The NewsHour with Jim Lehrer

MR. LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight the budget impasse continues. Kwame Holman updates the story, Paul Solman interviews two Wall Streeters about a possible government default, then that and other political stories of the week as seen by Mark Shields and Paul Gigot. A human rights activist is among nine people executed in Nigeria. Charlayne Hunter-Gault covers that. And Marcia Clark and the big bucks books. Elizabeth Farnsworth talks to Maureen O'Brien of "Publishers Weekly." It all follows our summary of the news this Friday. NEWS SUMMARY

MR. LEHRER: The budget collision remained right on course today. Congress extended the nation's debt limit, but President Clinton said the approach was unacceptable.

PRESIDENT CLINTON: Last night, Republicans in Congress voted to raise Medicare premiums. They voted to cut education and to cut it deeply, and they voted to overturn three decades of bipartisan environmental safeguards. Beyond that, these measures would make a government default almost inevitable for the first time in our history because they take away from the Secretary of the Treasury tools now available to avoid default under extraordinary circumstances. This is deeply irresponsible. It has never happened before, and it should not happen now.

MR. LEHRER: Mr. Clinton called on members of Congress to work through the weekend to remove the provisions he finds unacceptable. Republicans said they'd done their work and tweaked the President for playing golf this afternoon.

REP. NEWT GINGRICH, Speaker of the House: If he signs these two bills, the debt ceiling is raised, the government continues. If the President gets done golfing, decides to actually work for a few minutes, and take on his shoulders vetoing these two bills, then, frankly, it is his responsibility, because the Congress has done its job.

SEN. ROBERT DOLE, Majority Leader: We sent the President two good provisions, two good bills. It's up to him. As I said yesterday, if the government shuts down, his fingerprints are going to be all over the place. It's up to him. All you got to do is take a pen and sign it.

MR. LEHRER: That other bill at issue is a stop gap spending bill. It must be signed by Monday night to avoid shutting down the government. The House passed that bill today too, but it has to go back to the Senate for some revisions. We'll have more on the story right after the News Summary. Officials of Bosnia and Croatia agreed today to strengthen their 1994 federation agreement. Sec. of State Christopher made the announcement at Wright-Patterson Air Force in Dayton, Ohio, where the Bosnian peace talks are underway.

WARREN CHRISTOPHER, Secretary of State: As it is implemented, today's agreement, as I said, brings the federation to life. It will create common political and economic institutions that will unite the two communities. It will be a model for interethnic cooperation and will build renewed trust in a community that is very much in need of both. This agreement today is not the final peace that we're seeking here, but let me emphasize, it is a very important first step down that road.

MR. LEHRER: The agreement calls for two ethnic zones, one of Bosnians and Croats, the other of Bosnian Serbs. It also reunifies the Southern city of Mostar and allows for the return of displaced refugees. Israeli police have arrested a sixth suspect in the assassination of Prime Minister Rabin. The right-wing student was arraigned today in a Tel Aviv court. Police said they plan to charge two men with murder, the other four with conspiracy. Support for the peacemaking process among Israelis has jumped since Rabin's murder. An Israeli newspaper poll says 74 percent of the people asked are in favor of continuing the peace process, compared with 51 percent in September. President Clinton today recalled the U.S. Ambassador to Nigeria and cut off military sales to the country. It was to protest the Nigerian government's execution of activist/author Ken Saro-Wiwa. Eight other men were hanged today with Saro-Wiwa. All nine were convicted two weeks ago of killing four people at a political rally last year. Saro-Wiwa insisted he had been framed. Political leaders and writers from around the world had demanded that Nigeria's military ruler stop the execution. We'll have more on the story later in the program. Hazel O'Leary is still the Secretary of Energy. She told reporters today she was assured by White House officials that she would not be fired or asked to resign. Yesterday, it was disclosed the Energy Department had paid $43,000 to consultants who evaluated news stories about the agency and rated reporters who cover it. O'Leary said she'd been taken to the woodshed over the episode.

HAZEL O'LEARY, Energy Secretary: The question is: How seriously have I been taken to the woodshed over this? Well, I've been woodshedded pretty heavily by the press. I've been woodshedded pretty heavily by the Congress of the United States. I think you've focused on the very negative effect of this attempt at analyzing how well we communicate with our public.

MR. LEHRER: The U.S. Navy will take a day off to reflect on ethics and behavior problems. It's the result of several embarrassing episodes. The most recent was a charge of sexual assault against a Navy petty officer aboard a commercial airliner. Adm. Mike Boorda, chief of naval operations, ordered the day of reflection. He defended his men and women in a broadcast interview earlier today.

ADMIRAL MIKE BOORDA, Chief of Naval Operations: I want to haveour Navy in a leadership way take a top-down look so that every single person gets a chance to look at the standards again, gets a chance to look at what is required of them, both as leaders and as people who are supposed to obey those standards.

MR. LEHRER: The stand-down, as it is called, will take place sometime next month. It will be done on a rotating basis by naval units around the world. Tomorrow is Veterans' Day, but today was the official closings day at most federal offices. Today was also the 220th birthday of the U.S. Marine Corps. That was marked this morning with a wreath-laying ceremony at the Iwo Jima Memorial in Washington. And that's it for the News Summary tonight. Now it's on to the budget impasse and a possible government default, Shields & Gigot, the Nigeria executions, and millions for books. FOCUS - BUDGET IMPASSE

MR. LEHRER: First tonight, debt and default as seen from Washington and Wall Street. Kwame Holman begins with the Washington end.

MR. HOLMAN: They're well aware that President Clinton will veto it, but House Republicans went ahead this afternoon and pushed through an extension of the debt ceiling. It would enable the government to borrow enough money to meet a $25 billion interest payment and prevent it from defaulting on its debt for the first time in history.

SPOKESMAN: All time is expired on this vote. The yeas are 219; the nays are 185. The motion's agreed to.

MR. HOLMAN: The bill's most controversial provision would end the Treasury Department's ability to dip into government trust funds to meet loan obligations in times of fiscal emergency.

