The MacNeil/Lehrer NewsHour

Intro

ROBERT MacNEIL: Good evening. Here are today's news headlines. Secretary of State Shultz said U.S. goals in Central America are like those in Vietnam. The budget debate opened in the Senate with a test vote due tonight. West German Chancellor Helmut Kohl said President Reagan's planned visit to a German war cemetery is a noble gesture. Doctors say the death of artificial heart patient Jack Burcham is not a setback for their program. Jim?

JIM LEHRER: On the NewsHour tonight there are three focus segments after we summarize the news of the day. Focus one: a debate over the "Central America is another Vietnam" claim by Secretary Shultz. Focus two: the coming fight over President Reagan's and the Republicans' plan for trimming Social Security. And focus three: a report by correspondent June Massell on art in public places. News Summary

LEHRER: Secretary of State Shultz said today Central America is turning into another Vietnam. He said the Sandinistas of Nicaragua, like the Vietnamese communists 10 years ago, have become a threat to their neighbors and must be firmly dealt with. Shultz was clearly annoyed over last night's House vote to deny $14 million in aid to the anti-Sandinista contra guerrillas in Nicaragua. He spoke at the State Department at a ceremony marking the 10th anniversary of the fall of Saigon.

GEORGE SHULTZ, Secretary of State: The litany of apology for communists and condemnation for America and our friends is beginning again. Can we afford to be naive again about the consequences when we pull back, about the special ruthlessness of communist rule? Do the American people really accept the notion that we and our friends are the representatives of evil? Our goals in Central America are like those we had in Vietnam: democracy, economic progress and security against aggression. Just as the Vietnamese communists used progressive and nationalistic slogans to conceal their intentions, the Nicaraguan communists employ slogans of social reform, nationalism and democracy to obscure their totalitarian goals.

LEHRER: In Nicaragua today, President Daniel Ortega praised the House vote as a favorable gesture toward a peaceful solution. He also said 100 Cuban military advisors will leave the country next week and 107 political prisoners will be pardoned, and he confirmed a Soviet news report that he would visit Moscow later this month. The House majority whip, Congressman Tom Foley, and Republican Congressman Newt Gingrich will disagree over the meaning of the Nicaragua vote, among other things, in our lead focus segment tonight. Robin?

MacNEIL: The Senate plunged into the battle of the budget today, and Majority Leader Robert Dole moved to capitalize quickly on President Reagan's televised speech last night. The President urged Americans to get behind the $52 billion package of budget cuts he and Senate Republicans have agreed on. Senator Dole planned a quick vote for later tonight to test whether the package might pass unscathed. He said he was fairly close to the necessary 51 votes, although many Democrats and some Republicans object to many of the proposed cuts. This morning, at a meeting of a coalition of business groups, Dole and Budget Committee Chairman Pete Domenici emphasized the importance of the GOP plan.

Sen. ROBERT DOLE, Senate Majority Leader: We have to demonstrate right up front that we're serious about deficit reduction. We have to indicate to these 234 groups that have placed their confidence in this package that we're going to try to do it. And it would seem to me that it's a vote that everybody ought to support.

Sen. PETE DOMENICI, (R) New Mexico: I think the President was right on last night. This is a historic event. If we don't want to do it, the American people are going to find out that we aren't interested in their future, that we're more interested in protecting and preserving some programs that we flat can't afford, some programs we wouldn't even dare put on the agenda of federal programs if we were starting them today.

MacNEIL: After this news summary, we have a major focus section on the most contentious issue in the GOP package: limiting cost-of-living adjustments for 36 million Social Security recipients.

LEHRER: Jack Burcham, one of the men with an artificial heart, is dead. He died last night at Humana Hospital in Louisville. Burcham was a 62-year-old railroad engineer from Le Roy, Illinois. The mechanical heart was implanted in his chest 10 days ago. His death was a result of extensive internal bleeding and blood clots that interfered with the pumping of the heart, a condition known as cardiac tamponade. Elaine Lepe of WHAS in Louisville reports on his death.

ELAINE LIPE, WHAS-Louisville [voice-over]: Doctors were alerted to the problem known as cardiac tamponade by a nurse who noticed a change in the sound of Burcham's heartbeat. The Illinois man's problems were complicated by acute kidney failure and a compressed lung. Dr. William DeVries says he was frustrated when he arrived at the hospital to find there was nothing he could do to save Burcham.

Dr. WILLIAM DeVRIES, artificial heart surgeon: There was a sense of frustration and worry as to what was going on and is there something we can do. And we're all very, of course, saddened when we found that there really was nothing more we could do.

LIPE [voice-over]: Burcham's oldest son, Jack, says in their time of grief the family is comforted by knowing their dad helped doctors learn things that will help others.

Dr. DeVRIES: Mrs. Burcham, when I told her of the -- what had happened and informed her of the autopsy finding, she mentioned that although she was sad, she wanted to know if it would help other people. And the answer to that is yes, it would.

LEHRER: Later in the day Dr. DeVries said the hospital will be not deterred from the heart implant program and will proceed as planned with another operation.

MacNEIL: In West Germany, Chancellor Helmut Kohl publicly thanked President Reagan for agreeing to visit a German military cemetery next month. There was no indication that the Germans would cancel the visit, which has been criticized by Jewish and veterans' groups in the U.S. Speaking to the West German Parliament, Kohl said Reagan was making the noble gesture of a friend. The chancellor also expressed regret that the President was facing difficulties at home because of it. Later the Parliament voted on a proposal to cancel the cemetery visit, and the measure was defeated by a landslide. A proposal to rebuke Kohl also failed. In Washington, President Reagan's spokesman refused to answer questions about the cemetery visit, but said the President's plans had not been changed.

In East Germany there was a celebration today on the 40th anniversary of the day when American and Soviet troops met on the banks of the Elbe River and cut Nazi Germany in two. Here's a report from Michael Cole of the BBC.

MICHAEL COLE, BBC [voice-over]: They returned in air-conditioned coaches and they brought their wives -- veteran GIs of the 69th Armored Division welcomed back to Torgau by Young Communist Pioneers. All very different from 40 years ago. Then it was jeeps and armored troop carriers, and there to greet them on the banks of the Elbe, Red Guards of the First Ukrainian Army.

