30th. The Senate began debate today on a minimum wage bill. It would increase the minimum wage from $4.25 per hour to $5.15 over two years. A Republican amendment would exempt employees of small businesses. A vote is expected tomorrow. President Clinton has said if the Republican amendment is adopted, he will veto the bill. We'll have our own debate on the issue later in the program. The President of Poland called on President Clinton at the White House today. They discussed the possibility of Poland's joining the NATO alliance, among other things. We'll have a Newsmaker interview with the Polish leader later in the program. President Clinton announced a new youth crime program today. It uses a federal computer system to trace guns used by juvenile offenders. Seventeen cities have pledged to participate. He spoke in the East Room of the White House.

PRESIDENT CLINTON: Police on the beat, prosecutors in the courtroom, federal investigators in the crime lab, they'll all work together in a genuine national team to take on the gun runners. Those who illegally peddle guns to our children will get a simple message: We will find you, we will prosecute you, and we will punish you.

MR. LEHRER: The Dole for President campaign immediately suggested Mr. Clinton's announcement was politics. A campaign statement said the Bureau of Alcohol, Tobacco, & Firearms had already announced this new program back in November of 1993. Israeli Prime Minister Benjamin Netanyahu comes to Washington late tonight for talks with President Clinton tomorrow. It is Netanyahu's first trip here since succeeding Shimon Peres in May. Before leaving Tel Aviv, he added Ariel Sharon to his cabinet. If parliament approves, Sharon will become the minister of national infrastructure. Sharon was defense minister during Israel's 1982 invasion of Southern Lebanon. He's an outspoken advocate of Jewish settlements in the West Bank and Gaza. The official who criticized the Federal Aviation Administration's handling of ValuJet Airlines resigned today. Transportation Department Inspector General Mary Schiavo publicly questioned the FAA after the ValuJet crash in May. Her staff assistant said her boss would speak and write and probably work as an attorney again. A Cuban military officer hijacked a commercial airliner yesterday. He forced the plane to land at the American Naval Base at Guantanamo Bay where he requested asylum in the United States. He's now in the custody of the U.S. Immigration & Naturalization Service. All 16 hostages on the airplane were freed unharmed. In Washington, a State Department spokesman commented on the incident.

NICHOLAS BURNS, State Department Spokesman: He hijacked an airplane. He hijacked it to an American facility. He must have had some reason for doing so. We're trying to find out what that reason is. We have an obligation to ourselves to answer that question before we can decide on the best course of action available to the United States. This is a very serious matter, to hijack an airplane and to put other lives at risk, innocent lives, lives of innocent Cuban civilians at risk.

MR. LEHRER: The President of the Cuban National Assembly said today Havana expects the United States to return the hijacker to Cuba. The first hurricane of the season moved through the Caribbean today. Hurricane Bertha pounded the U.S. and British Virgin Islands with heavy rain and wind up to 103 miles per hour. Trees were uprooted and roofs were blown off. A surfer was reported drowned off the Coast of Puerto Rico. Forecasters said the 400 mile wide storm could strengthen as it moves West/Northwest toward Puerto Rico. And that's it for the News Summary tonight. Now it's on to the Bosnia mission, hate crimes in California, the minimum wage debate, and the President of Poland. NEWSMAKER

MR. LEHRER: We go first tonight to a NewsMaker interview with Admiral Leighton Smith, the commander of NATO forces in Bosnia known as IFOR. I talked to him earlier today from London.

MR. LEHRER: Admiral Smith, welcome.

ADM. LEIGHTON SMITH, NATO Commander, Bosnia: Jim, thank you very much. It's good to be back with you.

MR. LEHRER: Sir, prosecutors at the War Crimes Tribunal today asked for arrest warrants to be issued against Serb leaders Karadzic and Mladic. If you get those warrants, will, will NATO troops execute them?

ADM. SMITH: Well, of course, Jim, you know that NATO troops are under the guidance of the North Atlantic Council. That's the political body that governs our actions. Of course, if we get the order from our political masters to carry out an order, of course, NATO forces and IFOR forces will do just that.

MR. LEHRER: But short of--now who would give that order? What would be--if these warrants are, in fact, issued, how does it all get back down to you for you to issue the orders to your troops, okay, let's go arrest these two guys?

ADM. SMITH: Jim, any change to our current set of orders, or any change to the mandate under which I'm operating now, would require a political guidance from the North Atlantic Council of NATO. That would go down through Gen. Joulwan at SHAPE, who is my immediate superior, and Gen. Joulwan would issue that order. So right now I have no further guidance, other than that which we've been operating under all along, and that is if we come in contact with any of the indicted war criminals, we will detain them, of course, subject to the tactical situation, and that will be the commander- on-scene's judgment as to whether or not that can be done without undue risk to civilian population around.

MR. LEHRER: Is the No. 1 concern the risk to civilian personnel, rather than to find these people and to arrest them, as you sit there now?

ADM. SMITH: Uh, I'm not sure that that's the only thing you can consider in an act such as that, Jim. There are an awful lot of things. What is the overall effect on the peace process? What are the risks to the soldiers involved with conducting the operation? What would be the risks to the people in the general vicinity? Those are things that we've discussed, and certainly those are operational matters. I wouldn't want to go into too great a detail on those particular issues right now, but they are considerations, and they all have to be taken under consideration when you start talking about that kind of a move.