REP. BILL ARCHER, Chairman, Ways and Means Committee: The Treasury Department right now is planning to raid the Civil Service Trust Fund as a circuit breaker to avoid breaching the debt limit. But this circuit breaker is really a high voltage wire that directly taps into retiree trust funds. In time, the administration may be even tempted to raid the Social Security Trust Fund. And currently, the law does not protect the Social Security Trust Fund, but the provisions in this bill do. The provisions prevent the Secretary from the Treasury from ever raiding the Social Security Trust Funds.

MR. HOLMAN: But House Democrats say removing the Treasury Department's flexibility could cause a financial disaster.

REP. JAMES MORAN, [D] Virginia: These provisions were enacted by President Reagan in 1987, when we had--that's the last time we had the most serious debt ceiling crisis. This debt ceiling extension takes away those provisions. Now, there's an article in the "Post" today. It says analysts, financial analysts, say the United States is unlikely to default. It talks about how blase they all are. The reason they are is because they are assuming that those provisions enacted in 1987 are still law. In other words, we can borrow from other trust funds so as to get us by a crisis. And then there is a law that requires that that money be paid back to those trust funds. This debt ceiling bill repeals those provisions. That's why it has to be defeated. That's why it has to be vetoed.

MR. HOLMAN: And Democrats contend Social Security is one trust fund the Treasury Department has vowed never to touch.

REP. SANDER LEVIN, [D] Michigan: The Social Security argument is a complete sham. You were there when the Treasury Secretary assured through his representatives this country under no circumstances will Social Security be touched, and you get up here and make that argument.

MR. HOLMAN: Not included in this bill is a provision to eliminate the Commerce Department. Freshman Republicans had demanded the provision be included but backed away because it lacked support in the Senate.

REP. SAM BROWNBACK, [R] Kansas: We received assurances from the Senate leadership that they will push for the elimination of the Department of Commerce the next available opportunity this year. So I urge my colleagues to vote for this temporary debt ceiling.

MR. HOLMAN: And once the votes to pass the debt ceiling extension were assured, members used the rest of their time pointing fingers, placing blame, and charging irresponsibility and blackmail.

REP. ROBERT WALKER, [R] Pennsylvania: What we're hearing from now are the debt junkies who for 40 years ran up trillions of dollars worth of debt and gave us the situation that we're now in, and now are out complaining about, about the process. It's fascinating. They not only ran up trillions of dollars worth of debt, but then they were such debt junkies that they adopted what was called the Gephardt rule so that they put the entire debt of the United States on automatic pilot. And so any time we had to have more debt, we simply passed it and kind of deemed the debt to have been passed under the Gephardt rule. These debt junkies wouldn't even bring bills like this to the floor, because they didn't want to go through the agony of ever raising the debt, and the debt swelled by trillions and trillions of dollars.

REP. HAROLD VOLKMER, [D] Missouri: I first wish to address my words to the person I believe in this country who has worked the hardest for the last two years to bring our economy to the great economic conditions that we have today, and that's our President of the United States, Bill Clinton. And what the Republican leadership is now proposing to do is to put him on the hot spot, to say if you veto this, then we may have a default in our bonds and our Treasury notes and the economy may go to blazes. Well, Mr. President, I want to tell you that I stand here today urging you to veto this lousy bill.

MR. HOLMAN: And the President will, possibly as soon as it gets to his desk this evening. FOCUS - DEBTOR NATION

MR. LEHRER: Now, our economics correspondent Paul Solman of WGBH- Boston gets some Wall Street perspective on this Washington collision.

PAUL SOLMAN: Well, we're joined now by two representatives in the New York financial community. David Jones is one of them. He's chief economist at Aubrey Lanston & Company, a bond investment firm. And Kenneth Langone is chairman and managing director of Invemed Associates, an investment banking firm, who's also serving as the chairman of fund-raising for the Dole campaign in New York State. Gentlemen, welcome to you both. David Jones, you've been here before. And our program last night, Leon Panetta said a default would be a catastrophe for U.S. credit, for U.S. financial markets, while Republican Senator Trent Lott said it wouldn't be a big problem at all. So who is right? Why?

DAVID JONES, Wall Street Economist: Panetta is clearly right. U.S. Treasury Securities are really the keystone for the world, risk-free securities, at least up until this point, no credit risk whatsoever. If you want the best quality security in your portfolio, if you're holding a mutual fund, as a U.S. investor, if you're a foreign central bank, or a foreign investor, the Treasury credit has stood higher than any other in the world. Now, just talking about the threat of default, you don't even need to move to the moment of default, begins to shake the faith in those securities.

MR. SOLMAN: Can we just step back a second and talk about what these securities are. We're talking about U.S. Treasuries. What does that mean, Mr. Langone?

KENNETH G. LANGONE, Investment Banker: It means securities issued by the United States Government. Let me say this.

MR. SOLMAN: These securities mean IOU's, bonds, bills?

MR. LANGONE: Yeah, bonds, notes, your Series E savings bond, anything at all if the government promises to pay you back for money you've loaned them.

MR. SOLMAN: And there's a level--there's a ceiling on how much of those--

MR. LANGONE: There's a ceiling on how much debt the government can issue. But let me say one thing. This notion of a default's been on the front pages now for five weeks, and I disagree with David in one sense. The bond market is at one of the strongest periods I can recall in the last few years.

MR. SOLMAN: And by that, you mean what?

MR. LANGONE: That bond prices have gone up and the cost of money to the Treasury has gone down.

MR. SOLMAN: So the interest rate the government pays has gone down.

MR. LANGONE: Gone from 6.6 percent on long bonds down to about 6.32 tonight. That's a very dramatic move in a very short period of time.

MR. SOLMAN: And what does it mean?

MR. LANGONE: Well, it means to me that people aren't really concerned that much about a default because, you know what, there isn't going to be a default.

MR. SOLMAN: But explain that. Why are people--why does that show that people aren't worried?

MR. LANGONE: Well, for two reasons. No. 1, I think both parties understand, as David said, the implications of the severity of a default.

MR. SOLMAN: No, but I want to get an understanding of why does it mean that people aren't worried if the amount of money the government is paying in interest on its bonds goes down.

MR. LANGONE: No, no, they worry about that, because that drives the deficit as well. The more money the government pays to borrow, the higher the deficit. So ironically, the lower the cost of money, the more you help bring yourself out of deficit. But the issue I'm saying is that the bond market is not terribly concerned about the scariness.