NEWSREEL ANNOUNCER: East and West have met. This is the news for which the whole Allied world has been waiting.

COLE [voice-over]: And this was the moment they met again, old soldiers of the Red Army and their Allied brothers in arms.

1st VETERAN: Yeah, it was impressive. Impressed by the Russian girls that were soldiers, you know.

2nd VETERAN: There was much hugging and kissing, and food galore, and of course little liquid refreshments of varying sorts.

COLE [voice-over]: Red Army generals today watched as the Russian and American old soldiers walked together towards the Russian War Memorial. Wreaths were laid by both sides. And there were more pictures, the trick being to get a young guard lieutenant to smile.

MacNEIL: Mikhail Gorbachev, the Soviet leader, sent a greeting that the United States and Britain boycotted the affair because a U.S. Army major was shot by a Soviet guard in East Germany last month.

In South Africa, 16 leading opponents of apartheid were charged with treason. Specifically, they were accused of sympathizing with outlawed groups that called for overthrowing the government by force. Once again there was violence in at least a dozen black communities, and one black man was killed by a bomb explosion. Central America: New Vietnam?

LEHRER: The occasion was the 10th anniversary of the fall of Saigon. The message: the awful history of Vietnam is repeating itself in Central America. In a State Department speech, Secretary of State Shultz used the toughest language yet to make that analogy and make the case for supporting the contra guerrillas in Nicaragua. The House of Representatives rejected the administration argument yesterday, putting the aid question in limbo for the present. The strong Shultz counterattack is the centerpiece of our lead focus segment tonight on the House vote's aftermath. Here first are the key excerpts from what Shultz had to say.

GEORGE SHULTZ, Secretary of State: Broken promises, communist dictatorship, refugees, widened Soviet influence, this time near our very borders. Here is your parallel between Vietnam and Central America. Brave Nicaraguans, perhaps up to 15,000, are fighting to recover the promise of the 1979 revolution from the communists who betrayed it. They deserve our support. They are struggling to prevent the consolidation and expansion of communist power on our doorstep, and to save the people of Nicaragua from the fate of the people of Cuba, of South Vietnam, Cambodia and Laos. Those who assure us that these dire consequences are not in prospect are some of those who assured us of the same in Indochina before 1975. Today we remember a setback. But the noble cause of defending freedom is still our cause. Our friends and allies still rely on us. Our responsibility remains.

America's armed forces are still the bulwark of peace and security for the free world. America's diplomats are still on the front line of efforts to reduce arsenals, settle conflicts and push back the danger of war. The larger lesson of the past decade is that when America lost faith in herself, world stability suffered and freedom lost ground. This must never happen again.

LEHRER: We discuss the Shultz message among others now with the number three man in the House Democratic leadership, Congressman Tom Foley of the state of Washington, and with one of the leading conservative voices in the House, Congressman Newt Gingrich, Republican of Georgia.

Congressman Foley, first, do you agree with Secretary Shultz' Vietnam-Central American analogies?

Rep. TOM FOLEY: Not with the direction of the secretary's remarks. But it's possible that there is a Vietnam analogy here, and I think if we learned anything in Vietnam, it's not to use military force without a strong support, overwhelming support of the American people; without an opportunity to exhaust every other course of action to change the situation; without then clearly sufficient force to accomplish the purposes without a prolonged and devastating and divisive result, inconclusive and even counterproductive to our aims. In the vote in the House this week, Republicans joined Democrats in rejecting the idea of military assistance to the contras. That was a vote in which 40 Republicans and 40 Democrats switched position, 40 Democrats supporting the administration and 40 Republicans opposing it.

But it was clearly, I think, not the $14 million that was at stake. But what was involved here was an effort by the administration to have a kind of a Gulf of Tonkin resolution, to have us commit this country through the Congress to a military option to overthrow the government of Vietnam -- of Nicaragua. And in doing so, to symbolize a declaration of war, indirect, through proxies, in Nicaragua to overthrow that state. Now, before we agree to do that as a Congress and as a people, we ought to listen to the wisdom, I think, of Secretary Weinberger, who says only use military force when you've exhausted every other purpose and prospect, when you have a clear objective, when your objective will only be achieved by military force, when you have a united position of the American people. On each one of these the contra issue fails. Most people don't support it. It's caused as many problems so far as it's solved -- more, it's caused more problems than it's solved. It's led to the Soviet influence, it's led to the militarization of the state. Things we don't like, that none of us that I know in the Congress, in Nicaragua. It's not working, it's dividing the country and we simply were unwilling to give this administration a carte blanche for a military solution that shows no prospect of success and much prospect of failure.

LEHRER: Congressman Gingrich?

Rep. NEWT GINGRICH: Let me pick up on that, because I think that Tom Foley has said something very profound here tonight. I think we're at a unique moment in American history where in a sense we may be reliving the Vietnam War in reverse. That is, the Vietnam War began softly, quietly, with a surface consensus, and then gradually disintegrated. We have begun with enormous discord over the last four years over the nature of Nicaragua, the nature of Communism, what's going on. The challenge -- and I think Secretary Shultz began to pick it up today -- the challenge to the Reagan administration is to come to the country with proof -- I brought a copy which I'm going to leave with you -- of the Grenada documents, which they published last fall, which we captured in Grenada, which was the first time we've ever captured a communist government. These are published by the State Department. When you read these, when you read documents out of Nicaragua, you begin to realize they really are communists, they really are allies of the Soviet Union. It really makes sense that the morning after we defeat a bill, Ortega would say, "I'm going to Moscow." And I think the challenge to America -- and in a sense we may literally find ourselves, as I say, reversing the Vietnam history -- is to first educate ourselves, confront the reality of the Soviet-Nicaraguan communist alliance, and then if that is true, if we can win a convincing case, I don't think there are enough ostriches left in either party that if the President can really drive home that case, if the secretary of state can drive home that case, that we're not going to be able to pass a much larger than $14 million bill.

LEHRER: Have they not done it yet? They haven't done it?

Rep. GINGRICH: No, they haven't done it. I think today's speech by Secretary Shultz is a decisive watershed and is in the tradition, frankly, of Harry Truman in the Greek-Turkey situation, of beginning to come back and say, "Look, this is what we really think. These are really people who hate America."