MR. LEHRER: Well, as you know, Admiral among--a lot of lay people don't understand why these two men are indicted for war crimes, and yet are running around loose there in Bosnia with your troops having them under sight from time to time. Can you explain that a little--a little further, so people can understand why these folks are not arrested?

ADM. SMITH: Well, Jim, first of all, the guidance that we get and the rules of engagement under which we operate are quite clear. And that is that we will not go hunting down war criminals. We don't even have authority to arrest anyone. We have authority to detain and immediately turn them over to the international tribunal. I get the guidance from our political masters. Of course, they get input from us, the military side. Right now my guidance is exactly as I have previously stated.

MR. LEHRER: Mm-hmm. All right.

ADM. SMITH: And we are following that guidance.

MR. LEHRER: Admiral, do you agree with those who say that until those two men are arrested and taken to trial, there can be no lasting peace in Bosnia?

ADM. SMITH: Well, Jim, I think perhaps the issue is larger than just those--than just those two. I would offer that there are many war criminals that are out there, and until and unless we get the parties that sign the agreement to begin carrying out their part of that agreement, and that is that they will cooperate with the tribunal and turn over indicted war criminals to stand trial for those actions, that seems to me to be the larger issue.

MR. LEHRER: And is that a serious issue in terms of a lasting peace? I mean, if those people won't turn over their own folks who are, who are accused of crimes, then that says something rather large about the possibility of a lasting peace?

ADM. SMITH: Well, I think there a lot of people that would agree that certainly in order to have a true peace you must also have justice. There are others who say you've got to achieve piece before you can have justice. That sounds to me like a chicken and egg--chicken and an egg concept, but I'm not--I'm probably not qualified to address it much further than that, except to say that I think that the people who signed the agreement should, in fact, live up to what they signed up to do, and they ought to turn over those indicted war criminals to the tribunal and let them stand trial. If they're innocent, it's the end of the issue. If they're guilty, then let--let the courts take care of that.

MR. LEHRER: But you see that as a political action, not the responsibility of you and your troops, is that right, to make sure that those people turn those people over?

ADM. SMITH: We do not at this point, Jim, have any orders whatsoever that would cause me to go hunting for war criminals, other than that which I've just explained.

MR. LEHRER: But what I mean is to put the heat on the various factions, in this case the Serb--

ADM. SMITH: Yeah.

MR. LEHRER: --the Serb leadership, to turn those two guys over, you don't see that as your function either.

ADM. SMITH: Well, we certainly are part of the, are part of the entire equation, but that is a political issue right now, and as I mentioned to one of the media representatives yesterday, there are three avenues here, political, economic, and military, and it seems to me that we ought to go after the people that signed the agreement in a political way, cause them to live up to that agreement, and certainly that is in the political arena.

MR. LEHRER: Admiral, there, on the military side, there have been two incidents in the last couple of days, one today involving some Portuguese troops under your command, and then there was a standoff of some kind yesterday involving some American troops in an area where Gen. Mladic is expected--is believed to be. What--can you explain what happened in these two cases, and how serious they were?

ADM. SMITH: Well, the first one had the potential to become very serious, but I think we were able to get that under control. Let me just start back about Wednesday, when we saw some tanks and some armored vehicles that were out of position. They were outside of an authorized storage area. That was seen via some reconnaissance assets. We went to take a look at that on Friday with helicopters. We received what we consider now to be a low-level threat issued by a liaison officer that if the helicopters conducting the reconnaissance were not, uh, would not immediately depart the area, that they would be shot down. I take every single threat seriously, so we immediately reacted to that, and we put some forces on alert. We had some fixed wing air come in, and I called up President Milosevic and had a nice, direct chat with him, and I asked him to do some things for me. And I told him what my actions had been, and he followed through on what I asked him to do, and I think he was helpful in defusing that problem. On the next day, Saturday, the American forces went in, and they were able to inspect the site and ascertain that everything was in order at that point. A British officer went in and talked with the Bosnian Serb army directly, and he was able to inspect some other areas that were of interest to us, so despite the fact that there was a bit of a problem in the early stages, a lot of it orchestrated frankly by the Serb side by getting some civilians out there to demonstrate and try to prohibit IFOR from doing their job, but I think overall there was resolve shown here, the job was done. I think it was done in the right way.

MR. LEHRER: And it's over? And it's over? That one's over?

ADM. SMITH: Yeah.

MR. LEHRER: Okay.

ADM. SMITH: I think that one's over, Jim.

MR. LEHRER: All right.

ADM. SMITH: Yeah. We've resolved that to our satisfaction. Now perhaps--I don't know whether the two are tied or not, but clearly, the tensions were high there, and so perhaps the issue with the Portuguese which happened near a town called Rogatica, where it's not clear to me whether threeindividuals fired a single burst or one person fired three bursts or just exactly what the scenario was, but clearly it was a dangerous situation where shots were fired at a vehicle in which Portuguese soldiers were riding. They came out of the vehicles and returned fire and saw three individuals departing the scene from which the--the area from which the shots were fired. Nothing further has been able to be done on that. Obviously, investigations continue. I consider that to be clearly a serious incident. We want to make sure that doesn't happen again. We've had previous sniping incidents, and we've been able to handle that.

MR. LEHRER: Admiral, is it your feeling that after six months, that if you all were to leave, that the fighting would break out, that--again, just like it was before?

ADM. SMITH: Well, I certainly wouldn't want to speculate on what would happen if we leave right now because that's not in the plan.

MR. LEHRER: Right.

