The MacNeil/Lehrer NewsHour

MR. MacNeil: Good evening. I'm Robert MacNeil in New York.

MR. LEHRER: And I'm Jim Lehrer in Washington. After our summary of the news this Friday, we have a full debate over an old idea with a new life, a balanced budget amendment to the Constitution, then some Presidential politics featuring Ross Perot in his first big TV hook-up, plus analysis by David Gergen & Mark Shields. We close with a Roger Rosenblatt essay on family values. NEWS SUMMARY

MR. LEHRER: President Bush was accused today of committing a foreign policy blunder of the first order in his pre Gulf War dealings with Iraq. Five House Democratic Committee Chairmen testified before a House Banking Committee hearing to accuse the administration of covering up the whole affair. They released new documents which showed the administration favored economic and political incentives to influence Iraq prior to its August 1990 invasion of Kuwait. Banking Committee Chairman Henry Gonzales has placed some classified documents in the Congressional Record over the last several months to support that charge. Their publication prompted the administration to refuse committee requests for additional documents. That was an issue at today's hearing.

REP. SAM GEJDENSON, [D] Connecticut: The fact that President Bush chose to romance the man he later compared to Adolf Hitler was a huge miscalculation. Clearly, it is time for the administration to end a concerted attempt to withhold information from Congress and the American people. This is a democracy. The people and their duly elected representatives have a right to know what led up to our war with Saddam Hussein.

EDWIN WILLIAMSON, State Department: In this committee alone, the State Department has made available an estimated 4,000 pages of documents on more than a half dozen occasions. The suggestion that the administration has sought to cover up its policy toward Iraq is simply not true and is belied by the extensive production of documents we have already made to Congress, the congressional testimony of administration policy makers and our continued willingness to make available additional information.

MR. LEHRER: Next week, the House Judiciary Committee will meet on whether to call for an independent counsel investigation of administration policy for Iraq. Robin.

MR. MacNeil: Fighting continued today in two of the former republics of Yugoslavia as members of the United Nations Security Council considered whether to impose harsh economic sanctions. Mortar, heavy artillery, and rockets were fired at the Bosnian capital, Sarajevo. In neighboring Croatia, artillery struck the port town of Dubrovnik. We have a report by Robert Moore of Independent Television News.

MR. MOORE: Ominously, the Croatian city of Dubrovnik has come under fierce attack, suggesting that economic and diplomatic pressure is counting for little. The shelling was from Serbian irregular forces, but every militia here has its wild elements that are out of control and few believe that a trade embargo will make much difference to the fighting. And the Bosnian capital of Sarajevo was again ablaze last night. It was battered by long range artillery and persistent fighter power to stop rescue workers from approaching. With no U.N. or Red Cross presence, no one can be certain of the death toll. There was also evidence that federal army rockets have been used, causing much of the damage. The United Nations looks almost certain to punish Serbia further. Draconian sanctions may be adopted that would threaten Belgrade with economic collapse. In Serbia, it is recognize that an oil and fuel embargo will have serious consequences, but one fear here is that sanctions will inflame tensions, not just punish Serbs.

MR. MacNeil: China's U.N. ambassador today asked the Security Council to delay the sanctions vote. China and Russia both supply oil to Yugoslavia. Their ambassadors said they were waiting for instructions on whether to vote for an embargo.

MR. LEHRER: Ross Perot went on his own television show today. He addressed supporters in Orlando, Florida, and it was simultaneously broadcast via satellite to rallies in Ohio, Alabama, Kansas, Wyoming, and Idaho. Perot has said he plans to rely on satellite appearances instead of extensive campaign travel. In an ABC Television interview to be broadcast tonight, he said he would not appoint homosexuals to certain cabinet posts and he would not knowingly hire people who had cheated on their spouses. We'll have more about Perot later in the program.

MR. MacNeil: An army National Guard colonel who was dismissed because she acknowledged being a Lesbian said today she will challenge the dismissal in federal court. Col. Margareta Cammermeyer, who is 50, has been in the army for 27 years and won a bronze star in the Vietnam War. She disclosed her sexual preference while attempting to gain admission to the War College. She is believed to be the highest ranking officer dismissed because of a military ban on homosexuals.

MR. LEHRER: The U.S. economy did better the first three months of the year than first believed. The Commerce Department reported today that gross domestic products grew at a 2.4 percent annual rate in the first quarter. The initial estimate was 2 percent. President Bush went to Los Angeles today for the second time since the riots there a month ago. He stopped at a disaster relief center to talk with workers. He also met with state and local leaders. Later, he said there was a long way to go in rebuilding the city. And that's it for the News Summary tonight. Now, it's on to balancing the budget by constitutional amendment, the big electronic Perot rally, Gergen & Shields, and a Roger Rosenblatt essay. FOCUS - BALANCING THE BOOKS

MR. MacNeil: First tonight, tinkering with the United States Constitution to get the country's fiscal house in order. Despite repeated congressional efforts, the federal budget deficit is still out of control, skyrocketing to nearly $400 billion this year. As a last resort, some discouraged lawmakers have turned to a constitutional mandate to rein in government spending. In a moment we'll hear from two members of Congress and two economists. First, this backgrounder from Capitol Hill Correspondent Kwame Holman.

MR. HOLMAN: Members of Congress all know the term "budget discipline," but few have ever experienced it. Over the last 32 years, Congress has worked with a balanced budget only once, in 1969. Left to their own devices, few members thought they would ever see a balanced budget again. In the fall of 1985, with the budget deficit topping $212 billion, three Senators proposed achieving budget discipline through the force of law. The names Gramm, Rudman, and Hollings became synonymous with the effort toward budget reform.