MR. SOLMAN: And that's why--so the government doesn't have to bid higher and higher interest rates.

MR. LANGONE: Well, forget the government right now. After the government issues securities, it's the free market that determines the value of those securities.

MR. SOLMAN: And people are saying they're safe.

MR. LANGONE: The market is saying that those securities are more valuable tonight than they were five weeks ago.

MR. SOLMAN: Okay. And that means that the market isn't scared that the government's going to default.

MR. LANGONE: I don't think it's scared.

MR. SOLMAN: David Jones.

MR. JONES: The market in the last couple of days, the market's been shrugging, I totally agree, the market's been shrugging this off for some time, but just in the last couple of days, we're starting to get to the point where we're facing that possibility next week. And, in fact, the markets began to weaken. Bond prices came down. Yields went up. If you're a mortgage borrower, as a result of that--

MR. SOLMAN: Yeah. I have a variable mortgage.

MR. JONES: --of that increase that we've seen in the last couple of days, you will pay more. Now, the question is: when we come to the moment of truth, when we get close to the moment of default, how will the world behave toward our debt? Two things have happened that have given us a little bit of a warning signal in the last couple of days. Our dollar has fallen, meaning foreign investors are starting to get out of our dollar securities and go into German mark bonds, or perhaps Swiss bonds in order to find a stronger currency to be able to weather the storm.

MR. SOLMAN: Because they want to be safe?

MR. JONES: They want to be safe. And the safety in U.S. Treasury securities, even by threatening default, is beginning to come into question. That means that what I think we'll see next week and one of the points I want to make here is it's not going to be over next week. We're going to have a temporary increase in the debt ceiling. We're going to have perhaps a government that is shut down in terms of 800,000 employees temporarily at least on furlough, indefinitely perhaps on furlough, and there's going to be more and more publicity and more and more uncertainty. My feeling is that it was wrong to use the debt ceiling as a tactic to force the Republican deficit-cutting plan through the President. Now, I agree with cutting the deficit. I'd like to cut in five years to zero, instead of seven years. But the idea of using the debt ceiling, threatening default in the strongest debt in the world, Treasury securities issued by the strongest government in the world, simply was a big mistake.

MR. SOLMAN: Mr. Langone is dying to get in here.

MR. LANGONE: Well, let me say this to you. I think the softness in the market the last two days because the nice thing about the market we all can have an opinion of why it does something. Nobody can prove you right or wrong.

MR. SOLMAN: So the fact that the government's paying a little more the last couple of days--

MR. LANGONE: I believe that the reason that the market, the bond market, has been a little choppy the last couple of days--

MR. SOLMAN: Right.

MR. LANGONE: --has been principally because of the propaganda. Where it appears with the polls that the administration is putting out, where it appears that the President has the upper hand and we aren't going to get the, the deficit reduction, what the market wants, because I think there's greater risk to our market over the long-term, is the deficit, not the threat of default.

MR. SOLMAN: So you think that if we actually--let's say we went into default--I know you think this is impossible--

MR. LANGONE: We won't.

MR. SOLMAN: --it's impossible. Let's say we got close enough so people were really scared that that was going to happen.

MR. LANGONE: Right.

MR. SOLMAN: Then you think that the government wouldn't have to pay lots and lots more in interest for its--

MR. LANGONE: I believe this. I believe that if the--if God forbid, we went into default, and it was a step toward an end game of bringing the budget into balance, I believe a lot of people around--I think the first few days you'd really have some uneasiness, but I think when the dust settled and people looked that it was being part of a process of coming to grips with the deficit, I think that the--that the demand for government securities over the long-term would improve.

MR. SOLMAN: And if the demand improved, then we'd have to pay less--

MR. LANGONE: Then the cost of money would go down. Now that's a matter of an opinion, but I feel strongly that the last couple of days has been principally this very fierce propaganda machine that's been out there working, using the polls that the American people are afraid of cuts and everything else and people saying, hey, wait a minute, it looks like the President's got the upper hand, it looks like they aren't going to be able to cut the deficit, and, therefore, rates are going to go back up.

MR. SOLMAN: Okay. Let's talk to our audience a little bit in terms of who would be affected. You mentioned this 800,000 and so forth. You mentioned my variable mortgage would go up. My parents' Social Security, what about that?

MR. JONES: Well, that's not going to be affected in any significant way.

MR. SOLMAN: Okay.

MR. JONES: Trust funds, including Social Security, if the government has to come to the last moment before default, may temporarily have their debt reduced and the interest on our Social Security Trust Funds will not accumulate for a while, but there's already been a law passed that said the government has to make good on that interest that we lost. So Social Security is solid. No one is going to any longer run sense lose. But what I'm trying to say, what I'm trying to say is if you're sitting there in a mutual fund, holding a bond, a U.S. government security--

MR. SOLMAN: Right. That's my pension fund.

MR. JONES: --you bought that as the most secure instrument that there exists perhaps in this world.

MR. SOLMAN: Right.

MR. JONES: And suddenly, the talk--and I'm not part of a propaganda machine--I'm just a bond trader sitting there in the--

MR. SOLMAN: Right.

MR. JONES: --pits on Wall Street. The point is if there is even the threat of that possibility, that the U.S. Government will not pay when that bond comes due, what does the mutual fund do? Ask yourself. The mutual fund--you've given your money to a mutual fund.

MR. SOLMAN: Right.

MR. JONES: The mutual fund has invested in government bonds, and the mutual fund is expected to be paid off when those bonds come due, so they can pay you back if you need your money.

MR. SOLMAN: And so--

MR. JONES: What if the government doesn't pay?

MR. SOLMAN: So I might call up you with a mutual fund and say, hey, take my money out of government bonds and put it somewhere else.

MR. JONES: But the point is the mutual fund can't pay you, and so all I'm trying to say is there will be a lot of nervousness. I've had requests from international portfolio managers who say I'm not counting U.S. Treasury securities as risk free any longer because we've had a threat of default. I've had people call me and say, are my government securities still good, will the government pay off debt, so I'm arguing that the technique or the tactic of using default to try to get a very noble purpose done--and there's no disagreement on the idea of reducing the budget deficit, and the Republican Congress is doing the best job of trying to move in that direction, all I'm saying is don't use default, don't use the creditworthiness of the U.S. Government to try to force the President to accept the Republican deficit-cutting plan, have a debate, vote for it, and push it through that way.