LEHRER: Well, what was the message? You heard what Congressman Foley said was the message of this vote yesterday in the House. How do you read the message?

Rep. GINGRICH: I think, and I'd like to get Tom's reactions, I think the message yesterday was mass confusion. We lost the night before 40 Republicans, as he said, against military. He got lost 40 Democrats for military. The next moment we pass the Barnes-Hamilton amendment, which was the weakest possible amendment.

LEHRER: That was to put the money through the Red Cross.

Rep. GINGRICH: Oh, that was -- I thought that was, in all candidness, slightly bizarre, that, you know, don't give it to the American government, give it to the U.N. or the Red Cross. But anyway, that barely passed. Then the Michel amendment, which was a little stronger and allowed Americans to spend the money, that barely lost. And then everybody on both sides, I think --

LEHRER: You all voted against that, the conservatives voted --

Rep. GINGRICH: Everybody, yeah.

LEHRER: And you all voted --

Rep. FOLEY: No, I voted for it.

Rep. GINGRICH: No, but the vast majority, what, three to one approximately?

Rep. FOLEY: More Democrats voted for it than Republicans. All but 17 Republicans voted against final passage, on the grounds that it was too weak.

Rep. GINGRICH: And what, 180 -- 150 Democrats. But the interesting thing I would say to you, and why this may be a historic moment, is that I think there may be something healthy for the country about both flanks suddenly saying, "We don't like anything we're doing. Let's just stop, not pass anything, and reopen the dialogue."

Rep. FOLEY: Well, let me tell you that Speaker O'Neill was called by the President -- this is public -- and the President --

LEHRER: When? When was it?

Rep. FOLEY: Yesterday. Before the vote, before the final vote. And the President complained about the direction of the votes in the House. The Speaker said he had no desire to embarrass the President and he offered to take the issue off the calendar and to have Hamilton and Mike Barnes, Mr. Hamilton and Mr. Barnes sit down with the State Department, with anybody, and try to work out a compromise if it could be reached. But the White House called back -- the President asked for some time to think about it. The White House called back in 20 minutes, said, "We want to go ahead with the vote." I think it's important to remember too that the humanitarian aid issue is somewhat disputed. I don't think we have many in our party who are against humanitarian aid. But if you design humanitarian aid to be anything that's not lethal, you can provide uniforms, you can provide transportation, you can -- and really the issue is whether you provide logistic support for an army in the field.

Rep. GINGRICH: That's right. And I think we're really at the nexus in that the one side would provide humanitarian aid because it can't get military aid. The other side --

LEHRER: Any kind of aid is better than no aid.

Rep. GINGRICH: That's right. The other side would offer humanitarian aid because we really can't quite walk off and do nothing. And what was really needed is, I think -- and this is why I mention the Grenada documents -- we need an intellectual argument for the next five, six, seven weeks, and we need to say to the administration --

LEHRER: Is that going to happen?

Rep. GINGRICH: I think it is.

LEHRER: Who's going to lead the argument?

Rep. GINGRICH: I think that the Shultz speech today is the opening salvo. And I hope it's not done in sort of a "Nah-nah-nah." I hope instead we can lay out a real framework where people can honestly say, "Here's the proof I need. If you have this proof and this proof and this proof. And here's the kind of program I would support, given that proof."

Rep. FOLEY: I think the last part is important too. We think, I think most of us who watch this, that the administration started out four years or three years ago saying that the aid to the contras was primarily to interdict supplies going to the guerrillas, the insurgents in El Salvador. Now in the weeks preceding this election [sic] it was very clear, everybody in the administration, speaking off the record but speaking, without attribution, said the purpose is to destabilize and end this government in El Salvador [sic].@1 One person says, "Unless they want to pick up and go to Cuba."

LEHRER: Nicaragua.

Rep. FOLEY: Nicaragua, I'm sorry. The Nicaraguas who want to get up and leave and go to Cuba. So it was clear that the issue here was supporting a military overthrow of the government of Nicaragua. Now, that's not perhaps unthinkable, and as Newt says, we ought to see whether the evidence exists for it. But the purpose is not humanitarian aid. The purpose is not to take care of the contras. The purpose is to get the United States behind a military overthrow of Nicaragua. And I think Newt's very fair in saying he believes that's necessary.

Rep. GINGRICH: That's right.

Rep. FOLEY: And he's willing to undertake it.

LEHRER: You don't think it is.

Rep. FOLEY: I think we ought to follow at least -- again I am not usually in a position of saying the secretary of defense is my witness here, but the secretary of defense, Secretary Weinberger, says use military force after you've exhausted other opportunities, when it's clearly in your national interest, when you can achieve your results by military force, when the country's united, and then use enough of it to get it done without creating a long disaster.

LEHRER: You're not disagreeing with that?

Rep. GINGRICH: No, no, let me answer. See, I think we're at an amazing crossroads for a second. I don't know if it'll last and we're going to agree much longer, but I think this administration three years ago was not honest with itself. It didn't deceive anybody else -- I think it kidded itself, because the nation --

Rep. FOLEY: Oh, I disagree, it deceived the Congress.

Rep. GINGRICH: But I also think it deceived itself in that it really didn't want to confront the reality that if this is a communist government, if they are really Leninist, committed to destroying America and committed to exporting revolution, then you're not talking about interdiction, then you're not supporting somebody in the countryside for interdictory purposes. And the first real battleground should have been on the Boland Amendment, because the Boland Amendment --

LEHRER: It stopped the military --

Rep. GINGRICH: -- stopped any effort to overthrow the government. And at that point the administration should have come forward and said, "Let us give you the data, either in secret or public, as to why this amendment is fundamentally flawed." Now, they didn't do that, and they have walked down this trail, and last night was the dead end of that particular trail.

Rep. FOLEY: Before we -- I would just argue that before you can make a convincing case to many members of Congress, and I think to the overwhelming American people, that we should use force to overthrow a government, you have to prove that the essential interests of the United States are at stake.

Rep. GINGRICH: That's right.

Rep. FOLEY: That national security of the United States is at stake, and not just that you don't like the government. We don't like lots of governments in the world.