SEN. PHIL GRAMM, [R] Texas: [1985] I am not in favor of raising taxes. I'm in favor of controlling spending. I believe the American people want spending control and I believe that the President is correct in saying taxing is the last resort, not the first resort.

MR. HOLMAN: Their idea was to eliminate the budget deficit gradually over six years by setting deficit limits. The force of law would be a budget act that would automatically and indiscriminately cut away any spending in excess of those limits. Congress approved the idea, President Reagan signed it, but few people were happy about it.

REP. BYRON DORGAN, [D] North Dakota: [1986] This thing is unworkable. It's fundamentally fraudulent, and we're all talking as if it's serious.

REP. SILVIO CONTE, [R] Massachusetts: [1986] We have created a monster here that has not worked.

SEN. PHIL GRAMM: I get mail every day blaming Gramm-Rudman for every failing of government. If the first sergeant at Ft. Hood in Texas doesn't order enough toilet paper, his excuse is Gramm-Rudman.

MR. HOLMAN: Members of Congress found it nearly impossible to reduce the deficit without jeopardizing programs they felt were critical to the welfare of the country. They began to evade Gramm- Rudman routinely by simply voting to exempt certain programs from the automatic trust. Deficits skyrocketed. It was hoped Gramm- Rudman would eliminate the budget deficit by 1991. By the spring of 1990, the deficit projection was $170 billion. Gramm-Rudman had failed. President Bush and congressional leaders regrouped and organized an emergency budget summit. Twenty select members from the House, Senate, and the administration embarked on a five-month budget odyssey that took them from the media glare on Capitol Hill to the relative seclusion of Andrews Air Force Base in Maryland. When no agreement was reached, membership in the summit was whittled to eight. The elite group emerged in the fall with a package of tax increases and spending cuts that the President and congressional leaders reluctantly accepted.

PRES. BUSH: Sometimes you don't get it just the way you want and this is such a time for me. And I expect it's such a time for everybody standing here.

SEN. GEORGE MITCHELL, Majority Leader: [1990] Both sides can accurately say that the agreement includes provisions they don't like. Both sides can also accurately say the agreement doesn't include some provisions they think should be included.

MR. HOLMAN: But a majority of Democrats and Republicans, many angry for having been left out of the process, rejected the plan.

REP. DAN BURTON, [R] Indiana: The American people want a lid put on spending. They don't want new taxes.

REP. DON DELLUMS, [D] California: [1990] There are homeless, poor people, unemployed people. This budget does not address that.

REP. JAMES TRAFICANT, [D] Ohio: [1990] Let me tell you the silent majority is out there. They called your office. They were against this before the Presidency and, damn it, they're against it now.

MR. HOLMAN: The President, already damaged for having broken his "no new taxes" pledge, had been further embarrassed by mass defections by House Republicans.

PRES. BUSH: We've just got to do a better job of getting it through, but, listen, I can understand the frustration. I feel it myself at times.

MR. HOLMAN: But a month later, Congress did approve a plan that targeted spending. The five year program, still in effect today, raises taxes and limits most spending through 1995, for a total saving of nearly $500 billion. But deficits due to events beyond the control of Congress, like the growth of the unemployment and Social Security rolls, were left to grow without penalty. Nonetheless, some members believed budget discipline had been achieved.

REP. BILL RICHARDSON, [D] New Mexico: [1990] Mr. Speaker, it appears the budget nightmare is almost over and we can gohome. In the minds of voters, the issue will not just be tax fairness, or deficit reduction; it will be whether the United States government can function, whether we can govern, whether we can rid ourselves of this paralysis.

MR. HOLMAN: The projected deficit for 1992 today stands at $400 billion. On Capitol Hill, the deficit is seen as the primary cause for the sluggish economy. It also is mentioned as a major factor behind the record number of retirements from Congress this year. But within recent weeks, the idea of a constitutional amendment mandating a balanced budget has swept through the halls of Congress with bipartisan support. Proposals by Paul Simon in the Senate and Charles Stenholm in the House would have to be approved by 2/3 of both chambers, and then by 3/4 of the states. If approved, it would become part of the Constitution and would outlaw deficit spending in any year, unless 3/5 of both Houses agreed to the deficit. Opponents of the Balanced Budget Amendment, like House Budget Chairman Leon Panetta, want members to understand the consequences of their vote. Panetta has proposed an enforcement amendment that would outline up front which programs would be cut and what taxes would have to be raised.

REP. LEON PANETTA, Chairman, Budget Committee: If they're serious about balancing the budget and they know that it involves tough choices, then why can't they make it now? Why do they have to suddenly say, I really can't make it now, what I need is this constitutional amendment club to bang me over the head so I make the right choices?

MR. HOLMAN: Just yesterday, House Democratic leaders proposed yet another alternative, exempt Social Security from any restrictions contained in a balanced budget amendment. Votes on all of these measures are expected within the next few weeks.

MR. MacNeil: To debate whether a constitutional amendment to balance the budget makes sense, we're joined by two members of Congress and two economists. Sen. Dennis DeConcini, a Democrat from Arizona, is one of the primary sponsors of the amendment. He joins us from San Diego. Congressman Leon Panetta, California Democrat, is chairman of the House Budget Committee. He joins us from Monterey. Larry Chimerine is senior adviser at DRI McGraw-Hill, an economic consulting firm. He's also a fellow at the Economic Strategy Institute, a think tank in Washington, D.C. He's in Philadelphia tonight, and Lawrence Kudlow is chief economist and senior managing director at Bear Stearns, a New York investment firm. During the Reagan administration, he was a senior official in the Office of Management & Budget. Sen. DeConcini, to balance the budget obviously means cutting programs or raising taxes or both. Why would a constitutional amendment make it easier to do that for the President and the Congress to do what they can't do now without it?