MR. SOLMAN: Look, Mr. Langone doesn't think there's going to be a default. People on this show for months, as he points out, have been saying there isn't going to be a default. Do you think there's going to be a default?

MR. JONES: I don't think so, but the threat of it--the fact that there's a small chance of it begins to change the attitude forever for Treasury securities, and it's going to cost the Treasury more to borrow for a long period of time.

MR. LANGONE: That threat's been out there for certainly the last five weeks. Dan Druckermill and I ran an ad in the "Washington Post" five weeks ago addressing the issue of a train wreck, which is what a default is called in slang. The fact of the matter is the bond market's been extremely strong. I have a wish list. There are two things on it. Let's stop playing games with each other about whether there's going to be a default or not. There is going to be no default. Let's make everybody comfortable. And the second thing, let's stop labeling an increase in Medicare spending by 45 percent over the next seven years as a cut. Let's stop frightening people that they're going to lose their health insurance. This is horrible. I mean, for example, I'll give you a for instance on game playing. They're on an airplane 25 hours together, and they don't- -

MR. SOLMAN: Who?

MR. LANGONE: The President and the Speaker of the House and the Majority Leader on a plane 25 hours together last weekend. Why didn't one or the other say, hey, let's sit down and talk this-- we've got 25 hours to kill--let's talk?

MR. SOLMAN: Well, this is the economic segment, not the political segment.

MR. LANGONE: No. But I'm saying--but they're intermingled. You can't--you can't separate them.

MR. SOLMAN: I'll tell you. When you hear things like that. I listen to that and I say, well, gee, maybe there could be a default, in which case--

MR. LANGONE: There isn't going to be a default.

MR. SOLMAN: Well, you know, why did the "Financial Times" today, they're all worried about it. Their Lex column, which is pretty conservative usually, "If the U.S. did default, the impact on bond markets would be severe, finances to investors who depend on the precise timing of interest receipts would be messed up. Confidence in the U.S. Government's word for default," just what he's been saying, no?

MR. LANGONE: That's one guy writing. They're also writing about cuts in Medicare. They're not cuts.

MR. JONES: All I'm trying to say is that it's a simple issue. If there is a threat there--and by the way, I don't think the government can necessarily control this process as easily as they think. What if somebody that has benefits coming to them in Social Security says I'm going to challenge this ability to dip into these funds temporarily to make room to borrow enough money to avoid default, what if a federal judge says, no one can dip into this? That would change the whole trajectory of this thing, and would make a default more probable.

MR. LANGONE: It could unravel.

MR. SOLMAN: It would unravel.

MR. LANGONE: But it won't. It's not going to happen.

MR. SOLMAN: Well, if it could, then--

MR. LANGONE: Let's deal in likelihoods. Okay. It's not going to happen.

MR. SOLMAN: And the likelihood--

MR. JONES: I think the likelihood is small but gradually increasing, and that's going to worry the world, and it's going to make our markets very unstable, rates higher, stocks--bond rates higher, stocks down, and the dollar down.

MR. SOLMAN: Well, okay, gentlemen, that's all the time we have. Thank you both very much.

MR. LEHRER: Still to come on the NewsHour tonight, Shields & Gigot, the Nigerian hangings, and writing for big dollars. FOCUS - POLITICAL WRAP

MR. LEHRER: Now some analysis of this budget stand-off and other political issues of the week from Shields & Gigot, syndicated columnist Mark Shields, "Wall Street Journal" columnist Paul Gigot. So, Mark, the train wreck between the President and the Congress is going to come off as scheduled, is that right, sir?

MARK SHIELDS, Syndicated Columnist: It looks like we're going to have a collision, Jim, at least a--a fender bender for sure, and what's fascinating is that you can see the two competing sides. We heard it just in Paul's interview with Mr. Jones and Mr. Langone. It's forming this way. It's budget cuts on one side, the Democrats are saying, my goodness, they're going to cut Medicare, it's going to be cruel and harsh, and the Republicans on the other side arguing a balanced budget, and it just strikes me right now, given the political dynamic at work, that the Republicans are discovering painfully what Bill Clinton discovered, and that is people in the abstract want a balanced budget, but Clinton, who cut the deficit three years in a row, boy, he got a lot of political payoff for that, didn't he, and I really question whether, in fact, when you stack up the two, whether you're for Medicare cuts--call it what you want, or cutbacks in--

MR. LEHRER: Slow the rate of growth, I believe is--

MR. SHIELDS: Slow the rate of growth, however you want to put it.

MR. LEHRER: Okay.

MR. SHIELDS: Versus a balanced budget, I think people really are coming down on the former.

MR. LEHRER: Do you agree with the political reading, Paul?

PAUL GIGOT, Wall Street Journal: If that is true, then the election of 1994 didn't mean a lot, and the Republicans have been misguided this whole nine months. I mean, right now, Republicans are putting on the table exactly what they said they would do in 1994, and I think what they see this whole potential government shutdown doing is finally forcing the President to choose. See, he's had it both ways for a long time now. He's been able to say, I have--I'm for a balanced budget, I'm for reducing the size of government, and I'm for tax cuts. But he doesn't have to make the choice of actually signing a bill that does all those things. And what they want to do with this, this bill put on his desk and, and draw it to a climax, is have that big philosophical level discussion, not get caught in the weeds of the details of the budget but say, do you want this government to be smaller, do you want the balanced budget or not.

MR. LEHRER: But who's getting the message over? Just the merits aside, would you agree with Mark that the President's got the edge right now, or you disagree?

MR. GIGOT: I think what's happened is for a long time here, for two or three months, the Republicans have been knocking around in the weeds of the legislative process. The President has been standing above it, and he's been scoring some points. And I think the Democrats have had the better part of the argument here for a while, and that's why the Republicans want to kind of rejoin the debate--

MR. LEHRER: On the balanced budget issue.

MR. GIGOT: And on the philosophy level.