ADM. SMITH: Uh, and I'm not prepared to make a guess on what'll happen in December, when we begin the drawdown from where we are now. Let me just very briefly run through what the plan is. We are currently reshaping the force. I think Sec. Perry made that clear in recent media releases. And what we're trying to do is to take some of the heavy artillery, some of the tanks out and replace them with more mobile and flexible forces that can come around, drive around the country in the HumVee. What this will give us is the same capability. In fact, we may increase the size of the force by a couple of hundred, but the bottom line is we'll maintain a good, solid capability until after the elections. And I will tell you that we're very, very much involved with OSCE in the conduct of these elections that are to be done in September. After the elections, a drawdown of some magnitude will commence. The rate of that drawdown, Jim, will be a function of the environment that we see after the elections. In other words, if it's nice and calm, things are going well, I'll expect a steeper slope. If it's not so calm and we have problems, I'll expect that that slope would not quite, be quite so steep. After December 20th, which is the one-year point--

MR. LEHRER: Right.

ADM. SMITH: --then the drawdown curve will start--will steepen up considerably and we'll come on out.

MR. LEHRER: I didn't ask the question very well. What I was really trying to get at, Admiral, is, is Bosnia still a tinderbox? I mean, these things, these incidents that happened just in these last two or three days, they were directed at your forces, but is this place still, still explosive? Is peace--in other words, what's the nature of the peace that you're supervising at this point?

ADM. SMITH: Well, I will tell you, Jim, I don't call it peace. I call it an absence of war. We're working towards peace. Frankly, the forces are not interested in fighting each other. They're in the contonement areas. Their weapons are in storage sites. They're demobilizing. The people of this country want peace. There is an awful lot of hate that remains there, a great deal of fear and suspicion, and I think we have to work through this. We are in the process right now of trying to build confidence that peace is possible and that this reconstruction that is going to now take hold that we're certainly again a part of will be a sign of this benefits of the peace and people will move towards reconstruction, rather than the destruction that results from this war.

MR. LEHRER: Now Admiral, your assignment there is, is running down. How much time--how much time do you have left before you come back?

ADM. SMITH: Well, I'll be leaving here on the 31st of July, Jim, and returning to the states. And after a couple of months I'll retire.

MR. LEHRER: How do you feel about what you did in Bosnia, the mission in Bosnia?

ADM. SMITH: I feel good, Jim, I really do. I mean--and I can't take any of the credit for this. There is fifty-two, fifty-three thousand soldiers, sailors, airmen, and Marines that are part of this, and I give the credit where it belongs. And that's to the guys on the ground just slogging it out day to day. But I've got to tell you, I've been associated with Bosnia very closely since April of '94, and obviously to some degree before that just in general interest, but the magnitude of change that has occurred in Bosnia just in the last seven or eight months is absolutely incredible. We never dreamed that we would have been able to come so far so fast with as little trouble as we've had. I mean, think back when we were debating about whether to put forces in here or not, and there were many people who opined that there would be thousands of casualties, that we would get ourselves bogged down into a war, we would be fighting amongst each other. We've got 34 nations over there, Jim. They're working together. We've got 53,000 forces. There are incredible things being done, and I could not be more pleased with the results that we've achieved, and I couldn't be more proud of the forces that are there, doing that job, and from a personal perspective, I feel pretty damned good about what's been done.

MR. LEHRER: Well, Admiral Smith, thank you very much.

ADM. SMITH: Thank you. FOCUS - HATE CRIMES

MR. LEHRER: Now, crimes of hate and how one California town is trying to stop them. Spencer Michels reports from Novato, California.

SPENCER MICHELS: From outward appearances, the city of Novato in Marin County, California, is a harmonious, prosperous, middle class suburb of San Francisco. Its 50,000 residents are 85 percent white and have a high level of education. But recent events, crimes with racial overtones, have forced this community to reexamine itself. Last November, what police describe as a textbook hate crime took place in this suburban shopping center. A 23-year-old Chinese- American man was stabbed four times by a young white man who was unemployed and who had declared "I'm gonna go kill me a Chinaman." The entire San Francisco Bay area was shocked. The crime at this site was not unique. A new study by the state attorney general reports 672 hate crimes in this state alone in a six-month period, 72 percent of them race-related, 18 percent related to the victim's sexual orientation. Nationwide, the FBI found nearly 6,000 hate crimes in 1994. Yet, Novato seemed an unlikely place for a hate crime. Bakery worker Karen Carpenter witnessed the attack.

KAREN CARPENTER: Actually when I first saw it I thought it was a joke. This is Novato. This is not a--not a place where you feel unsafe in a parking lot, and I saw the knife, and I kind of looked at it, and I watched him stab him in the back, and I kind of--

MR. MICHELS: The injured man, Eddie Wu, ran into the store, where clerk Fred Martin was working.

FRED MARTIN: The suspect came in and stabbed him two to three more times in the lobby. Then he left the store with his knife. I went--I and another associate went after him.

MR. MICHELS: With the help of store employees, Robert Page, an unemployed musician, was captured by police and interrogated. Novato Captain Reggie Lyles.

CAPT. REGINALD LYLES, Police Department: It was an unsolicited, unwarranted, totally malicious act of violence on an innocent person.

MR. MICHELS: What was the motivation?

CAPT. REGINALD LYLES: Purely because Mr. Wu was of Asian descent.

MR. MICHELS: How do you know that?