Rep. GINGRICH: And that goes back explicitly, though, Tom, both to the Grenada documents and to the lesson of Vietnam. Because if the issue is Nicaragua, I'm not sure I care that much. If the issue is the Soviet Union and Leninism and a pattern of development against America, I think we could make a very powerful case.

Rep. FOLEY: I would argue we have many other ways to avoid the spread of communist and Soviet-Cuban influence in Central America other than use military force. I would argue that using military force probably hurts our cause more than helps it, and brings about those very conditions.

Rep. GINGRICH: And that will be the next round of arguments.

LEHRER: That will be the next round of argument. We'll have you back and do it. Congressman Foley, Congressman Gingrich, thank you very much. Robin?

MacNEIL: Still to come on tonight's NewsHour, a major focus section on the proposal to limit Social Security cost-of-living adjustments. Will it survive the Senate, and is the present system unfair to younger Americans? Also, a documentary report on what happens when the public hates art the government has commissioned. Social Security: Freezing Benefits?

MacNEIL: For our major focus section tonight, we tackle one of the main issues in the 1986 budget battle that opened in the Senate today, Social Security. One part of the $52 billion deficit reduction package under debate is a proposal to limit the cost-of-living adjustment, COLA, which Social Security recipients get each year. Elderly groups are mobilizing thousands of volunteers and spending an estimated $2 million to defeat the proposal. They cite a recent Congressional Budget Office report that the COLA limitation would force thousands of elderly people below the poverty line. And they claim the President is reneging on promises not to cut Social Security, a promise reiterated in the campaign debates last October.

Pres. RONALD REAGAN [October 7, 1984]: A President should never say never, but I am going to violate that rule and say never. I will never stand for a reduction of the Social Security benefits to the people that are now getting them.

MacNEIL: Recently Mr. Reagan has not said he is not proposing a reduction but a smaller increase. In his speech last night he argued that the elderly would not be hurt.

Pres. REAGAN: We're asking the 46 million Americans who receive a retirement, veterans' or Social Security check to accept a guaranteed 2 increase over the next three years in place of the existing cost-of-living adjustment. If, however, inflation should rise above 4 , the amount above 4 would be added to the 2 . Now, these programs now total nearly $250 billion per year, 25 of our entire budget. They cost 30 times more than they did just three decades ago. Our veterans, disabled workers and retired citizens have earned their benefits. They deserve an adequate and dignified standard of living, and we will never renege on that pledge.

MacNEIL: We have two angles on the Social Security issue. First, the congressional perspective from two key players in the Senate debate. Republican Senator William Armstrong of Colorado is chairman of the Senate Subcommittee on Social Security and former member of the President's Commission on Social Security Reform. He strongly supports limiting the COLA increases. Strongly against is Democratic Senator Don Riegle of Michigan, a member of the Senate Budget Committee. Both gentlemen join us from Capitol Hill.

Senator Armstrong, is Senator Dole, first of all, going to get a vote late tonight on the whole package?

Sen. WILLIAM ARMSTRONG: Yes, we think that there will be a vote hopefully before the evening is over, or certainly early tomorrow.

MacNEIL: What kind of -- what's its chance, do you think?

Sen. ARMSTRONG: Very close at this moment. My sense is that the momentum is with the majority leader, and frankly I'm optimistic that before the day ends we will have a vote and that we're going to win. But it'll be close, and we could fall a vote or two short or we might come out a vote or two on the winning side.

MacNEIL: Senator Riegle, do you think there's a chance of their winning it tonight?

Sen. DONALD RIEGLE: Well, in the Senate, as you know, there are 53 Republican senators. And so they can pass anything they want if they agree, or at least if 51 of them agree. And this is a Republican package. The Democrats have not participated in putting it together at all. So I would say that it depends solely on whether there are enough Republican votes. I gather from what Senator Armstrong says that some of the Republicans, properly so, don't want to vote for it because I think it's a bad package.

MacNEIL: But it could happen, that it could all be over tonight in the Senate, could it?

Sen. RIEGLE: No, not so, because what will happen is that if it does pass, then that means that it's been put forward and it's open to further amendment. And there will be a number of amendments offered by other senators, I would think many from the Democratic side, to restore Social Security and --

MacNEIL: Oh, so this wouldn't be the end of it, if the package were approved -- even if it were approved tonight in this first vote?

Sen. RIEGLE: That's right.

MacNEIL: I see. Well, let's move on to Social Security. Senator Riegle, does limiting the Social Security COLA actually cut the budget deficit?

Sen. RIEGLE: No, it does not. As a matter of fact, I brought a quote from President Reagan himself, because he addressed that issue in March of this year. This is after the presidential election. This is what he said in his press conference on March 21st. The President said, "Social Security is running a surplus, and it is totally funded by a tax that can only be used for that purpose. So when we talk about Social Security, we are not getting at the deficit problem at all." And he was right about that, and of course he's changed his position, because he wants to be able to take that surplus in Social Security and borrow it and use it for other aspects of the government -- the defense increase and various other things -- and that's why he wants to, and has asked the Senate, to break the promise that he made during the election.

MacNEIL: Senator Armstrong, from your point of view, does it reduce the deficit?

Sen. ARMSTRONG: Well, of course, Social Security is a part of the federal budget, and so it does in that sense contribute to or subtract from the deficit. But you know, the thing that makes it --

MacNEIL: It subtracts from the deficit because the Treasury will borrow that money from the Social Security trust fund if it's saved there, is that it?

Sen. ARMSTRONG: Well, not exactly. That's part of it. But you know, the federal budget includes many trust funds. Social Security is the largest of them, but there's the highway fund, there's the airport fund, there's the Dingell-Robertson-Pitman whatnot fund. There's a bunch of different trust funds. But they're all rolled together in the federal budget, and they all have the same macroeconomic effect. But the thing we don't want to lose sight of is this, that the proposal which will be voted on tonight, the Social Security provision being included in that, is really a compromise. A number of senators, Senator Chiles, Senator Hollings and others, suggested we ought to freeze Social Security. And frankly, I didn't think that was unreasonable; I was prepared to support that. President Reagan said no, we can't touch Social Security. And so we've come to a compromise that does two things. It says first, even if there isn't any inflation, Social Security recipients will get a guaranteed 2 increase in their cost-of-living adjustment. Now, that's more than they would get unless the cost of living were otherwise increasing at a rate of 3 or more. So there's an upside potential as well as a downside. And then we say if inflation is between 2 and 4 , they get only the first 2 , and then after 4 it's fully adjusted. So it is a compromise proposal, and let me just make this one last point. There's two points of view on it, and I understand that, but if somebody thinks you can put together a budget package by starting out to say Social Security is off limits or national defense is off limits or this, that and the other thing can't be included in the package, it just can't be done. And in my opinion, somehow we've all got to be in this boat together in order to make the thing work.