MR. LEHRER: Mark, what about the--just the public issue here? Isn't what's going on here in Washington just exactly what the American public said in 1994, the elections, and have been saying otherwise they're tired of this, this kind of collision form of government?

MR. SHIELDS: Yes. Yes. It is exactly. It's what they said in 1992. It's what they said in 1994. I mean, if you really want to borrow a page from it and not rob Paul of a great philosophical discussion here, but it--Republicans now are in a position where Bill Clinton was on national health. Bill Clinton came up with a plan, Bill Clinton came up with the idea, and the other sides sat there and criticized and carped and found faults and found fault lines, and made it less popular to the point where it became politically radioactive, and that's exactly the tactic the Democrats have followed on this one. They're saying, hey, look, widows and orphans are going to be turned out in snow banks if that's what the Republicans want to do. And so the Republicans themselves saying, well, where's your plan, and we're just back to where we were a year ago.

MR. GIGOT: I disagree with that, Jim,in a couple of ways. It was a Democratic Congress that couldn't pass the President's health care bill. The Republicans here still seem reasonably unified. I mean, they're going to be able to put something on the President's desk and force a choice. The other thing, I think the Republicans feel, and I tend to agree, that they begin to win when the government shuts down because that is not business as usual. That really is something that gets people to pay attention and says, well, maybe change--

MR. LEHRER: Hey, what's going on here?

MR. GIGOT: Maybe some change is going to happen, and then they'll start listening to the arguments. And who can better last out for say eight hundred thousand or nine hundred thousand civil servants on furlough for a while, the Republican Congress, which really doesn't, you know, although thrilled by government anyway, or the President?

MR. LEHRER: What about that, Mark?

MR. SHIELDS: Well, Jim, I think that what Paul is overlooking in his, in his argument is this, that as of 1994, because of 1994, the Republicans became the party of government. Newt Gingrich is now the face of government. Last Tuesday, we saw for the first time a nationalizing of campaigns made by Democrats against Republicans, and instead of morphing, you know, using that process of taking a candidate's face and turning it into an unpopular national Democrat like George McGovern or Jimmy Carter or Bella Abzug or Bill Clinton, it was Newt Gingrich this time. And now the Republicans are the party of government, and I think that is the problem they face. They won big. People understood they were in charge, understood that this was their, their mandate, their move, and this is their plan. And I think that's the risk they run. They're not simply the critics, the outsiders, which they were for 40 years.

MR. GIGOT: And if they broke down internally in Congress, that point would hold water. But as long as they unite and put something on the President's desk, I think most Americans still know there's something called the President with a veto pen, and that he has to sign something for it to become law.

MR. LEHRER: Well, I got a hunch we're going to find out. We'll play that one out. Look, speaking of both President Clinton and Speaker Gingrich, Paul, beginning with you, how's the presidential race landscape look 48 hours after Colin Powell said no thanks?

MR. GIGOT: Well, on the Republican side, it looks an awful lot like Bob Dole and the seven or eight wannabes. Bob Dole's immediately stepped out to the role he had before, which was sort of the front-runner, the heir presumptive, and every fax that I got from one of the candidates this week all said the same thing, it's a two-man race; it's me and Bob Dole. They took a couple of real big shots at Bob Dole. So I think everybody's going to be aiming their big guns on Sen. Dole to try to get him back down so hopefully one of them can break through. That's sort of the way it plays on the Republican side.

MR. LEHRER: Yeah. What do you think, Mark?

MR. SHIELDS: Well, Jim--

MR. LEHRER: How do you see it?

MR. SHIELDS: Jim, with the exception of Sen. Dick Lugar of Indiana, everybody in the Republican field showed an absolute lack of class upon the departure of, or the non-entry of Colin Powell. They didn't even wait for the body to get cold before they started claiming that his not running was a great advantage to them. And, you know, they just--they missed the human touch here. I remember- -

MR. LEHRER: What could they have done? What could they have done?

MR. SHIELDS: Well, in1983, when Ted Kennedy--Thanksgiving of '83--decided he was not going to run for President in 1984 and shocked the political world because he was leading in all the polls at that point, every Democratic wannabe ran up to the Senate Press Gallery and said, boy, Kennedy's withdrawal is to my advantage because I worked with Kennedy on this, or I--this is a constituency and it's mine. Walter Mondale, the former Vice President, showed class and political shrewdness by simply saying, when asked, is this to your advantage, no, no, this isn't a question of advantage, this--Ted Kennedy went through a difficult decision; he has been a great leader of his party, this is his day, I don't want to speculate. Now, if one of them had showed the class and Dick Lugar kind of walked up to it, he didn't really go that far, it would have benefited him because then people would have said, hey, maybe this is a grown-up, but what Colin Powell showed on last Wednesday, Jim, was a patriot's decision and a nation's loss. I mean, this was a man who was a grown-up. And all the other guys started carping. The one guy who's benefited apparently--it has nothing to do with Colin Powell--is Pat Buchanan, who's now shot up according to New Hampshire numbers, up to within 10 points of Bob Dole.

MR. LEHRER: Paul, is Newt Gingrich going to run for the Republican nomination?

MR. GIGOT: I think the chances are small. I think that what--

MR. LEHRER: What's he doing there? Why did he have that news conference? He had the news conference within a hour after Powell- -

MR. GIGOT: I really don't know, except that, you know, Newt Gingrich has a little bit of the Bill Clinton problem, he just can't shut up sometime, but I--I think that he's going to give it a look, I think, if in the Florida straw poll coming up next weekend Bob Dole would be seriously weakened, I think then he'll think about it again. But if Dole emerges from that in decent shape, I think that he'll probably figure that it's not worth the, the agony of that whole process.

MR. LEHRER: How do you read the Gingrich thing, Mark?