CAPT. REGINALD LYLES: Well, Robert Page stated that he wanted to kill a Chinaman.

MR. MICHELS: From the start, Novato police treated the stabbing as a hate crime, one of about ten racial incidents they've had in the past two years. They thought at first the suspect might be a member of a hate group like the Ku Klux Klan, but that proved wrong.

PROF. HOWARD PINDERHUGHES, Sociologist: The fact of the matter is, is that that's the minority of the cases of hate violence and bias-related violence in our country.

MR. MICHELS: Howard Pinderhughes is a University of California sociologist who has studied hate crimes and violence.

PROF. HOWARD PINDERHUGHES: The level of anxiety for these young people is incredibly high, and what you find is that this anxiety, these fears get channeled against different groups. These young people in Novato see themselves as white youth who are in this community who have a problem with, uh, the encroachment of Chinese, perhaps Latino, perhaps other immigrant groups who are disturbing the safe, kind of the ethnic niche that's been, that's been established there.

MR. MICHELS: According to Novato resident Dennis Sato, a Japanese-American, racism has always lurked beneath the surface. He is chairman of the Marin County Human Rights Commission.

DENNIS SATO, Human Rights Commissioner: Well, I think Novato and Marin County, there's always been racism on a more subtle basis here. We have politicians here that are using for their own agenda to create a more xenophobic atmosphere here, blaming all the woes of the country and economics on minorities.

MR. MICHELS: In February, Robert Page pled guilty to attempted murder as a hate crime. His victim has recovered, but Novato is still shaken, and so is the Asian community here and elsewhere. The National Asian-American Legal Consortium has found in one year a 35 percent increase in hate crimes against Asians, a growing minority on the West Coast. Ann Noel handles hate crimes for California's Civil Rights Agency.

ANN NOEL, California Civil Rights Agency: I think that a lot of people view Asian-Americans as threatening to them, taking jobs away. It is a matter of scarce resources. Umm, the Asian-American community has been held up as the "model" minority, and that's threatening to some people.

MR. MICHELS: Noel points to this Novato city council meeting broadcast live on cable as a good example of the whole community combatting racial violence.

SPOKESMAN: Eddie Wu is alive and well because of the actions of the citizens that we honor here tonight.

MR. MICHELS: The idea was to bring the community together and not sweep under the rug the fact that the town had a hate crime.

SPOKESMAN: Fred John Martin, for his bravery and his selfless act of courage. [applause]

ANN NOEL: If community leaders, the politicians go to that person and say we're not going to tolerate this, hold a town meeting, and really set up some kind of support network for the, the victim of the hate violence, it makes a big difference.

MR. MICHELS: While Novato has publicly condemned hate crimes, Human Rights Commissioner Sato believes the suburban schools must do more to promote understanding.

DENNIS SATO: Hopefully, we'll be able to develop a curriculum that will address not only the value in a diversity and--but also, uh, learn a little bit about managing diversity. I think that's what's lacking right now in our schools.

MR. MICHELS: At Novato's San Marin High School, as in many suburban schools, diversity is limited. Teaching about other cultures has been spotty. Vice Principal Bill Stiveson.

BILL STIVESON, High School Vice Principal: We do all we can through, oh, multicultural weeks and, and it's a continual kind of thing. I just told you--I just read a thing about Ramadan on Monday and explained to everybody about the Muslim, you know, holy time, and, uh, at Christmas, we have a Christmas Tree and a Menorah, and also we talk about woman's rights and liberation, and so it's just a--it's new for me.

CAPT. REGINALD LYLES: [in meeting] But we don't--we only have a certain amount of time. Uh, we don't have any political power.

MR. MICHELS: Police constantly wrestle with the new diversity in their communities. These officers from various jurisdictions are also trying to coordinate their efforts at combatting hate crimes. Novato's police chief says that hate offenders must be sent a message.

CHIEF BRIAN BRADY, Police Department: That we're not going to tolerate that kind of activity in our community. You can't legislate an attitude, unfortunately. I mean, it's just not going to make a difference. You sure as heck can deal with behavior. If the behavior is unacceptable, anti-societal, the community won't stand for it, then they'll stop.

MR. MICHELS: But some Novato residents say police are not tough enough when they find individuals committing racial violence. Eugene Chun alleges his son was beaten up in a racial incident.

EUGENE CHUN: They started to call him "Chink, Chinaman, Gook, go home to China where you belong."

MR. MICHELS: Chun thinks the police too often protect hometown teens.

EUGENE CHUN: And you become the judge and jury on the street. I caught you. Okay. I'm not going to search you this time because this is your first offense, but I ever catch you again, I'm going to involve--or we're going to involve your parents. Well, that's not the way to do it. I mean, the way to do it is cite the person.

MR. MICHELS: So you're angry?

EUGENE CHUN: I am angry, and I am angry that--I'm angry that the kids are not going through the process, you know, the justice.

MR. MICHELS: Police acknowledge that tough enforcement is a key element in fighting hate crimes but they, like the schools and the community, are hard put to prevent racial violence that analysts agree is part of society, itself.

MR. LEHRER: Still to come on the NewsHour tonight, the minimum wage debate and the President of Poland. FOCUS - SMALL EXCEPTIONS?

MR. LEHRER: Now the battle over raising the minimum wage. Elizabeth Farnsworth has that story.

SEN. EDWARD KENNEDY, [D] Massachusetts: We're not talking about teenagers earning pocket money.

