The MacNeil/Lehrer NewsHour

INTRO

JIM LEHRER: Good evening. Danger and death to the men of the U.S. military was again the top news of the day. Two companies of U.S. Marines invaded a small island near Grenada in a vain but bloodless search for more Cubans while six U.S. Navy men died in a fire aboard an aircraft carrier near the Persian Gulf, and Marine Commandant Paul Kelley had a second day of hard questions about Marine security in Beirut. We'll have the details on these stories as well as some closing thoughts tonight from essayist Roger Rosenblatt on how emotionally and intellectually confusing these last 10 days have been for many Americans. Robin?

ROBERT MacNEIL: Also tonight we look into several simmering controversies: is William Clark the man to be interior secretary; is deregulation depriving small towns of intercity bus service; is the Reagan administration changing what Congress intended in block grants to help the urban poor? And we look at the news that is shaking the home computer world -- the arrival of IBM.Grenada

LEHRER: There was another U.S. invasion today, but nothing like the one last Tuesday. This time it was only 300 U.S. Marines who went ashore by helicopter and from amphibious landing craft. They stormed the tiny island of Carriacou some 20 miles north of Grenada. The Pentagon said the Marines were sent there to follow up a report that Cubans were on the island, but none were found, only 17 members of the Grenadian army, who were captured without a fight. Friendly civilians then led the Marines to an arms warehouse which contained 700 rifles, 38 AK-47 automatic rifles, 150 cases of ammunition, 12 cases of TNT, some radio equipment, two jeeps and a truck. A White House spokesman said President Reagan approved of the new action because it was considered part of the on-going Grenada operation. "No new authorization was needed," said this spokesman. There was no new reported military action on Grenada itself. U.S. officers there said troops continue to comb the island for resisters and arms supplies.

Here in Washington officials confirmed that 18 U.S. troops had been killed in the action, with 86 wounded and one still missing. Also, the House today voted a 60-day War Powers limit on the use of the U.S. troops in Grenada. The vote was an overwhelming 403 to 23 in favor. The Senate passed a similar measure on Friday, but for technical reasons it must vote on it again before it goes to President Reagan. The Republican leadership went to President Reagan today, as they do most weeks, for consultation. Afterward they had this to say about Grenada.

Sen. HOWARD BAKER, (R) Tennessee, Majority Leader: The Congress, in my view, supports -- overwhelmingly supports what the President and the administration have done, and the more news that comes out of Grenada the more support develops. So I think that the President will continue to plan to bring those troops out as soon as possible, and I think the Congress will continue to support him. And I think it will emerge that there was a clear pattern of determination by the Cubans as the surrogates, no doubt, for the Soviet Union to use that as -- that island as a staging area for military adventure in other parts of the Caribbean and in this hemisphere. I think that information is going to be so overwhelming that before we finally settle this story intothe history books that there will be the broadest possible support for the President's initiative in doing what he has done in Grenada.

REPORTER: Could you be more specific on that? We've been hearing --

Rep. ROBERT MICHEL, (D) Illinois, House Minority Leader: It all felt a lot different in that room this morning, I'll tell you, if there had been the number of hostages taken by way of students and then trying to find out how do we extricate them.And that didn't happen and so, when the operation's a success, there are all these Monday-morning quarterbacks who think it could have been done some other way, and the minute we would have failed to do what we had to do at the time, there have been all kinds of criticism. That's why we elect a president once in awhile to make a tough decision; that's why some of us're in leadership roles to support that decision when you feel the necessity of it.

MacNEIL: There were more U.S. service casualties today in another part of the world. Six Navy men were killed and 37 injured in a fire aboard the aircraft carrier Ranger in the Arabian Sea. The fire broke out in one of four engine rooms, but the Navy was unable to say what caused it. The injured men were said to be suffering mostly from smoke inhalation and minor burns, and will be treated on board. The fire did not disable the carrier.

The safety of U.S. Marines in Beirut was a major issue in Washington again today. For the second day, Marine Commandant General Paul Kelley was questioned on Capitol Hill about security arrangements that permitted the terrorist bombing at Beirut airport nine days ago. Today, before the House Armed Services Committee, General Kelley again said no security could totally guard against such kamikaze attacks. Despite this situation, he told the committee the Marines should continue in their current role.

Gen. PAUL X. KELLEY, USMC Commandant: What the multinational force has accomplished -- and, please believe me, it has accomplished a lot in the last year. It has helped to build the Lebanese armed forces to something that now at least has a modicum of credibility; it has created an atmosphere conducive to building those forces. And to turn it around another way, in my judgment, if the multinational forces -- the Americans, the French, the Italians and the British -- were to withdraw from Lebanon today, the Lebanese armed forces -- in my professional opinion as a military officer, the Lebanese armed forces would unravel. And once unravelled, the logical conclusion by most is that the government of Lebanon would collapse.

MacNEIL: In Beirut today, Druse and Lebanese army gunners shelled each other's mountain positions for a second day. The artillery explosions could be heard in the Marine base where FBI demolition experts examined the site of the bombing that killed 230 Americans.