SEN. DeCONCINI: Well, Robin, it won't necessarily make it easier. What it will do is will make it constitutional or unconstitutional not to do it. That's the purpose of this amendment. We have fooled around with this for years and years. And you'll hear the arguments that, well, we should do this legislatively. Well, in 1981, we passed the famous Byrd amendment at the time that said that we would balance the budget every year thereafter, that receipts and expenditures would equal out. We just overlooked those sort of things. With the Gramm-Rudman-Hollings legislation, we just extended it. And that's what happens with legislation. I believe people who take an oath to uphold the Constitution will live by it. And that's whywe have to have this. It has not worked. Not one President has submitted a balanced budget in the 16 years I've been there, nor has Congress come up with a balanced budget of their own, or even close to a balanced budget.

MR. MacNeil: Congressman Panetta, why do you disagree with that logic that no Congressman who's taken an oath to uphold the Constitution will be able to go against a balanced budget amendment?

REP. PANETTA: Because the primary failure here has nothing to do with the Constitution. It has everything to do with the failure of leadership by the President and the Congress to address these tough choices. Why do we have to keep looking for a club to make us do what we should be doing? The fact is that we know what we have to do. We know that there are tough choices involving entitlement programs, involving defense spending, involving taxes. The President of the United States in 1990 challenged both the Congress and the nation to come up with a $500 billion deficit reduction package. It didn't require a constitutional amendment for him to issue that challenge. So my point is, why don't we just understand that the country wants leadership, the President today can present a balanced budget, let's face up to these issues, and not look for an artificial tool or club to force us to do what's right.

MR. MacNeil: Larry Kudlow, is eliminating the budget deficit so important that it should actually change the Constitution to make it happen?

MR. KUDLOW: Well, I, myself, don't think the root issue here is the budget deficit per se. I think the major problem is in the last three years plus, the U.S. economy has hardly grown at all. We've really had an extended period of stagnation, recession, and now very slow recovery, actually less than 1 percent growth since 1988. Because of that, these budget numbers have deteriorated significantly. Government spending has gone up to about 25 percent of GDP, the economy. The budget deficit has gone up to about 6 percent of the economy and 300 billion plus numbers. We made, in my judgment, some major mistakes in tax and regulatory and budget policy. But the key issue is how to grow the economy. And with respect to the question of the budget balancing amendment, I think some fiscal rule making is in order here. I don't think the political process has been working in Washington. And I don't think that's a radical statement on my part. That's what this whole topsy turvy election year looks like it's all about. I note that states, almost all the states have used balanced budget constraints and rather successfully, and when they go astray, it forces a certain government reform. So my feeling is we need to go after the root cause, which in this case is surely the rise in government spending. And I'll tell you what else. I hope that the 1990 summit, budget summit deal, which had large tax increases but failed utterly to restrain spending and which damaged the economy enormously, is not going to be a look at the future. And I think if we can generate some rules, with the special emphasis on the budget side, and to limit the use of tax revenues, I don't think anybody wants to pay higher taxes right now, this would be a good thing. And it would reduce the uncertainty in the economy. A lot of conservatives disagree with this view, but my sense is, unless we deal with the explosion in spending and the deficit, the threat of higher tax rates will suppress investment, will suppress capital formation, will suppress consumer spending. And there's nothing wrong with putting some rules in the process which might create some certainty and even some morality into the fiscal making issue.

MR. MacNeil: Mr. Chimerine in Philadelphia, you don't agree with that.

MR. CHIMERINE: No, I don't, Robin. In fact, I strongly disagree, although as a starting point, Larry Kudlow is right. The economy is in the midst now of a long period of stagnation. But these large budget deficits and the high interest rates they've caused are one reason why. So it is essential to cut the deficits. But I think his analysis of the situation is very misleading, particularly the spending numbers he threw out. Yes, spending has increased dramatically in recent years, but most of that's coming from interest on servicing the debt and on the thrift bailout costs. I mean, I think he's leaving the impression that there's been a whole slew of new spending programs, that his hasn't been the case. There have been sizeable cuts in many programs, but it's being chewed up by the continued growth in health care costs and other entitlements and by interest on this enormous debt we've let accumulate in the 1980s. And there's one other significant point. It is virtually impossible arithmetically to eliminate these deficits without some revenue increases unless you want to gut the government completely. That is an arithmetically correct statement. And there are many people in Congress, and I think Larry Kudlow as well, who are supporting a balanced budget amendment not because they really want to cut the deficit, but because they want to make it more difficult to raise taxes. And if that's the case, it will make it more difficult to eliminate deficits in the future, and, therefore, be counterproductive. So I think we must reduce these large structural budget deficits that are already damaging the economy. I don't see how a balanced budget amendment is going to expedite the process. It probably will delay it by, you know, allowing a sort of political cover for the administration and many members of Congress, saying they're really doing something when they're not, delaying real action, and secondly making it more difficult to raise taxes. And on top of that, even if it were to work -- if I were wrong about this -- it would also be harmful for the economy because we don't want to balance the budget every year. It would destabilize the economy in the long-term and make government planning very, very difficult. There's nothing good that can come out of a balanced budget amendment in my judgment.

MR. MacNeil: Just reply, Mr. Kudlow, to the charge that you're really for it as a way of making it harder to raise taxes in the future.

MR. KUDLOW: Well, I think if you look at the history of the budget over the last 25 years, the revenue share of the economy has been remarkably stable at roughly 17 1/2 to 18 1/2 percent of GDP. What has changed is the outlay or spending share, which has moved from about 18 percent of the economy to 25 percent of the economy. And let me hasten to add the numbers I'm quoting exclude the temporary problem of the bank insurance fund replenishment and the bail out and so forth and so on. What's more, interest rates have come way down in recent years. The real issue here, the real issue here is twofold. On the spending side we've seen an explosion of medical care and Medicaid. Those are the two big culprits, growing at almost 15 to 20 percent average annual rate. And secondly, on the tax side, we had sharp tax rate increases in recent years which, in my judgment, have blunted capital formation and economic growth.