ELIZABETH FARNSWORTH: Sen. Edward Kennedy has been pressuring Republican leaders since early spring to allow an up or down vote on increasing the minimum wage. He vowed to attach his bill to every piece of legislation that came to the floor until he got that vote.

SEN. EDWARD KENNEDY: And it's callous, and it's wrong.

MS. FARNSWORTH: And his persistence has paid off.

SEN. TRENT LOTT, Majority Leader: Under the consent agreement reached, there are a limited number of amendments in order to that bill. Any votes ordered on the amendments will occur at 2:15 on Tuesday.

MS. FARNSWORTH: The Kennedy proposal is similar to the bill passed by the House of Representatives in May. It increase the minimum hourly wage--currently $4.25--by 50 cents this year and another 40 cents next year until it totals $5.15. But an amendment by Missouri Republican Kit Bond would dilute the effects of a minimum wage hike. Sen. Bond wants to exempt from the increase employees of businesses with less than $500,000 in annual revenues. He wants to delay the effective date of a minimum wage increase until January 1, 1997, and he wants to create a sub-minimum wage of $4.25 an hour, which employers could pay all new workers during their first six months of employment.

SEN. KIT BOND, [R] Missouri: Mr. President, this is an amendment that merely carries out the intent that Congress has shown on many occasions to exclude the smallest of the small employers from the burdens of a minimum wage.

MS. FARNSWORTH: But Sen. Kennedy insists the Bond amendment would effectively kill a minimum wage increase.

SEN. EDWARD KENNEDY: President Clinton is correct to say that he will veto a minimum wage increase that contains any of these Republican tricks. Make no mistake, a vote for the Bond amendment is a vote to kill the minimum wage increase for now and for the foreseeable future.

MS. FARNSWORTH: Now two perspectives on the minimum wage and the Bond amendment from Senator Christopher Bond, chairman of the Small Business Committee, and Labor Secretary Robert Reich. Thank you both for being with us. Gentlemen, let's go through the provisions of the Bond amendment one by one. First, Senator, the exemption for businesses with less than $500,000 in yearly sales, why is this necessary, in your view?

SEN. CHRISTOPHER BOND, [R] Missouri: It has been the bipartisan position of Congress in the past that it makes sense to exclude the smallest employers from an increase in the minimum wage. As a matter of fact, my Democratic colleague and former chairman of the Small Business Committee, Sen. Dale Bumpers, introduced in 1991 a measure which excluded small businesses under 362,000 or 500,000 from the minimum wage altogether. This just says for the very small businesses with gross incomes of less than $1/2 million they won't have to pay the increase in the minimum wage contained in this bill.

MS. FARNSWORTH: Why shouldn't they have to?

SEN. BOND: Because many of them, frankly, cannot afford to do so. I have listened to small businesses all around this country. And they have a tough time making, making a profit and staying in business with all of the government mandates already on their back. And many of them say that an increase in the minimum wage would require them to fire workers or at least not hire workers. They would be denying jobs to the ones most in need of a job, the teenager just getting a start, the person coming off of welfare, the person who is at the bottom of the economic rung right now and needs the first step up on the ladder. That's what small businesses have done in the past, is to hire these beginning workers or the workers needing training. And more than a 20 percent increase in the minimum wage would hurt many of these businesses and certainly cost jobs in those businesses.

MS. FARNSWORTH: Sec. Reich, the President has said that he'll veto any bill with this provision in it. Why?

ROBERT REICH, Secretary of Labor: Elizabeth, because, first of all, 8,500 dollars a year, which is what a full-time minimum wage worker earns working five days a week, eight hours a day, fifty weeks a year, that's just simply not enough to live on whether you are working in a small business or middle sized business or working in a large business. But secondly, because we have no objection to the current minimum wage exclusion for very, very small businesses, mom and pop operations that's in current law, but Sen. Bond's provision would substantially increase this to include workers in 2/3 of American businesses, and that is just too broad an exclusion. Again, the minimum wage is $8500 a year. You can't do it on $8500 a year. And it is reaching a 40-year low, adjusted for the real purchasing power of the dollar. If we want to get people off of welfare and into work, and a lot of very low wage people, a lot of people at the minimum wage are struggling to stay out of welfare, many of them are working for smaller and medium-sized businesses, we've got to make sure that work pays.

MS. FARNSWORTH: Senator, what about that? Would 2/3 of the workers currently earning the minimum wage be excluded by this?

SEN. BOND: No. Those, those figures are, are totally out of the air. We can't get any better figures from the Bureau of Labor Statistics, but, uh, the best information we have is that probably less than, less than a million workers are minimum wage workers at small businesses earning less with, with revenues less than $500,000. The figures are, when you talk about 2/3 of the businesses, you're talking about many small businesses but a very small number of workers. And when the Secretary says he wants to get people off of welfare, if you price these jobs out of the market, if that small grocery store that has 10 employees now can- -and can only afford the payroll for 10 employees gets a 20 percent increase in its, in its wage cost by reason of this minimum wage, they're going to have to cut 20 percent of their workers. If they had ten workers, they'll have to cut back to eight workers.

SEC. REICH: Senator, if I may, you will concede--

MS. FARNSWORTH: Mr. Secretary.

SEC. REICH: --Senator, you will concede that your small business exception is broader than the small business exception under current law.

SEN. BOND: Small business exception under current law has essentially been vitiated by the broad application of commerce. It's, it's really not workable. It goes back to the basic intent as expressed on a bipartisan basis by member--members of Congress who said that they really did want to exempt the smallest of small businesses from minimum wage.