MR. SHIELDS: Well, I think, I think Gingrich is being written off too quickly and too easily by too many political people. Yes, Newt Gingrich has a high unfavorable. Yes, and it's grown considerably this year, but the unfavorable is basically--he's a polarizing figure among Democrats. They don't like him. Jim, at this point, beyond this point, in March of 1980, Jimmy Carter led Ronald Reagan by 35 percentage points in every national poll. All right. Reagan was dead meat. He was gone. What's the point of nominating the guy? He couldn't win. He was a narrow ideologue. The reality was that Jimmy Carter then had an inflated set of numbers because he was commander in chief at the time of the Iran-Contra hearings, and people didn't know Ronald Reagan. But anybody who goes into that process--and Newt Gingrich has an emotional hold on Republican primary voters quite unlike anybody else in that race--if he would have won the nomination, that certifies and legitimizes anybody in the eyes of voters, then give him a second look. If he thinks I can beat Bill Clinton or Bill Clinton can be beaten in November of 1996, he ought to take a serious look at it and I think he's smart enough to ignore the fact that his unfavorables are basically Democratic voters.

MR. GIGOT: I think he's volunteering to be his campaign manager.

MR. LEHRER: Yeah. That's a great pitch. What do you think of Mark's earlier analysis of what happened on Tuesday in these, in these elections that the Democrats--I'm paraphrasing you, Mark-- but the Democrats successfully nationalized it and made Gingrich and Dole the, the enemy, at least particularly in Kentucky and some other places.

MR. GIGOT: I don't think that the Democrats should be singing "Happy Days Are Here Again." I mean, Kirk Fordyce won a second term in Mississippi.

MR. LEHRER: Mississippi.

MR. GIGOT: He's kind of Newt Gingrich--

MR. LEHRER: Against a strong Democrat.

MR. GIGOT: A strong Democrat. He's kind of Newt Gingrich on steroids, you know, so that--

MR. LEHRER: I'm not going to even--

MR. GIGOT: But I think that Mark is right, that it's a warning shot. Nonetheless, the results were kind of a draw, but if you look at underneath, some of the trends, the realignment in the South didn't advance, stopped, and Democrats were successful, I think, in using Medicare and sort of a "just say no" strategy, just stop the Republicans, whatever they're doing, just stop 'em, to, to raise a lot of anxiety and fear among people, and, you know, the Republicans are going to have to find a way to counter that argument.

MR. LEHRER: Do you think that President Clinton clearly may-- well, I'm asking you, did President Clinton probably read those results the same way and may, may have firmed him up in terms of what he's doing on this budget thing we were talking about.

MR. GIGOT: I think that is probably one of the factors, there's no question about it.

MR. LEHRER: Do you agree with that, Mark?

MR. SHIELDS: I do, Jim, and I think that the President faces, because of the recent statements about the tax increase and other things and I think he has to--he has a political imperative--he has to veto whatever comes to his desk It becomes a political imperative for him to do it to prove that he is a strong leader, that he's not going to be somebody who's going to be coopted. He has to demonstrate that by vetoing whatever comes down from the Hill.

MR. LEHRER: Quickly, Mark. We've got a few seconds left. Hazel O'Leary is still Secretary of Energy. Do you think that's a temporary state?

MR. SHIELDS: I would say this, Jim. If it had been Ed Meese as attorney general who had spent forty-six or forty-five thousand dollars of hard-pressed taxpayers' money to find out what the press was writing about him, I just wonder what the demand and the hue and the cry would be for his resignation. I mean, this is a time we're talking about making 1.1 million more children into poverty because of budget cuts and budget shortage and tax cuts and the fact that we don't have enough federal money to spend, and you don't spend $45,000 to monitor the press.

MR. LEHRER: Paul.

MR. GIGOT: That study that he's talking about with the 1.1 million children is contended, disagreed by some--

MR. LEHRER: But the other issue.

MR. GIGOT: Hazel O'Leary, you know, I mean, I think that Mark probably scored better on the rating of journalists than I did, at least before today, but, no, she ought to sit with a dunce cap in the corner. I don't think this is a hanging offense, but it certainly doesn't make the argument to help preserve the Energy Department when you can spend $43,000 to look into what journalists are writing about you. And I think that undermines their whole case that said this is a valuable department. The timing was awful.

MR. LEHRER: Our timing is over. Thank you both very much. FOCUS - NIGERIAN EXECUTION

MR. LEHRER: Now, the execution of a human rights activist in Nigeria that has been denounced in the United States and around the world. Charlayne Hunter-Gault has the story.

MS. HUNTER-GAULT: Nigeria, among the largest and potentially wealthiest nations in Africa, has been under military rule for much of its history. Today, the current military government announced it has executed Ken Saro-Wiwa and eight of his associates. Saro- Wiwa was a Nobel Prize nominee and writer. We start with a background report from James Mates of Independent Television News.

JAMES MATES, ITN: Ken Saro-Wiwa, writer, human rights activist, campaigner on behalf of his fellow tribesmen, hanged this morning in a Nigerian prison. His alleged crime, the murder of four men, charges he adamantly denied.

KEN SARO-WIWA: There is no possibility that I or Mossob could ever have planned any such action.

JAMES MATES: He was an inspirational leader to members of Nigeria's Ogoni tribe, whose ancient tribal lands have the misfortune to contain Nigeria's most productive oil fields. It became Ken Saro-Wiwa's life's work to stop the environmental damage being done by the oil industry, and it's for this he claimed he was framed by the country's military dictators. Nigeria's foreign minister, in New Zealand for the Commonwealth Conference, has refused to back down in the face of worldwide condemnation of his government.

CHIEF TOM IKIMI, Foreign Minister, Nigeria: That is a trial for the murder of four people and it is not a trial for civil rights or a trial for environmental degradation. I thank you.

JAMES MATES: Many commonwealth heads of government will have been deeply shocked these executions were carried out during their conference, almost mocking their appeals for clemency.

NELSON MANDELA, President, South Africa: In view of this latest development, the South African delegation at the commonwealth conference will recommend the expulsion of Nigeria from the commonwealth, pending the installation of a democratic government.

JOHN MAJOR, Prime Minister, Great Britain: I said yesterday that I thought this was a fraudulent trial, a bad verdict, an unjust sentence, and it has now been followed by judicial murder.

MS. HUNTER-GAULT: Nigeria's fellow members of the British Commonwealth were not the only nations to react strongly to the executions. The United States late today recalled its ambassador to Nigeria and halted military sales. This afternoon, the United Nations Security Council debated the issue.