MR. MacNeil: I'm going to go into some of these spending programs in a moment, but, Sen. DeConcini, just respond to Mr. Chimerine's point that a lot of people are for this because it's a kind of political cover to make it look as though you're doing something about the deficit, but not really having to do it.

SEN. DeCONCINI: Well, some of us have been for it for 16 years, since the day I walked in the Senate of the United States. I could see then -- I ran on a balanced budget because I could see it was out of control. And, indeed, it is out of control. My friend, Leon Panetta, is one of those leaders who has truly tried to bring it into control and balance it within the legislative process. But he can't do it. President Reagan, the most fiscal conservative President we've had this decade or generation, couldn't do it. We don't have the capabilities to do that. Now, it would be nice to do it, just say go do it, just let the political process do. It won't work. And I think the reason Ross Perot, and even Paul Tsongas were making the appeals that they were making, they were telling the American public the truth, we're in big trouble, it's going to be painful; it may include raising taxes, limiting the kind of government and the amount of services you have. You've got to do it. I think the American public wants it done. And my contention is, is that that leadership is not there and maybe it's all our fault, but the fact is we've got to do something now. When you see 15 percent of our budget outlays going to the interest and that doubling in the last 25 years, there's a big problem here. When you see the deficit at $4 trillion now, having gone up from 1 trillion just in the last 14 years, we've got some big problems. We can't wait for this so-called "leadership" to come around and bring us to a balanced budget. It isn't there.

MR. MacNeil: Congressman Panetta, the Senator just mentioned what the cost of this might be in political terms, but you've said you would support this if there was also a provision to state that cost right now. Could you just spell that out for us?

REP. PANETTA: That's one of the concerns that I always have when you deal with this issue of constitutional amendment. There are members who will support a constitution amendment, but never vote for any package of reductions or revenue increases in order to implement it. And my concern here is that --

MR. MacNeil: You agree that for some it's just a cover, in other words?

REP. PANETTA: I think there's no question that it's an effort to almost create a political scam where you can say to your people, oh, I was for the constitutional amendment, but never vote on any of the tough choices that, in fact, get you there. That's my principal concern here. I think if you're going to talk about doing a constitutional amendment to balance the budget, it ought to be tied to an actual enforcement mechanism that lays out very clearly how you're going to get there. What are you going to do about Medicare? What cost controls are you going to put on Medicare? What are you going to do about retirement programs? Are we going to limit cost of living increases? Are we going to tax benefits, Social Security benefits, at the high income levels? What are we going to do about defense in terms of additional defense savings? What are we going to do about non-defense spending, and what are we going to do about taxes, revenues? Unless you confront those kinds of choices, then very frankly, well we're doing is kidding the American people. You want to add to the frustration and anger that's out there. Pass a constitutional amendment and then walk away from the tough choices to actually get it done.

MR. MacNeil: Senator, how do you reply to that?

SEN. DeCONCINI: Well, Rob, the point I think is missed here, is that we have not addressed those issues that Congressman Chairman Panetta has clearly pointed out. We haven't done. Now, you can't get the votes. You can't get it. So what do we wait? We wait for the deficit, the national debt to climb to 5, 6, 7 billion dollars, or do we put in an amendment now that would force us to do that?

MR. MacNeil: May I interrupt though for a moment. Would it be fair to the American voter and taxpayer, or honest with us, to pass such an amendment before the election, but only to reveal the price of it after the election?

SEN. DeCONCINI: Well, you know, you have to pass things when you can. We passed this in the Senate in 1982. I managed it on the floor. We lost it in the House. We lost it in the Senate in 1986 by one single vote. They lost it in the House I think by 40 votes or something like that. So we have tried to pass this many times. I think the time is finally here. Whether it's a Presidential election year or not, we've got to take advantage of an opportunity that I think the American public is demanding. They want a balanced budget. They don't care how we get it. They really don't. What they want is they want it, and we have not been able to deliver it, and I think a constitutional amendment will mandate because we do live by the Constitution. We don't live by this year's legislative laws, because we change them every year.

MR. MacNeil: Congressman Panetta.

REP. PANETTA: Robin, I think there is some comparison here with the prohibition amendment. I mean, it's almost as if people are saying, look, I really do need to stop drinking, but the only way I can stop drinking is if we pass a prohibition amendment to the Constitution, and I'm sure I'll stop at that point. Well, we've already tried that in history and repealed that amendment as a consequence. You can't deal with policy failures by simply resorting to the Constitution. We have a lot of policy failures right now, failures in education, failures in the inner city, failures on health care, failures on fiscal policy. Are we always going to have to amend the Constitution of the United States in order to produce the leadership that we need to confront these issues? That's the fallacy of spending all of this time worrying about a constitutional amendment when we ought to be focusing on how we get there.

MR. MacNeil: Sen. DeConcini, just come back on that point, on the Congressman's charge that it's really a scam to pass the -- I know you said this is the time you can pass it -- but to pass it now, without telling the taxpayers and the voters what it'll cost in tough programs or raise taxes.