SEC. REICH: I hear you saying you would concede that it is broader than the current exemption.

SEN. BOND: Well, the current exemption is meaningless.

MS. FARNSWORTH: Okay. I want to move on. The provision which permits employers to pay all new workers a sub-minimal wage of $4.25 for their first six months. In your view, Senator, why is that necessary?

SEN. BOND: The House proposed a minimum wage only for teenagers, the Secretary has said, I mean, a sub-minimum wage, a training wage only for teenagers.

MS. FARNSWORTH: Well, the House--

SEN. BOND: We're saying--

MS. FARNSWORTH: Let me just clarify the House's bill said that it would be, that employers would be allowed to pay anybody under the age of 20 for 90 days a sub-minimal wage.

SEN. BOND: Right. What we're talking about is the need to get people off of welfare, and giving people who are just getting started an opportunity to get a job that wouldn't be there at $5.15 an hour is one of the steps that we are taking to ensure that people do get off of welfare. Reforming welfare so people can get into the work force is vitally important.

MS. FARNSWORTH: Secretary Reich--

SEN. BOND: And I think that this--this training wage helps not just the teenagers but others who need to get into the work force for the first time.

MS. FARNSWORTH: Now, Secretary Reich, I think the President has said he would veto a bill that had this in it.

SEC. REICH: Yeah. The problem here is it's not a training wage. No training is required, and it applies to all workers, not just young people, but all workers who are in a job less than six months. Many minimum wage workers change jobs quite often, and the net effect of this provision according to calculations that come from the Bureau of Labor Statistics is that over half of all minimum wage workers now at the minimum wage would be denied any increase because of this provision. 42 percent of everybody who would qualify for an increase if we succeeded in getting an increase in the minimum wage up to $5.15 would be essentially excluded because of this provision. And secondly, this provision would give an incentive to businesses to essentially churn their work forces. Once somebody got up to six months, the business would have incentive to fire that person and bring on another person until that second person had reached that six months limit. This, again, given that the minimum wage is heading toward a 40-year low, Elizabeth, and also given that $8,500 a year, which is the full- time minimum wage workers now--their earnings--is not enough for somebody to live on. Again, why nickel and dime minimum wage workers like this? Let's just have a clear, clean vote without these kinds of exclusions.

MS. FARNSWORTH: Sen. Bond, nickel and diming?

SEN. BOND: I don't think that clear, clean vote means anything when the, the people who are on minimum wage, the young, half of them are under 25, there are part-time workers. These workers need an opportunity to get onto--onto the rolls. There is unemployment compensation. There are welfare provisions in many of the states to assist people who are truly in need and there are food stamps and other things to assist those people who are just getting started. What you're--what you do if you don't have the training wage is make a very high entry barrier for a business who wants to hire somebody to get them off of the welfare rolls, or to get a person started in the first job. I think a training wage is something that's been supported on a bipartisan basis in the past, and I trust and hope that my colleagues will support it this time.

SEC. REICH: Elizabeth, if I may--

MS. FARNSWORTH: Yes.

SEC. REICH: --in the current law, there had been a three-year sub-minimal wage for teenagers, very young people, and it was very rarely used. Only 1 percent of businesses actually used it. What Sen. Bond is proposing is a sub-minimal wage for all workers in the first six months. And, again, this is going to cut out a lot of people. If I may just simply point out, and I think this is very central to this discussion, this chart shows what has happened to the minimum wage adjusted for inflation over the past 30 years. And we are now at a point which is almost at a 40-year low. If you see over here at the far end of my chart, we are at in 1996 almost a 40-year low. Now, all these exclusions that the Senator is seeking, the exclusion with regard to people in the first six months, the exclusion which substantially broadens the small business exclusion, other exclusions which we may have time to talk to, all of them are robbing a minimum wage worker who is now at a 40-year low, nearly a 40-year low, of a raise that is absolutely necessary to live on.

MS. FARNSWORTH: Senator--

SEC. REICH: There's simply no way that people are going to get off welfare and into work. There's no way we're going to have even a possibility of a livable wage--

MS. FARNSWORTH: Senator--

SEC. REICH: --if we stick to this kind of a wage structure.

SEN. BOND: I'm sorry the Secretary--

MS. FARNSWORTH: Sen. Bond, let just interrupt one second. We have very little time, but--

SEN. BOND: Okay.

MS. FARNSWORTH: --respond to that, and why have a minimum wage with so many exceptions?

SEN. BOND: Well, there are not that many exceptions. As the Secretary so glibly overlooks, by raising the minimum wage, you may be robbing many people of that job. When we're talking about jobs, we're talking about the productivity of the worker and how much it costs. For a worker just getting started, a training wage is a way to make it worthwhile for an employer to hire a first-time worker, somebody who's just getting into the work force. The Secretary's blanket imposition of a minimum wage on the smallest businesses would force some of the smallest businesses to cut workers and it would by denying the training wage, you would make it more difficult for the worker who is just getting started to get an opportunity to get a job. And that's what we ought to be pushing for in this, in this time when we want people on the, on the work rolls, not the welfare rolls.

MS. FARNSWORTH: Sec. Reich, just very briefly, a response.