MADELEINE ALBRIGHT, UN Ambassador: Their conviction was stunning in its absence of any modicum of the due process under law. The unseemly haste of this reported step contravenes all values of the civilized world. The defendants were not given a fair and free trial, were not able to present witnesses or evidence.

BENNO ANTONIUS EITEL, UN Ambassador, Germany: The government has worked for the worldwide abolition of the death penalty. We shall continue to do so. If the shocking news I have just mentioned should prove to be correct, my delegation cannot but join those delegations that have before me expressed their utter dismay over these executions.

JOHN WESTON, UN Ambassador, Great Britain: The British government has stated in London that the British government is appalled at this callous act. The British prime minister is in close contact with his colleagues at Aukland about further steps. Thank you, Mr. President.

ISAAC AYEWAH, Deputy UN Ambassador, Nigeria: The Nigerian delegation wishes to remind those delegations which have ascribed to themselves the rule of the world's policemen to kindly note that what has reportedly taken place in Nigeria today in relation to the subject of their comment bears no relevance to the item under consideration inthe council. The Nigerian delegation, therefore, finds it unacceptable for those members to want to meddle in the domestic affairs of Nigeria. We regard it as a gross interference in our internal affairs. I thank you.

MS. HUNTER-GAULT: For more now, we go to Jean Herskovits, a professor of African history at the state university of New York in Purchase. She has followed Nigerian politics for the past 30 years and was there most recently this summer. Prof. Herskovits, you knew Ken Saro-Wiwa. Tell us just a little bit about him and the nature of his activism.

JEAN HERSKOVITS, Africa Analyst: [New York] I haven't--I haven't actually seen him for some years. I knew him in an earlier carnation, as it were, when he was involved in the teaching of literature and the writing of plays and the writing of newspaper columns which always satirized and criticized virtually every Nigerian government, and so it's in that context that I had seen him personally in earlier years. More recently, he's become much more of a political activist, of course, on behalf of what he called the Ogoni nation. And his concerns were environmental but they were also--they were also political in the sense of setting forth plans to--if necessary--even declare the Ogoni a separate nation from Nigeria.

MS. HUNTER-GAULT: All right. Tell us just briefly about the Ogoni and how Saro-Wiwa's activism fits into the charges that brought him to this situation today, the execution.

PROF. HERSKOVITS: Well, the, the oil-producing areas of Nigeria are largely, though not exclusively, in the Niger Delta, and the Ogoni are one of the ethnic groups who live there. They number-- I've seen estimates that go up to about 100,000 people in a country, as you know, of 100 million. So we're not talking about one of the largest ethnic groups. But they, along with others in the rivers, have felt the ecological consequences and mostly those of course have been negative of the oil industry that has been the major source of Nigeria's revenues over the years. Ken Saro-Wiwa and his--the organization he put together, starting as I believe about 1990, was protesting against that--the degradation of the environment, but this is, I think it's only fair to say, something that Nigerian governments since the early '80s had also turned their attention to, so he was drawing particularly vivid attention to problems that needed it but that were not going unaddressed by a number of others specially in the riverine areas.

MS. HUNTER-GAULT: Now, the charges against him related to the killing of four moderate Ogoni chiefs who were opposed to this kind of demonstrating, is that right?

PROF. HERSKOVITS: Yes. As I understand it, and of course I am not privy to any special details of, of the case, but as I understood it as long as eighteen or more, eighteen months, two years ago, there came to be some divisions among the Ogoni about how best to approach these issues, and whether to take a militant and confrontational stance, which included some sabotaging of oil installations and threats of more. So there was a political division then within the Ogoni, I understand, and it's in that connection that demonstrations, counter-demonstrations, violence, and, indeed, army interference in an attempt, it was said, to keep the peace, all took place, and it was as a consequence of some of that confrontational difficulty that the murders of these four other Ogoni took place.

MS. HUNTER-GAULT: And, of course, Ken Saro-Wiwa was not present, not at the scene of the murders, but he was charged with inciting them, is that not right?

PROF. HERSKOVITS: That's how I understand it, yes.

MS. HUNTER-GAULT: Now, foreign governments, human rights groups, you just heard the taped piece, have said that this was not a free and fair trial, that they weren't able to present evidence and witnesses. Is there anything that you know about this trial, it was in secret, it was done by the military, is there any light you can shed on that briefly?

PROF. HERSKOVITS: I'm afraid not very much, because I'm not a lawyer, and of course, I wasn't in the country, but in all military governments, in most places, you have different kinds of judicial procedures than you do in obviously in a democracy. Nigeria has had in the past a strong judiciary, but there have been some other tribunals set up to deal over successive governments with particular kinds of difficulties and offenses, allegations of offenses.

MS. HUNTER-GAULT: Well, just a few--

PROF. HERSKOVITS: And this was one of those, I believe.

MS. HUNTER-GAULT: Just a few months ago, there were over 30 Nigerians, including Gen. Obosojo, sentenced to death for allegedly plotting coups against the government, and international appeals of clemency from this country, from President Mandela, and others resulted in the government commuting the sentences. Why was this case different, do you think, that they didn't listen to the same appeals from the same people, including the Pope as well?

PROF. HERSKOVITS: Yes. I think as best as I can understand it, there is a differentiation in the minds of those running Nigeria's affairs now between the two kinds of offenses. In the case of the coup attempt, this was, of course, much debated. Within the army there were certainly pressures to carry out the sentences as originally handed down. But those were seen as in some sense political offenses, and as a consequence, I think there was more receptivity to pressure than what in this case is seen as a succession of criminal offenses, which range all the way from the sabotage efforts that I mentioned before to these killings. And so in the view of the government I believe they saw a distinction and believed that in criminal cases they could not listen to these kinds of appeals, or at least would not.

MS. HUNTER-GAULT: You know, in general, Nigeria has been criticized because the government has not moved towards establishing democratic elections and there have been accusations of human rights abuses that the government was and the country was increasingly corrupt, and today the "Christian Science Monitor," yesterday said that they were moving closer to mass violence and political disintegration. What do you think the impact of this trial--this execution is going to be, just very briefly, on the general state of things, and can any of these nations, including the U.S., Mandela, do anything about it?