SEN. DeCONCINI: Well, if we wait around to determine what it's going to cost and how the Congress is going to deal with this after the states ratify it, assuming both Houses approve it with 2/3 vote, we'll hang around forever. And that's my point. We can't hang around any longer and kid the American public. We're passing Gramm- Hollings-Rudman. That's going to balance the budget in '93. Then the beautiful, so-called budget agreement last year, is supposed to balance it in '95 or '96. That was all baloney. We never adhered to that. We never let the sequester come in, because people didn't want to face that tough decision. And now the excuse is, well, you don't have an enforcement mechanism here, so, therefore, you cannot or you should not pass this amendment. There is an enforcement mechanism and it's self-enforceable, the Constitution of the United States. And if you don't feel that it's being followed, you have a recourse to go to the courts. And I don't think that will happen. I think Congress will step up to it because they will get thrown out of office if they don't abide by the Constitution.

MR. CHIMERINE: Robin, may I comment?

MR. MacNeil: Yes, Larry Chimerine.

MR. CHIMERINE: I think what it boils down to is you cannot legislate leadership and you cannot legislate truth in budgeting. And that's what we've missed over the last 10 years. And when you look how we got into this problem, it started out with the misguided policies of the early 1980s, raised defense spending and cut taxes and yet, still balanced the budget, then a whole slew of budget myths and rationalizations that enabled us to delay action and explain our way out of it, then basically dishonest budgeting, we just assumed our way out of the problem, and then plain indifference and neglect. And what will happen if we pass the balanced budget amendment, it's causing more budget gimmickry, more dishonest budgeting. We'll take stuff on budget, and we'll do a whole batch of other things, use more optimistic assumptions, unless the administration is willing to step up to the plate, admit we have a serious problem, provide the necessary leadership and really lay out the necessary policy changes that will bring about a reduced deficit, you can legislate all the amendments and balanced budget legislation you want, we're not going to really solve the problem. And I think that's the lesson we learned in the last --

MR. LEHRER: Larry Kudlow.

MR. KUDLOW: I don't think so. I want to raise two points on this. No. 1, the Constitution makes frequent mention of monetary affairs and fiscal affairs. There's nothing unusual. The liquor prohibition amendment has nothing to do with this issue. The states, the 50 states, almost all of them have these kinds of amendments, and their fiscal affairs are in better order than the federal government. The second point I want to make, it is misleading to the public to suggest deep cuts all over the budget will occur under a balanced budget amendment. There is such a thing called the current services base line, which is an accounting convention established in 1974, which has done more harm to this process than almost anything I know. It is not based on last year's level of expenses. It is based on a five year projection which includes inflation increases, it includes cost plus increases, and policy increases. And it has had a tremendous upward bias to the budget deficit. The public should recognize that merely by slowing the rate of increase of benefits every year, not cutting from last year's level, you still have yearly increases, and all these entitlement programs, but merely by slowing the rate of increase, we can achieve a balanced budget over the next five years, provided that tax policy does not interfere with economic growth. This is a crucial point, because so many people say we're going to wreck the economy. Actually, quite the reverse is happening. Without fiscal rules on spending, without proper recognition of tax incentives and regulatory barriers, we have stopped the economy from growing in the last several years. And that is why I think some sense of rule making, provided the loopholes are closed, provided the enforcement mechanism is good, some sense of rule making and help us get out of this quagmire, because frankly the present status quo position is satisfying no one.

MR. CHIMERINE: Robin --

REP. PANETTA: Robin, could I mention --

MR. MacNeil: Yes.

REP. PANETTA: I really think Mr. Kudlow does a disservice to the American people when he says that somehow it's very easy to balance the budget, all you have to do is just stick to below a current services budget and we'll be there a lot. That is absolute baloney. In order for us to get to a balanced budget by 1997, the Congressional Budget Office tells us we have to cut $600 billion. Now, that either has to be in cuts in entitlement programs, such as Medicare, or retirement programs, you've got to cut defense spending more than we're doing now. You've got to freeze non- defense spending, and you've got to raise taxes. You know, for goodness sakes, Sen. DeConcini, as well as Mr. Kudlow, be frank with the American people about the choices that have to be made here.

SEN. DeCONCINI: Well, I have been frank.

MR. KUDLOW: I'd like to be frank on this exact point. With the exception of the defense function where the level of spending is going to be cut, not the rate of increase, but the level, which is a function of the end of the Cold War and would have happened regardless of this budget balancing amendment today, with that exception, and particularly with respect to the entitlement programs, there will not be anything like 600 billion in real cuts. There will be 600 billion maybe in the aggregate reduced from the current services base line. In other words, if I decide to go out and forecast to myself, I'm going to buy an automobile for thirty or forty thousand dollars, and then I actually go to the car showroom and look at the automobile, kick the tires and look at the price sticker, and decide that I'm not going to buy the automobile, if Congress would score that as a budget cut of $35,000, in the real world, business budgeting is done based on last year's expensing, and I think the public should recognize that the current services base line and all these issues about cuts are very unrealistic. And I can think of no better budget reform than to go back to last year's level and abolish the current services base line.

MR. MacNeil: Sen. DeConcini, I'm going to end with you, since you're the one here who's one of the prime movers of this. Are there enough votes to get a 2/3 majority in the Senate and in the House?

SEN. DeCONCINI: I believe there are in the Senate. We are close. We have people -- let me just give you a quick answer there. We have people who have come on very strong for this who opposed it before for all the reasons that have been given for the opposition here. Paul Simon, the leading sponsor, opposed it in the House in 1982. He didn't think it should be done this way. Now, he is the mover and the shaker. There are many other people who have come to the same conclusion. This amendment requires the President to submit a balanced budget or explain why. This requires a three- fifths vote or a declaration of vote, or military emergency to spend deficit dollars. Now, isn't that where we want to go in this country?

MR. MacNeil: Well, we'll --

SEN. DeCONCINI: I submit to you it is.

MR. MacNeil: We'll see whether your colleagues agree with you. Thank you, all four of you, for joining us. Jim.