SEC. REICH: In 1938, this country made a deal with its work force--no child labor, at least very young children, and we would have the minimally decent, livable wage. We are in the process of reneging on that deal, Elizabeth. The minimum wage is, is heading toward a 40-year low. You can't live on $8500 a year. It's not fair. This is an issue not just of economic security. It's also a basic issue of fairness in this society, and Sen. Bond wants to whittle away and cut and play a kind of a--with due respect--a kind of a cruel shell game, which looks like minimum wage will be increased but more than half of the people who otherwise would get an increase will simply not if his amendment goes through. A vote for his amendment is a vote against the minimum wage increase, and let there be no mistake about that tomorrow.

MS. FARNSWORTH: Okay, gentlemen, thank you very much for being- -

SEN. BOND: On a bipartisan basis, Democrats have said we need those exemptions in the past, and I hope they will agree again.

MS. FARNSWORTH: Thank you very much for being with us, gentlemen. CONVERSATION - EMERGING DEMOCRACY

MR. LEHRER: Finally tonight a conversation with the President of Poland who's in Washington meeting with President Clinton. Charles Krause has that story.

CHARLES KRAUSE: This victory party last November was for Aleksander Kwasniewski, a former Communist whose new party, the Democratic Left Alliance, includes former Communists as well as other opponents of Poland's rapid post-Communist economic reform. Kwasniewski came to power after defeating Poland's first post- Communist President, Lech Walesa in a startling twist on the country's road from Communism to democracy. Walesa, the hero of Solidarity, led the fight against Communism in Poland in the 1980's. In June 1989, he and his Solidarity allies won the first open election held here since the imposition of Communism in 1945. That election foreshadowed the beginning of the end of Communism in Central Europe, as well as in Russia, itself. Poland's 39 million people share Western borders with Germany, the Czech Republic, and Slovakia. To the East are two newly formed countries that were formerly part of the Soviet Union, Ukraine and Belarus. A tiny piece of the Russian Republic, Laliningrad, is to the North,on the border with Lithuania. The rest of Russia looms over the horizon. Today, as always, Poland's security and in many ways its destiny are largely determined by its geography. Poland's economy under Walesa grew faster--5 1/2 percent a year--than any of Poland's European neighbors. And many economists cite Poland as a model for the successful transformation of the Communist state into a market economy. Foreign investment virtually nil before 1989 now tops $10 billion, and U.S. companies lead the way with about 1/5 of the total. Still, not all Poles did well under Walesa's fast- paced economic reforms and mass privatization. For many workers in old factories and for pensioners, it was a time which brought declining wages, a falling standard of living, and high unemployment. During last year's campaign, Kwasniewski was able to capitalize on the economic discontent and succeeded in getting a clear majority among the unemployed. Kwasniewski is just 41, the first Polish leader without living memory of the brutal destruction of Poland by the Nazis in World War II, and the imposition of Communism by Stalin in the immediate post-war period. He's widely traveled, college-educated and speaks English, German, and Russian. He ran a well-financed western-style campaign complete with a slogan "Let's choose the future."

ALEKSANDER KWASNIEWSKI, President, Poland: Myself and my generation thought that we can change the system; we can make reforms in the system.

MR. KRAUSE: Despite some of his rhetoric during the campaign, in office Kwasniewski has embraced many of the economic reforms begun by Walesa. He also agrees with Walesa that Poland's top foreign policy priorities should be membership in the European Union and NATO, a goal President Clinton endorsed on a trip to Poland two years ago.

PRESIDENT CLINTON: Bringing new members into NATO, as I have said many times, is no longer a question of whether but when and how.

MR. KRAUSE: Last week, Mrs. Clinton visited Poland, emphasizing ties between the two nations. Some 10 million Americans of Polish descent live in the United States, many of them in Midwestern states critical to the President's prospects in the upcoming election. Mrs. Clinton was accompanied by Kwasniewski's photogenic wife, Jolanta. She, like Mrs. Clinton, is a lawyer who's involved and ready to speak out on public issues. At the White House this morning, the President said Mrs. Clinton had briefed him on her visit to Poland. He also reaffirmed his commitment to Poland's eventual membership in NATO but refused to be drawn into committing himself and the administration to a specific date.

PRESIDENT CLINTON: The important thing is that NATO is going to expand and we're going to do it in a deliberate fashion and an open fashion, as we have said all along.

MR. KRAUSE: President Kwasniewski will meet with members of Congress and leading U.S. businessmen before returning to Poland on Thursday.

MR. KRAUSE: Mr. President, thank you for joining us. Welcome. Let me begin by asking you why is membership in NATO so vitally important for your country?

ALEKSANDER KWASNIEWSKI, President, Poland: Well, I can say many reasons. The first one is very simple. Of course, Poland needs very effective guarantees of the security, but more important is that Poland wants to organize and to be participant in a new system of European security, and I think NATO enlargement, a new NATO, that is a very important stage, and this process and this way which we started seven years ago in Poland and this process of democracy, of integration of Europe, a unification of Europe, how President Clinton said today had very special stages. The first one was collapse of the Soviet Union, collapse of Warsaw Pact. The next one was unification of Germany and now is, is a time to enlarge NATO, to organize new architecture of European security. That is the real reason why we want to be in NATO.

MR. KRAUSE: Some have suggested that perhaps the reason is that Poland views Russia as a continuing threat. Is, is that what this is all about?