MacNEIL: Senator Riegle?

Sen. RIEGLE: If I may say so, Social Security is not what's causing the deficit problem, as the President himself has said, as I quoted a minute ago. But the problem here is that no Democrat -- Senator Armstrong is incorrect when he says there is any Democrat that's proposed three years' worth of cuts in Social Security, because none has, not a single one in the House or the Senate. And that's what this Republican package does, and let me give you the numbers. For the average person on Social Security, on the Social Security COLA reduction they'll lose $9 a month in the first year; in the second year they lose a second $9 a month, so that's up to $18; and in the third year they will lose another $9 a month in buying power, so they will have lost $27 a month from where they are today in terms of what their dollars buy. But in addition, they also cut Medicare. So the out-of-pocket cost to senior citizens to the same person that I'm describing on Social Security, as you factor that in over, say, the next five years, they lose another $33 a month. So by the time we get to 1990, the person on Social Security today will have lost $60 a month in terms of the buying power that they have today.

MacNEIL: But Mr. Reagan just said last night that the plan would maintain an adequate and dignified standard of living for the elderly.

Sen. RIEGLE: Well, he's not being truthful about that. And quite frankly, I don't think the President understands. The President is a Social Security recipient himself. He's 74 years old. But he is very, very well-to-do; he's a multimillionaire. And when his Social Security check comes, he turns it back to the Treasury, and I'm glad that he does that. But he doesn't begin to understand what it's like for the average senior citizen out there and retiree whose phone bill is going up, prescription drugs are going up, food costs going up, medical costs going up, and they can't make ends meet. And all the COLA adjustment does, it doesn't give them any extra money, it's not an increase; it simply makes up for the loss in the buying power, due to inf,lation, in the previous year.

MacNEIL: Senator Armstrong, are you satisfied they'll be able to maintain an adequate and dignified standard of living if this COLA is reduced?

Sen. ARMSTRONG: Well, the cost-of-living adjustment is an important feature of many programs. But if somebody thinks that we can put a budget together that freezes federal employees' salaries or military salaries and just exempts Social Security recipients from the process, that's not true, it can't happen. Now, will they maintain an adequate level of living standard? This is a great, rich, prosperous country and a compassionate country, and of course we're going to see to that. At the same time, however, I don't think Senator Riegle wishes to, and I certainly don't wish to convert the Social Security program into a welfare-style program, a means-tested program.

MacNEIL: Gentlemen, I'd like to thank you both. We want to widen the discussion now. Jim?

LEHRER: Another wrinkle to the Social Security argument is the so-called generation gap -- the complaint from current, younger workers that they are bankrolling benefits for retired persons that are simply too high. Jim Davidson, president of the National Taxpayers' Union, a nonprofit Washington research group, believes that. Robert Ball, however, thinks that position is nonsense. Mr. Ball was the Social Security commissioner from '62 to 1973.

Mr. Davidson, how is it unfair to current workers?

JAMES DAVIDSON: Well, I think that there is a danger of creating a generational conflict in this country, because if you look at the Federal Reserve Bank of New York figures that have been compiled -- and they've studied this consistently -- they calculate that a person who is now retired on Social Security will get back from two to three times what he paid into it. If you're now working and you're over the age of 45, their figures suggest that you'll probably get back about what you paid into it. And if you're somebody who's under the age of 45, you'll be lucky if you get back as much as 80 of what you put into it, which is to say eight cents out of every dime.

LEHRER: How, how can that be?

Mr. DAVIDSON: Well, I think that what has happened is that over a long period of time the payroll tax remained very low; the benefits, though, were constantly increased, and so the people retired and were in a situation where they could, because of the increases in benefits, get back very rapidly much more than they paid in. An earlier Federal Reserve Bank calculation showed that people retiring a couple of years ago would have gotten back within nine months or so basically everything that they -- their contribution to the payroll tax provided.

LEHRER: So now the younger people are coming along, the payroll tax has gone up, that means they're paying in more, and when it comes time for them to retire they're not going to get that much more, so they're going to end up paying a lot. So they're going to end up being treated unfairly.

Mr. DAVIDSON: That's arithmetic. And I would say that nobody, at least not I, would want to reduce people who are in need to desperate straits, and we're not talking about that at all. We have a proposal at the Taxpayers' Union, which I think makes a good deal more sense than some of the things that have been proposed, which is not a means test for Social Security but a windfall test, so that people who are getting back much more than they paid in -- and there arxDe such people -- would be reduced in the amount that they get by the same rate as their income tax. In other words, it would be a kind of tax on the windfall portion of your Social Security payment, and it would not apply to people who are in desperate straits. The very poor, the people who would depend only on Social Security, would not be affected.

LEHRER: Mr. Ball, what do you think of Mr. Davidson's ideas?

ROBERT BALL: Well, first let me defend the Federal Reserve Bank of New York. That was not their study. It was a study of a couple of people on the research staff, and had no approval from the New York Fed, and it's wrong. Young people will have a very good deal out of Social Security in the future. One of the worst things that happened in the debate of '81 and '82 on Social Security were people running around the country telling young people the system's running out of money, they weren't going to get any benefits, and if they were there, they weren't going to get their money's worth. That's just not so. If you take a cohort of people starting out today under Social Security, as a group they will do very well, in terms not only of their own contribution but in terms of their employer's contribution too, as soon as you figure -- and also figuring interest in. Some of these studies, the problem is they do them after the fact, on a person who's already 65. Then they look back and they say, "Well, this person always earned a maximum amount under Social Security." Well, take that as a special case. This person never got married, never had any dependents, so he won't get any credit for survivor's benefits or dependent's benefits. This person wasn't disabled, so we don't get any credit for that. If you look at it as a group insurance program, looking ahead, which is the only way to do it, then people in the future would get a very good deal. And I think the country doesn't know this, Jim.