MR. LEHRER: Still to come on the NewsHour tonight, more on Ross Perot, Gergen & Shields, and a Roger Rosenblatt essay. FOCUS - SATELLITE STUMP

MR. LEHRER: Now some Presidential politics. Ross Perot continues to draw most of the attention. Today he tested his campaign by satellite techniques. He spoke at an old-fashioned rally in Orlando, but brought in supporters in five state capitals with new fashioned technology. Betty Ann Bowser of public station KUHT- Houston has more.

MS. BOWSER: Montgomery, Alabama, was one of six cities where Perot spent thousands of dollars of his own money to address petition campaign volunteers. Throughout, campaign officials say teleconferencing is the most practical way to reach American voters, more efficient and cost effective, than crisscrossing the country, kissing babies and shaking hands. In Montgomery, the satellite hook-up was difficult to see. But more than 250 supporters were not disappointed with Perot's message which they heard loud and clear.

ROSS PEROT: At this point we just might as well get one thing clear since at the highest levels they are now saying that I'm going to buy the election and that that's obscene. Now, I responded to the national press yesterday and I said, that's a deal I made with you, that if you wanted me to run as your servant, I would run a world class properly financed campaign and then finally with a burst of finesse and tact, since I don't have any hammers, I said, you know, just put it down this way, I'm buying it for the American people. That's it. [cheers] Now, let's get down to what we've got to do in this country to turn it around. If you don't have the stomach for it, then let's not try. But if we don't do it, we're not going to leave our children the kind of country our parents left us. It's that simple. We have got to get the debt under control, pay it down, and pay it off. We now have a declining job base that gives us a declining tax base, that gives us an ever increasing number of welfare users, which eat into the declining tax base. We have got to stabilize the declining job base and stop the decline, turn it around and have a growing, dynamic job base. [applause] Broadly put, if you're breathing, I want you working. [cheers] Watch my lips, in five weeks, you on your own initiative in all 50 states organize this great country and when you look at the leaders and the people doing it, they are just too good to be true. And the political pros still don't know what hit them. Now, I'd like to keep telling the morning glory theory that you're going to wilt and go away, but the facts are your numbers are growing, the enthusiasm is growing, and again, just in plain Texas talk, they ain't seen nothing yet. [cheers]

MS. BOWSER: Although Alabama requires 5,000 signatures for Perot to be placed on the Presidential ballot, volunteers have collected more than 35,000. After the telecast, they marched to the state capital to present the petitions to Alabama's secretary of state, which means Perot is now on the ballot in nine states. FOCUS - '92 - GERGEN & SHIELDS

MR. LEHRER: Now, how it all looks to Gergen & Shields on this Friday night. David Gergen is editor at large of U.S. News & World Report. Mark Shields is a syndicated columnist. They are both in Los Angeles tonight. How did Ross Perot do today, David Gergen?

MR. GERGEN: Jim, I think he did very well. I had a chance to watch the event on television. That's where most people watched it. And it was hokey in many places. It was somewhat amateurish at times, but it had an authentic ring to it. There was a piece of Americana about it all. It's very patriotic. And I think that it gave -- sent the message -- exactly the message the Ross Perot people wanted to send and that is that this is a campaign from the grassroots up. It's not being organized with balloon drops and professional handlers, and whether it's a gathering of citizens, I must say I think all of us were looking at what kinds of people were in those audiences today. There were a lot of whites, but there were also a fair number of blacks. There were a lot of women, and it gave some sense that this was a broader movement than perhaps it's been understood in the past.

MR. LEHRER: Mark, how did it look to you?

MR. SHIELDS: Well, it looked good, Jim, but I think Ross Perot is emerging as perhaps the most adroit politician in this whole field. I'm sure that's a tribute that he would resist, but I mean, the continues to run and rail against the pros while talking to them openly about getting involved in his campaign and he's against all tax increases, except an increase on the spending for education, which, of course, Americans overwhelmingly support. So I mean he's adroitly positioned himself in this campaign in a politically, I think, rather remarkably effective way.

MR. LEHRER: David, how is he holding up to the scrutiny? I mean, he's the -- seldom a day goes by now that the New York Times, in particular, and the Washington Post, in particular, don't have a new story about something either in his business background or in his personal background, not all negative necessarily, but they're looking at him. And has that taken any toll at all out there in the country?

MR. GERGEN: I don't think it has yet, Jim. It may prevent him from expending his base the way he would like. But, you know, the truth is the media elite really has gone after him now and I think that the, particularly the times as you say, but as far as I can tell, this movement is expanding at the point in places like Florida, and Texas, and California, particularly on the West. What the media elite is saying is not sinking in, but many people are beginning to think that he's going to stand up to the press and they like him and they respect him for that. I want to reinforce Mark's point. Jim, I think the man, he's been accused of being sort of an ingenue in politics, but I feel that, you know, we're looking at a man who's much shrewder, and has understood this a lot longer, and I think this is not something that just materialized overnight. It's striking now, Jim. He's been accused by Marilyn Quayle today, for example, of trying to buy the election. We're in a situation right now where George Bush through all of the primaries has spent about $20 million. Bill Clinton has spent about $16 million. Ross Perot has spent about $1.4 million. And here he is in a three-way race, ahead in some of the polls. You have to give him credit for knowing how to play the game well so far.

MR. LEHRER: Is there -- we -- in that little clip that we just saw, he raised the question, Mark, of this being -- some people say, well, he's a morning glory and he's going to wilt, he, not only Ross Perot, but all of his supporters. Is there any evidence of that so far?