PROF. HERSKOVITS: Well, in the first instance, I don't know the basis on which one would draw the conclusion that there was political disintegration in the works, compared to a much more disordered time, even as recently as a year and a half ago. I think it's my sense and on my recent trip it was my impression that there were many, many serious problems, but political disintegration, it wasn't one of them. There is a transition program that's been put in place, and although it is three years of duration which many outside and inside the country regard as too long, nonetheless, there's a program in which there are a lot of people starting to organize political parties and so on to participate in the process.

MS. HUNTER-GAULT: All right.Well, we're just going to have to see what happens as this story unfolds. Thank you very much, Prof. Herskovits, for being with us.

PROF. HERSKOVITS: My pleasure. FINALLY - MEGABOOKS

MR. LEHRER: Finally tonight, the multi-million dollar book club. Elizabeth Farnsworth has that story.

MS. FARNSWORTH: Yesterday, Marcia Clark, the lead prosecutor in the O.J. Simpson murder trial, joined the exclusive club when she signed a reported $4.2 million book contract to tell her story. Who gets the big bucks and why? Earlier today, I put that question and others to Maureen O'Brien, who covers big book deals for "Publishers Weekly." Thank you for being with us, Ms. O'Brien. Why did Marcia Clark get such a huge deal, such a lucrative deal?

MAUREEN O'BRIEN, Publishers Weekly: Well, I think it's all about the news. I think it's all about the enormous interest that has been around this trial of the century from beginning to end, and I think that there's an awful lot of people out there who are interested in hearing her story and what she has to say.

MS. FARNSWORTH: And is there something about, about Marcia Clark, herself, that made this especially big? I mean, Christopher Darden got $1.3 million or something like that, her co-counsel.

MS. O'BRIEN: Exactly. Exactly. Well, she was, you know, the pseudo-leader of the prosecution team, so from that point of view, I think that that's unique, but I think more so in terms of her value to the book business, the majority of book buyers in this country really are women, and I think that there's an awful lot of women out there who are somewhat angry or at least interested to learn more about what she feels about what went right and what went wrong with this case. It's a real woman's story I think here.

MS. FARNSWORTH: The trial has generated quite a few books. How many now have come out of the trial?

MS. O'BRIEN: It's just astounding. We've never seen anything quite like this in the industry. To date, there are more than 36 books already in bookstores that have sprung out of this trial. Some are serious; some are spoofs. There are at least--at this point--at least fifteen, maybe twenty, possibly more on the way.

MS. FARNSWORTH: Now, it's not just the trial that's generating very large advances. Newt Gingrich was offered but ended up turning down more than $4 million. Colin Powell got more than $6 million. What's going on here? Is this a new phenomenon?

MS. O'BRIEN: No. It's not really new, but it's getting an awful lot of more attention. I think the book business in general as an industry is, is being covered more widely in the media. There have always been multi-million dollar deals done in the book business, but I think, I think you're correct in your assumption that there are more coming, and they're getting a lot more attention.

MS. FARNSWORTH: How do you explain the success of Colin Powell's book?

MS. O'BRIEN: Well, that was just one of the most shrewdest marketing campaigns we've ever seen in the industry. It was well orchestrated. It took two years of planning, and, you know, basically, I think the success of it was that he stayed absolutely quiet up until the day that book was published. He wouldn't talk to a reporter about anything, and then, of course, he launched a, you know, the buzz that he was possibly running for President. It was a brilliant way to sell a book.

MS. FARNSWORTH: You think that was a way to sell a book?

MS. O'BRIEN: Yeah. I think most definitely. I think that this was No. 1, a way to sell the book, and No. 2, a way for him to test the waters as towhether or not he would run for President. But it was to sell the book, I'm sure.

MS. FARNSWORTH: Besides big political figures and somebody that's been involved in the O.J. Simpson trial, what other kinds of people are getting these big advances?

MS. O'BRIEN: Well, the Pope, himself, received quite a large advance, over $6 million. Marlin Brando received over $5 million. Anyone with world recognized names, any, any very high name recognition value author is going to be able to command a multi- million dollar book advance.

MS. FARNSWORTH: And what, what effect does it have on the publishing industry? Are these books, for example--Colin Powell's book is selling enough to pay for the advance and also make money for the publishing company?

MS. O'BRIEN: I think so. I think that it's always a gamble. You never quite know. Marlin Brando's book, which was also published by Colin Powell's publisher, Random House, really performed quite poorly, and I believe they lost a bundle on that book, but overall, these, these big multi-million dollar celebrity book deals do more than just make money for the publisher. They draw a lot of people into bookstores who might not otherwise go into a store, and as a result, they sell an awful lot of books by--that normally wouldn't be seen by people.

MS. FARNSWORTH: Do you think they're overall good for the publishing business?

MS. O'BRIEN: Yeah. I think it is. I think it's--the book business, let's face it, is an industry, it's an entertainment industry, and it's a business, and this whole phenomenon is drawing a lot of attention to it. And it's--you know--it's showing the world that the book business can compete with the rest of the media.

MS. FARNSWORTH: Do they help pay for books that might not sell so many copies?

MS. O'BRIEN: Absolutely. That's one of the things that goes very much under reported, these large super glitzy, super high profile, newsy books, even, we're talking like Rush Limbaughs and Howard Sterns, when they--when they're successful, when they really bring in millions of dollars for a publishing company, that money helps to underwrite the publication of dozens and dozens of more literary works, you know, your short story collections, your first novelists, the books that really are a high risk for a publisher to go ahead and bring out. These big blockbuster books really are worth it, because when they succeed, they help to kind of pay for the--pave the way for other, more quality literary works to be published.

MS. FARNSWORTH: Well, Ms. O'Brien, thanks for being with us.

MS. O'BRIEN: Thank you. RECAP

MR. LEHRER: Again, the major stories of this Friday, the House completed work on the debt limit bill and sent it to the President, who's expected to veto it. Action on a stop gap spending bill was delayed until Monday. The President said he will veto that bill too. If he does, the federal government may shut down Monday at midnight. And a Nigerian writer was executed, along with eight other dissidents, despite pleas for his freedom from around the world. The U.S. recalled its ambassador in protest. We'll see you on Monday night. Have a nice weekend. I'm Jim Lehrer. Thank you and good night.