LEHRER: A very good deal in what way, Mr. Ball? Meaning the amount of money you pay in, you're going to get that much and more out? Or how would you judge what a good deal is?

Mr. BALL: I would do it on a group insurance basis. That is, the group as a whole. You can't tell an individual -- it's not a savings plan. You can't tell the individual after the fact that he's going to get his own money back. Most of them will, and on average they will. But some will get more, and a few will get less, when you look at it after the fact. That's the way insurance is. But what I was starting to say was, I don't think the country realizes that Social Security benefits are kept up to date throughout your working life with wages. That means that all productivity increases in this country are fed into Social Security benefits. So that a person coming on the rolls in the year 2020 will get a Social Security benefit at that time which bears the same relationship to earnings in 2020 that is true for people today. There'll be in real terms, because of productivity increases, benefits that very young people will get later --

LEHRER: As well as benefits increasing for cost of living and anything else that --

Mr. BALL: Once you're on the rolls, once you're on the rolls it's protected against inflation. But it's even better until you come on the rolls.

LEHRER: Mr. Davidson?

Mr. DAVIDSON: Well, I think that what Mr. Ball has said is very persuasive, and he's a very persuasive man. But it doesn't gainsay the fact that there is a fundamental problem, that people are going to be getting back much more than they paid in. Somebody has got to pay in this amount; it's not coming out of the clear blue sky, it's coming from somebody. And it strikes me, and it has struck others, and it certainly is the case that whether the Federal Reserve Bank of New York authorized the study or it was just done by economists there who were then told to hush up or whatever the case was, the facts are still the facts. And their figures show that the ordinary person now receiving benefits will get two to three times what he paid in. Now, I don't begrudge these benefits to the people who need them, but there are a great many people in this country who have plenty of assets --

LEHRER: Who don't need them.

Mr. DAVIDSON: Who don't need them. And we are borrowing $50 million a minute to make up the deficit this country faces, and I don't think it makes sense to borrow money on a massive scale to hand it over in many cases to people --

LEHRER: Who don't need it.

Mr. DAVIDSON: -- who don't need it, as a windfall.

LEHRER: Mr. Ball, how do you answer that argument about people getting money they don't need from Social Security?

Mr. BALL: First of all, the Social Security system is not a welfare system, it's not a need system. It happens to be our most effective antipoverty program. If it weren't for Social Security, 50 of the people over 65 would be below the poverty level. And most Social Security beneficiaries are relatively low-income. But that's not the whole system. The system is the base on which everybody builds their retirement, their disability protection and their survivors' protection. Every pension plan in this country is built on the idea that the individual is going to also be a Social Security beneficiary as well as a pensioner. It's not a question of whether people absolutely have to prove they need the benefit. Most of them are relatively low-income, but the system is based more on the idea that you contribute, the employer contributes, you have a right to this benefit. Now, if I could go to --

Mr. DAVIDSON: We agree with that.

Mr. BALL: If I could go to Mr. Davidson's proposal of taxing Social Security benefits, I just want to be sure that everybody knows that in the 1983 amendments, the benefits of higher-income people were taxed for the first time. This is the first income tax where it's actually effective. About 10 of higher-income beneficiaries will now pay a tax on half their Social Security benefit. I very much favor that, and I'm not even saying in the long run --

LEHRER: That's a better solution than denying them the income in the first place, right?

Mr. BALL: Yes. And I think Mr. Davidson is saying he just wants to do more of that. I don't think he wants to do any more than tax the benefits. Is that correct?

Mr. DAVIDSON: That's right. What I'm saying essentially is that if people -- we believe that people should get back what they paid into it, and I haven't disagreed with that. But the point is whether they should get back more than they paid into it, or much more than they paid into it, is what we're debating.

Mr. BALL: Without paying a tax.

Mr. DAVIDSON: Without paying a tax on it.

Mr. BALL: Now --

Mr. DAVIDSON: And I think that the better and more just way to do that is instead of just putting on a tax for people at a certain bracket depending on whether they're married or single or what have you, is to take the benefits that they get and work backward, figure out what they actually paid in, and let them, just as you do with your IRA or you would do in a private pension plan or the federal pension plan, when federal retirees retire, they do not have to pay tax on the amount that they get which is just returning to them their own capital. It's when you begin to get income that you would not otherwise have had that that should be taxable.

LEHRER: Let's bring the senators back in, Senators Armstrong and Riegle, who have been listening to you all. Senator Armstrong, what do you think of the Davidson idea?

Sen. ARMSTRONG: Well, I -- in the context of the budget debate I don't want to think about it at all, because I am convinced that what we've outlined is a practical and fair plan, andit is a compromise, and every new idea -- and there's a hundred different approaches to Social Security, and some of them are meritorious -- but every new idea that we bring out at this point really is a way to avoid focusing on the question that's before us, which is adopting a budget resolution. And if we don't do that, we're going to have chaos in this country's capital markets, and it'll wreck the economy. So I just don't want to have any red herrings on Social Security or anything else. At another time or another place, I'd be glad to consider that kind of changes if it's something that we ought to do.

LEHRER: Senator Riegle?

Sen. RIEGLE: Well, I want to respond to something that was said a minute ago about young people and their investment in Social Security for the future, because I think Social Security is just as important for younger workers today as it is for the person who presently is retired and needs it just to get by. And that is that Social Security provides other protections. You can be a young worker of, say, 28 or 29 with two or three children driving home from work tonight, and if you're killed on the expressway, there's a survivors' benefit under Social Security that will help your wife and your children get to the point where they're old enough to begin to provide for themselves. And that -- you don't think about that benefit unless suddenly misfortune strikes in your family, or the same with a person that is disabled. But in addition to that, young people today have mothers and fathers, they have grandmothers and grandfathers, and those people are out there struggling to get by. And if you cut the Social Security to the point where you drive hundreds of thousands of additional senior citizens below the poverty line, where will they turn for help? I know I'm prepared, and everybody that I know would respond to help their parents or their grandparents if they were put in a more desperate financial situation. But why should they be? They've paid into the system, they've earned these benefits; the system is solvent, it's strong and generating a surplus, as President Reagan has said. Why shouldn't they be entitled to receive that and be kept off poverty? I don't think the seniors ought to be driven into poverty.