MR. SHIELDS: He certainly hasn't wilted thus far, Jim. I think the scrutiny, the power and influence and impact of the elite press has been proved in Ronald Reagan's two landslide victories. I mean, if you recall, he was a regularly roasted caricature and lampooned in the pages of the very papers that you mentioned and many more. And somehow it didn't seem to bother him. I don't think that's going to be his undoing. I don't think that Bill Saphire's attack on Ross Perot's navy career will in any way -- this is a man who went to Annapolis, who fulfilled his obligation with I understand the highest efficiency ratings ever given by the commanding officer of the ship in which he serves. So I don't see that really catching up with him. I do think that he starts --

MR. LEHRER: But wait a minute, excuse me, Mark.

MR. SHIELDS: Sure.

MR. LEHRER: The point that Saphire made and that Richard Cohen, a columnist in the Washington Post, made, and other people have made, that those kinds of issues about, in this case Perot specifically trying to get a four-year obligation as a result of the U.S. government paying for his education at Annapolis, he tried to get out in two years, if Bill Clinton had tried anything like that, the world would have come to an end and to a standstill while he had been beaten about his head and shoulders. And this was kind of a one-day story. Nobody seems to care.

MR. SHIELDS: Well, let me just suggest -- let me just suggest that Mr. Saphire and Mr. Cohen are sorely mistaken on this issue. Ross Perot signed up, as I understand it, and from my own reporting, he had an obligation for two years as a graduate of Annapolis, which was extended for four years as a result of the Korean War. He graduated in 1953. Upon graduation, he went on a destroyer to Korea. After his two years was up, which was his original commitment, the war was over, and the inquiry was made whether, in fact, the obligation continued, because it had been extended because of the war. The war had ended. It was as simple as that. And I really don't see -- you know, I don't see that in the same category as, quite frankly, somebody -- and I say this as somebody who admires much about Bill Clinton -- but who forget that he ever received a draft induction notice. So I don't think, I don't think that's what's going to catch him. What's going to catch him is as he defines himself, and that whether, in fact, Americans, who are very tolerant people think that somebody who is gay ought to be excluded from -- Perot again has it kind of both ways. He says he would not have gays in sensitive positions, or those who have committed adultery in sensitive positions of leadership in his administration, yet, at the same time he says what people do in their own private life is their business. Well, it's kind of, you know, both ways. I don't know where you draw the line then. How about a recovering alcoholic?

MR. LEHRER: So, David, do you agree with Mark that Ross Perot either makes it or breaks it from this point on with what comes out of his mouth?

MR. GERGEN: Absolutely. I do believe this is very much a race about character, Jim, and I think that's what's hurting Bush is he is seen to be weak in his public character, in the way he conducts domestic policy. Bill Clinton seems to be weak in his private character. And Ross Perot is seen as a man of strong character in both his public and his private life. If he starts stumbling around on the public side, seems uncertain of what he's talking about, seems confused about the facts, if he seems, as on this comment about the gays, I think while in many instances that will win many votes in some parts of this country, it may suggest to a lot of people who were not, you know, pro homosexuality, that he's intolerant. And I think that kind of question which goes to character could hurt him in the end. So I think he's got to -- he has now got to define more clearly not the personality -- because I think we're getting a sense of that -- I think he has to define much more clearly what his strategy, what his principles are for a public life.

MR. LEHRER: Yeah. David, speaking of strategy, both of you all are out in California. What does Bill Clinton do about the Perot phenomenon at this point?

MR. GERGEN: Well, Mark, do you want to --

MR. SHIELDS: I'd be happy to. Bill Clinton faces a challenge, but so does George Bush. The very issue that David mentioned here and that is that the question of rights of gays or question of family values, those are the fundamental base of the Republican Party. I mean, George Bush has lost the anti-tax coalition the Republicans have. In order to find a Communist, Jim, in 1992, you've got to go to a theme park in Albania, so you don't have that issue anymore. So you're really back to family values, and all of a sudden if Perot walks in and steals his clothes on that issue, then you'll find probably Dan Quayle attacking the Victoria Secret Catalogue. I don't know. Bill Clinton has serious problems that Bill Clinton has to define in a hurry. He has to define what he stands for and why he's different. And he's got to stay on that. And boy, I'll tell you, that is a matter of absolute urgency, because I think and David has said it earlier, he runs the risk soon of being marginalized and becoming the third guy in this race.

MR. LEHRER: You're talking about Bill Clinton.

MR. SHIELDS: Yes.

MR. GERGEN: He's not only the third guy in this race, but down as the third guy. He's 10 points behind in many states. He's only had that, Jim, in a couple of states, Bill Clinton, as he had in Arkansas and Louisiana, you've got Perot ahead in much of the West, Bush is ahead in much of the East. Bill Clinton has a serious problem. Jim, I think he probably ought to use -- Bill Clinton should probably turn to one of the mechanisms that Ross Perot's turning to. He has to turn to television I think pretty soon. I think he probably has to buy some time, go on television, make a speech to the country, shortly after he wraps up this nomination, say who he is, and begin to redefine himself. I think the events that he's doing day to day simply are being overshadowed by Perot.

MR. LEHRER: Is it that Perot has taken his issues, or is it just that Perot is the only one that's being heard right now?

MR. GERGEN: He's being heard, Jim, because he's saying things in a way which are much more direct. They're more candid and they come through. People are interested. He's the hottest subject here. I was in Europe this past week and I'll tell you, Jim, everybody in Europe is now asking: Who is Ross Perot? And you come here to California -- Mark and I have experienced this -- everybody is talking about Ross Perot. It's the hottest story out there. There's a phenomenon. Everybody understands that now.