PRESIDENT KWASNIEWSKI: No, no. It's absolutely wrong approach. Poland wants to be in NATO, not against Russia. We want to have strategic partnership with Russia. I was in Russia in April this year. I discussed this question with Russia's partners, and of course, we are absolutely interested to have the best relations with our Eastern neighbors, new neighbors, because in your movie you show that Poland had three neighbors before '89, and now we have seven new neighbors--Russia, Ukraine, Belarus, Lithuania, Slovak Republic, Czech Republic, Germany. And I think with everybody we have very good relations, and we can continue such very positive, very stabilizing regional policy.

MR. KRAUSE: I understand what you're saying, but let me ask you another question. Do you think that President Yeltsin's victory has reduced tensions and perhaps even reduced the urgency of Poland becoming a member of NATO?

PRESIDENT KWASNIEWSKI: I'm sure that this victory is good news, is a very positive element for European integration, and reduced fears and problems, because Mr. Yeltsin's victory means Russia is going to be more democratic, more free market, and economy- oriented, more open country than before. So I think that is very good news, and I think this very positive and really democratic, a very fair election in Russia, with the huge participation of the voters in the election, should encourage everybody to make next steps in this way of European unification.

MR. KRAUSE: But it doesn't make any difference in terms of Poland's desire to be part of NATO?

PRESIDENT KWASNIEWSKI: Well, I'm sure that not only--I'm sure that our contribution in all these international relations, ties in last years is absolutely positive, and Poland tried to make what is possible to show that enlargement of NATO from American point of view, it means no more troubles. It means more stability, more cooperation, more dialogue in Europe.

MR. KRAUSE: Do you think--do you think that Russia has now come to terms with Poland's membership in NATO and, in fact, is willing to accept it?

PRESIDENT KWASNIEWSKI: Well, I hope so, that we can discuss this question. We will explain our intentions, but I'm sure that it is on the American side, on the side of western partners, because we understood the situation. Before the election, it was very difficult and maybe not very diplomatic to discuss NATO enlargement, but we are after the election and Russian election is successful, is positive, and then I think is the time to say what should be next step, and in my opinion, this arguments I used today in discussion with President Clinton, these steps should be enlarge NATO, open the doors for a new NATO, for new countries, because it means, it means cooperation. It means dialogue. It means more security. It means more confidence.

MR. KRAUSE: Why do you think the Clinton administration has been so reluctant then to, to agree to a timetable, to a date?

PRESIDENT KWASNIEWSKI: Well, I think we discussed the question of date today as well, but we said that for this process maybe it's better to, to be careful and to discuss this problem with many partners because let's understand decision about enlargement of NATO is a decision not only of the United States; it's a decision of 16 members of NATO. And this decision must be approved by parliaments. I think we need time, but very short time, to say what, what--what is the real schedule, what is timetable of this enlargement. In December this year, there will be a meeting of the ministers, and I think this meeting, December's meeting, should give us the answer where is very concrete timetable of, of this opening of NATO.

MR. KRAUSE: Do you expect that Poland will be a member of NATO by the year 2000?

PRESIDENT KWASNIEWSKI: Absolutely, yes. Absolutely. And I think- -I see this question as my task as a President, but I see more-- that's in my opinion a task of new generations of the politicians. I think that is absolutely a challenge of President Clinton, as well, because some of American Presidents made a lot to change the situation in Europe. Mr. Reagan participated in the collapse of Soviet Union and Communism. Mr. President Bush was very active in Germany unification, and now is the time to--to unify--to unite, to make Europe--and I think that is--that is the real challenge for President Clinton.

MR. KRAUSE: Let me ask you a couple of questions about your own political background. You joined the Communist Party in 1977. Why did you remain in the party after 1980, when Solidarity was born?

PRESIDENT KWASNIEWSKI: Well, it was, you know, Polish Communism, it was different than Soviet Communism or German Communism--or Czechoslovakian Communism. So I think in seventies Poland and myself I felt it is possible to reform the system, and in eighties, it was absolutely sure for me that we should reform the system. And, of course, it was two ways. One way was Solidarity, which was a position. The second one was reformed Communist Party in Poland. I chose the second way. And, of course, I had huge respect of my colleagues and today some opponent. In Solidarity's day, they tried, they changed the system from the opposition side, but I think that without reformers in the party, it would be very difficult to have such smooth way by dialogue, by roundtable talks to reforms, to reform Poland without victims, without that, without huge costs like in other countries like Romania, for example.

MR. KRAUSE: We just have a couple of seconds left. I'd like to ask you--your own foreign minister has said that he believes the West is protesting you and other members of your government, the former Communists. Do you think that this trip will help alleviate any lingering questions about your views?

PRESIDENT KWASNIEWSKI: Time is going. We are seven years after Polish reforms. And if you see Poland, you can see that progress, you can see growth of the economy. You can see civilian society. You can see democracy. You can see political pluralists. And everything has happened with our participation, so I think today it's not a good time to discuss history. We can't change the history, but we can organize good future for us, for a new generation in Poland, and for good relations, a good partnership between Poland and the United States. That's my task. History is behind. Future is, is a task, is a real challenge.

MR. KRAUSE: Mr. President, thank you very much.

PRESIDENT KWASNIEWSKI: Thank you very much. RECAP

MR. LEHRER: Again, the major stories of this Monday, a war crimes prosecutor called for the arrest of two Bosnian Serb leaders, but the commander of NATO forces in Bosnia, Adm. Leighton Smith, said on the NewsHour he has no mandate to arrest war criminals. And the Senate began debating a minimum wage bill. A vote is expected tomorrow. We'll see you tomorrow night. I'm Jim Lehrer. Thank you and good night.