Mr. DAVIDSON: Who's in favor of driving seniors into poverty? I've never heard of anybody who says that.

Sen. RIEGLE: Well, let me tell you, if we pass this budget tonight -- just to give you the numbers -- if we pass this budget tonight, the average person on Social Security receiving the average benefit, there'll be 430,000 of those people driven below the national poverty line just by this cut in Social Security. So that's who we're talking about.

LEHRER: Is that right, Senator Armstrong?

Sen. ARMSTRONG: Well, that's really a little misleading, because first of all, we don't know the income of any persons on Social Security. We don't ask them that question. And so the numbers which Senator Riegle has cited are a mathematical projection, which may or may not be accurate. But the bottom line is we're not going to let anybody slip out of the safety net. That just isn't the kind of a country we are, and we shouldn't do that. In addition, let me point out that we're talking about a line, and if you're 10 cents above the line you're not in poverty, and if you're 10 cents below the line you are. And we're talking about very small amounts of money that according to this mathematical model put people into poverty or out of poverty -- actually, in most cases, less than two dollars a month.

So I think it comes down to this. Is the package we've proposed fair? And I think most people, including the vast majority of Social Security recipients, will think it is fair. And in the long run the way to move people out of poverty is not by increasing cost-of-living adjustments, it's by a thriving, growing economy that helps Social Security recipients and everybody in this country.

Sen. RIEGLE: If I can say, it's not increasing cost-of-living benefits. The cost-of-living benefits come a year after the inflation. In other words, the cost-of-living benefit that will take place in the future is to make up for last year's inflation. So there is no gain here for senior citizens. It just keeps them from sinking deep into a hole. That's what it is. That's why when we cut the COLA adjustment, or reduce it, we're not giving people a raise. The President just is dead wrong on that issue. And if Social Security was important to him in terms of his own income, he'd understand it in a way he apparently doesn't understand it.

LEHRER: Mr. Ball, what is your view of the cost-of-living question?

Mr. BALL: Well, first of all, I very much agree with Senator Armstrong that this is the issue to discuss, that anything else is sort of a red herring at this time. Social Security doesn't belong in a budget deficit argument at all. It's completely separately financed. It brings its own money with it. It's reducing the deficit. In the next five years the cash benefit part of Social Security will be taking in $150 billion more than it's paying out. If you add hospital insurance to it, it's $200 billion more. In 10 years the estimate is it'll take in, when we combine both programs, $500 billion. It's not contributing one cent to the deficit. Another point I think that --

LEHRER: Let me get Mr. Davidson's view of that. You agree that it's not a deficit question?

Mr. DAVIDSON: No, I don't. I think that we're in a situation in this country where Social Security recipients now and in the future have a desperate stake in seeing that this country's fiscal house is put in order. And I agree, as Senator Armstrong said, that that is the question that's on the table tonight. Everybody here who is a grandmother or a grandfather or a father or a mother, has children and grandchildren who will be living in this country, and we cannot go on spending money out of an empty pocket year after year with a national deficit running in the $220 billion range. As I said, we're borrowing $50 million a minute while; we've been talking here tonight we've borrowed hundreds -- or going on to the --

Mr. BALL: But it's being borrowed from Social Security, from the trust funds, a great deal of it.

LEHRER: Gentlemen, we have to leave it there. Mr. Davidson, Mr. Ball, senators up on the Hill, thank you all very much. Art or Eyesore?

MacNEIL: Our final focus section tonight is about a subject everyone has an opinion about, sometimes a violent opinion: art in public places. A few years ago the federal government began spending tax money to put new works of art into or in front of government buildings. The program drew praise from the art world, but some howls of protest from the public, including government workers who knew what they liked but didn't like what they saw. It reached the point where one of those works of art is now threatened with removal, and it's happening in what many call the art capital of the world, New York City. Here's a report by June Massell.

JUNE MASSELL [voice-over]: It's been called everything from an ugly rusting wall%%%

1st NEW YORKER: It's a monstrosity.

MASSELL [voice-over]: %%%to a great piece of abstract art.

2nd NEW YORKER: I think it's probably the best public sculpture that I know of in Manhattan.

MASSELL [voice-over]: Some call it junk, others call it a symbol of 20th-century American culture. Officially it's called Tilted Arc, named and designed by the sculptor Richard Serra. It's 12 feet high and 120 feet long and made of steel. It sits in front of the Federal Building in New York City and was paid for by the federal government, under a Program known as the Art and Architecture program, which commissions public art for public places. Through the General Services Administration, GSA, the program allows that one half of 1 of the cost of constructing a federal building be spent on art. In 1979 the government commissioned Serra. Today the government is considering taking his work down and moving it somewhere else.

RICHARD SERRA, sculptor: To remove it is to destroy it. It's not a transportable object; it cannot be site-adjusted. There's a tradition of this work in this country. It would be like plowing under the Vietnamese Memorial. The Vietnamese Memorial is built for the topography of that site. This is built for the topography of that plaza and only for that plaza.

WILLIAM DIAMOND, regional administrator, GSA: I would answer him in the same way that I would say why is the Temple of Dendur, which was certainly site-specific to the Nile, now sitting in Central Park, where millions of people can view it when it was never intended to be there.

Mr. SERRA: Can we allow that to happen in the United States of America? Can we have a policy in this country of art extermination? Is that possible?

Mr. DIAMOND: I believe a good piece of art, a good work of art is only enhanced by changing its location many times.

MASSELL [voice-over]: The controversy began almost immediately after Tilted Arc was installed. Many people who worked in Federal Plaza complained they didn't like it. Petitions started circulating calling for its relocation.

[on camera] Some say it's not fair to discuss relocating or tearing down this sculpture just because others find it unattractive. These same people say that the federal building the sculpture sits in front of is by no means a piece of distinguished architecture, and no one is suggesting tearing it down.