MR. SHIELDS: The problem, Jim, for Bill Clinton that Perot represents is this. Bill Clinton makes the argument that we need change. All right. 83 percent of the American people think the country's headed in the wrong direction. They don't believe George Bush is the agent of change. If they really want change, however, they say, why go to a politician, even though one has been successful, and governor, and respected governor, ironically the credential of being the most respected governor by your colleagues in 1992 becomes a liability instead of an asset. And so I say, if I really want change, then I'll go to Perot! And that's what people are saying. Perot also gets marks as the guy would could somehow clean up Washington, do something about the debt, and improve the economy, all of which ought to be advantages to the out party when there's only a two-man race.

MR. LEHRER: But what about this issue, David, that's being raised time and time again about Perot? And he did it again today. There was still no -- he just says we've got to reduce the debt and we've got to put everybody back to work, and then moves on to something else. There are no specifics there. Clinton has laid out specifics. President Bush has laid out specifics. But Perot does not, up to this point.

MR. GERGEN: Jim, there's no question that the time is clicking now. The sands of time are running out when he's going to come up with some more specific positions. He's clearly now, as we know, reaching out in all sorts of directions across this philosophical spectrum for advice. He's reaching out to Felix Rohyatyn in New York, an old friend, a financial wizard in New York, and a man who believes, and many people believe he would be a secretary of the treasury in a democratic administration. At the same time he's reaching out to Pat Choate, quite a conservative, anti -- you know, he's written some tough things on Japanese, so I do think that soon, within a matter of weeks, Ross Perot must wrap together some things and have a package to say this is what I really -- this is the direction I'd like to go down on the budget, this is the direction I'd like to go down on the economy for a strategy of growth. I don't think he has to have all the specifics, but he has to have the major planks of a position. And I don't think that's just to please the press. The public is soon going to demand that as well.

MR. SHIELDS: But, David, there are those who disagree with you. They say that that's just -- that's just us talking -- that's just us media elite talking, that the public does not care about, you know, programs and specifics; they want -- they are, the thing that they like in Perot is just the opposite of that.

MR. GERGEN: Well, right now, many people are mesmerized by the personality. He has an incandescent personality. He's the strongest personality in this race. And I think that for a while there's going to be a cult to the personality. I think we're going to see that for a few more weeks. Gradually, Jim, we know all of these stories begin to change. Things -- people's interests begin to move on to the next subject, and the next subject is going to be, okay, he seems like a very attractive fellow, but what is he really going to do as President, what kind of President would he be? I think he can define that through positions. He can also define that through the kind of advisers he brings in with him.

MR. LEHRER: I've just been advised we have to go. Gentlemen, thank you both very much for being with us from Los Angeles. ESSAY - ALL IN THE FAMILY

MR. MacNeil: Finally tonight, essayist Roger Rosenblatt looks at all the attention recently focused on family values.

MR. ROSENBLATT: In a recent now famous speech in San Francisco, Vice President Dan Quayle blamed the riots in Los Angeles on the breakdown of family values. He also blamed Murphy Brown for bearing a fatherless child. And while that comment drew all the fire, it really was more in the nature of an aside. Mr. Quayle was focusing on family values and so are a lot of people these days, politicians especially, not that the term has any real meaning. It's just that a lot of people are talking about it, the purveyors of "can't have it" that something called family values lies at the center of all America's woes and cures. This assumes, of course, that family values are by nature fixed, stable, and good, and that they are only exemplified by the solid, nuclear family -- not. For one thing, apprising of family values depends on what family you happen to be talking about. I'm sure that there are plenty of absolutely perfect families around like yours and mine. But then there are so many others that fall short of the mark. The Walker Spy family comes to mind. Family values did not seem to deter the Walkers from turning on their country, which recalls Julius and Ethel Rosenberg, not only a nuclear family, but nuclear traitors as well. The Medicis were a nuclear family, as were the MacBeths of Scotland and the Oedipus Rexes of Greece. The world may have been enlivened by the presence of such families, but their values, well -- Then again, the White House has contained some questionable families, itself. The Kennedys had their difficulties, so did the Carters. Think of all the headaches Jimmy got from brother, Billy. According to the children, most recently daughter, Patty, the Reagan family was often short on values. As for the Bushes, the values of the children in their financial dealings have been, to say the least, a problem. But the whole question of family values has become so generalized as to be meaningless. Any family's so-called "values" are merely the product of the values of a particular people, gathering in a particular social unit. If your family values tell you to loot and riot, you may loot and riot with the spur of family support, every value adhered to. If family values tell you not to loot and riot, you may do so anyway. Values only go so far. But most families do not have fixed, inflexible values in the first place. And the best of them always show certain values that are available to modification and change. Here are small groups of people collected in a tenuous, fluid structure, each individual life a network of competing problems and values. Not only is the notion of a monolithic, rock solid family a strange one, it can, when realized, produce a nightmare. Who can forget the terrible picture some years ago of the fanatical religious family out West which displayed its shared cohesive values by jumping out windows? Of course, Mr. Quayle was talking politics, not sociology. So one is not meant to take him at his word. If anyone were serious about the unassailable virtues of the nuclear American family, it would be hard pressed to find an exemplar. What would be found, instead, are normal people, struggling in most cases to do and be good, collecting themselves around the supposition that a family, no matter how it is composed, establishes and multiplies its strength by listening to one another, by paying attention to other families, and by encouraging every member to be fair, honest, kind, all the conventional stuff. A single mother can promote such values, so can a single father, so can a family of one. I'm Roger Rosenblatt. RECAP

MR. LEHRER: Again, the major stories of this Friday, House Democrats accused the Bush administration of trying to appease Iraq before its invasion of Kuwait and Serbian forces continued their bombardment of the Bosnian capital, Sarajevo, and the Croatian City of Dubrovnik. Good night, Robin.

MR. MacNeil: Good night, Jim. That's the NewsHour for tonight. We'll be back on Monday night. I'm Robert MacNeil. Good night.