[voice-over] With so much controversy, GSA regional administrator William Diamond says he had no choice but to hold public hearings.

Mr. DIAMOND: Abstract art is fine and dandy, but when the public puts its money up for it I think it ought to have some say in the matter.

Mr. SERRA: You know, if you had a referendum between a slot machine and Beethoven, there'd be no Beethoven.

MASSELL [voice-over]: Furthermore, Serra argues, he has a contract with the government which guarantees that Tilted Arc be permanent.

Mr. SERRA: They asked me to build a permanent piece for the Federal Plaza in New York City. I said, what on the downside, if I work two and a half years and it doesn't pass the final jury? They said, "Richard, there is one permanent Oldenburg, there's one permanent Frank Stella, there's one permanent Alexander Calder, there's one permanent Mark DiSuvero, there's one permanent George Segal, and this is your one chance in your lifetime to build one -- your one permanent work for the U.S. government." I said okay, I'll accept that.

MASSELL [voice-over]: Diamond says Serra's contract permits the government to move the piece to the Smithsonian. So despite Serra's objections, Diamond convened threedays of hearings in New York. Almost 200 people testified, including government employees, a sampling of the best and the brightest from New York's art community, and some local politicians.

Rep. TED WEISS, (D) New York: Imagine, if you will, this curved slab of welded steel, 12 feet high, 120 feet long, weighing over 73 tons, bisecting the street in front of your house, and you can imagine the reaction of those who live and work in the area.

CLAES OLDENBURG, artist: If the action to remove the Tilted Arc succeeds, we shall have mediocrity in decoration instead of integrity. Better artists would no longer trust the government and will avoid the program.

HERBERT STUPP, regional administrator, ACTION: There's no shame in admitting a $175,000 mistake. It is a monument to times when anyone with a half-baked idea could get Uncle Sam to meet his price. Obviously I hope the arc is removed, and auctioned off, if possible.

HARRIET SENIE, art historian: Moving a site-specific sculpture is like changing the color of a painting. It is no less radical than that.

MASSELL [voice-over]: While Serra has works of art in many corners of the world, this is not the first time that Serra's sculpture has met resistance. In the '70s Serra designed a piece for St. Louis which had problems getting approved, although it finally did. And in Peoria his design plans didn't play at all. A city commission there turned his proposal down. [voice-over] Serra is not alone. Other abstract artists funded by the GSA have had problems with public acceptance. When Claus Oldenburg's Bat Column went up in Chicago, some called it an example of government waste. And in Grand Rapids, Michigan, a Calder sculpture created in 1969 was hated at first but later became the city logo. Artists like George Segal are now worried that the Serra hearings could trigger a domino effect.

GEORGE SEGAL, artist: If this hearing is decided in a way that Mr. Serra's sculpture's removed, any sculpture that's unpopular anywhere in the United States is in danger of being removed. [ interruption due to PBS technical difficulties]

Mr. SERRA: %%%removed, all of those works of art that the public clamor was sufficiently loud and genuine as to warrant their removal, let's see what we would have left. Well, we know we wouldn't have hardly any of Picasso's work. We wouldn't have any of the French or the American impressionists. Michaelangelo's treasures might be -- we would be left with a wasteland.

MASSELL [voice-over]: Part of the problem, according to art historian Suzanne Delehanty, is that the average person doesn't understand or relate to abstract art.

SUZANNE DELEHANTY, art historian: I think the controversy is more about what is familiar and what is not familiar, and how willing one is to accept, explore and be excited and curious about the unfamiliar.

MASSELL [voice-over]: Delahanty says she finds the Serra work challenging.

Ms. DELENANTY: It's challenging me because it's not what we expect at least traditionally a work of art to be. And all of us have preconceived ideas about what a work of art could be, i.e., that it's a mounted hero or a seated leader. And those are ideas that were certainly prevalent in the 19th century and long before that. But the kind of sculpture that has emerged is no longer sculpture that's on a pedestal.

MASSELL [voice-over]: The final decision as to what to do with Tilted Arc will be made by GSA headquarters in Washington after the testimony from the hearings is evaluated.

[interviewing] What will you do if the work is removed?

Mr. SERRA: I will bring an injunction to keep it up, and I will sue and will go to court on the fact that they're in violation of my contract and they have morally overstepped their jurisdiction, and they have demeaned me in a way that I am intolerable. And if they prevail and they plow this work under, I will give up my citizenship, I'll leave the country. Absolutely. I can't live in a country that commissions my art, invites me to the White House, shakes my hand and tears my work down. Absolutely not. I'll leave.

MacNEIL: The panel that held those hearings was evidently prepared to take Mr. Serra up on his threat. They later recommended that the Tilted Arc be removed. And as June said, the final decision will come from the federal government's General Services Administration any day now. Jim?

LEHRER: Again the major stories of this day. Secretary of State Shultz said there are similarities between what happened in Vietnam 10 years ago and what is happening now in Central America. He said the Sandinistas in Nicaragua are acting the same way the North Vietnamese did.

And the Senate opened full debate on the Republican leadership and Reagan plan to cut the federal budget deficit.

Robin?

MacNEIL: A little footnote tonight. In the 1985 Pulitzer Prizes, one man is a three-time winner. He is editorial cartoonist Jeff Mac Nelly of the Chicago Tribune. His cartoons have often appeared on this program, and here's a sample.

[Jeff Mac Nelly cartoons]

WALTER MONDALE: Did you find out about the strange noises I keep hearing?

AIDE: Yes, sir. It seems to be polite applause.

Pres. REAGAN [second cartoon]: Well, Andrei, be sure to give my regards to Comrade Vader and the whole gang back at the Empire.

CASPAR WEINBERGER, Secretary of Defense [third cartoon]: 'Tis a far, far better thing I do%%%

Pres. REAGAN: Okay, Caspar. You can cool the theatrics.

Vice Pres. MONDALE [fourth cartoon]: That's right, friends. We're talking leadership.

MacNEIL: The cartoons of Jeff Mac Nelly, who yesterday won his third Pulitzer Prize. Good night, Jim.

LEHRER: Good night, Robin. We'll see you tomorrow night. I'm Jim Lehrer. Thank you and good night.