In the mountains above Beirut, a group of Christians was evacuated from their village, which was surrounded by Druse militiamen. Here's a report from Christopher Morris of the BBC.

CHRISTOPHER MORRIS, BBC [voice-over]: Today the first of the trapped townspeople were rescued from Deir el Qamar, but strict conditions were imposed by the Druse fighters; only those over 70 years of age and children under 15 to be reunited with their parents could go. The rescue mission had been organized by the international Red Cross after Walid Jumblatt, the Druse leader, agreed that 1,000 people could be evacuated. Mr. Jumblatt is in Geneva for the national reconciliation conference, and he gave special permission for the refugees to leave on humanitarian grounds.

For these proud mountain people it was a tearful, emotional moment. They were saying good bye to their families and friends not knowing when they would see them again. The first stage of their journey to Beirut in safety was the short bus ride across no-man's land to the Druse side. Here, each of the refugees wore a pink identification card, and only after the documents had been checked and meticulous searches carried out were they allowed to board the waiting coaches escorted by Red Cross workers. Many were frail and ill.For them it was a harrowing, humiliating experience. Even young children had to undergo the ordeal, and one of them, a boy of 15 suspected of being a Christian soldier, was taken away for questioning and then refused permission to travel onwards. Eventually he was sent back in tears to the town he'd hoped to leave while the first batch of 200 refugees set off on their journey to freedom, and to an uncertain future.

MacNEIL: In Geneva, Lebanese factional leaders, including Druse and Christians held the first working session of the so-called reconciliation conference to end the civil war. Jim?

LEHRER: The Postal Service wants to eliminate the 20" stamp and replace it with a 23" stamp. A postal official has announced today a formal request has been made for a 3" hike in the cost of mailing a first-class letter. The cost of a 13" postcard would also go up, to 15". The official said at a Washington news conference that rising costs have forced the actions, which would not go into effect until next October, and only then if an independent postal rate commission approves. The case for the price increases goes like this.

ROBERT HARDESTY, Chairman, Board of Governors, U.S. Postal Service: While the prices have gone up nearly 25% since the last general rate filing, we are seeking only a 15% increase in the basic letter rate. We are able to bridge this cost gap because of annual productivity increases averaging 3.5% since 1980. In the interest of our customers we have delayed authorizing a filing as long as we prudently can. Management initiated discussions with the board for a general rate increase nearly a year ago, but because our financial performance has remained strong, the board has been able to defer a rate filing until now. Obviously, we wish we did not have raise at all, but 3 1/2 years of rising costs have finally caught up with us, and we are now operating at a deficit.

LEHRER: And, speaking of financial problems, the biggest of all remains unresolved tonight. That's the one over the federal debt limit. Some time today -- the exact moment was not recorded -- the government reached the magic point of owing $1.389 trillion, the debt limit set by current law. Yesterday, knowing it was coming, the White House and the congressional leadership sought to have the limit raised, as Congress has done almost routinely 75 previous times. But conservative Republicans and some Democrats got together and rebelled, and the bill failed to pass the Senate. There is no immediate crisis because the government has enough cash on hand to cover its bills. But there could be a problem in the next several days, although most observers feel Congress will pass the bill to avert it, once members feel their point about federal deficits is made. Stay tuned. Robin? Home Computers

MacNEIL: There was big news in the business world today, at least that part of it excited about home computers. For months computer buffs and the industry have been waiting for the computer giant, IBM, to enter the home computer market, a market created and dominated so far by small entrepreneurs. IBM wouldn't even admit that it was working on a home computer. Its silence caused massive speculation and helped to generate millions of dollars' worth of free publicity. The speculation even created a nickname for IBM's home computers. Someone called it the Peanut, and the name stuck, except at IBM.

[voice-over] Today the suspense finally ended, and IBM unveiled its home computer, which it calls the PC Junior, to a press audience. The Junior is an adjunct to IBM's personal computer, an office machine which will sell more than 800,000 models this year, and which has dominated its market. Will Junior do the same?

MARC SCHULMAN, computer industry analyst: The PC Junior is, I think, riding on the coattails of the PC as opposed to really breaking new ground. I believe that a significant element of IBM's thinking in announcing this product is that professional people, managerial people, may have a standard PC at the office, and the idea of the PC Junior would be to have a less expensive machine that would be at home that could run the same software that the PC itself runs on. It is in this sense that I think the PC Junior expands the overall personal and home computer market more than it does take business away from other home computer vendors.

MacNEIL [voice-over]: Even before IBM introduced the Junior its effect was rippling through the home market. Other companies which had created the home market suddenly fell victim to price cutting competition. Late last week, Texas Instruments announced it was getting out of the home market. Today Texas Instruments machines were being sold at distress sale prices, and there were a lot of buyers. Other companies like Commodore, Coleco and Tandy are still very much in the market but now face a mammoth competitor in IBM.

Mr. SCHULMAN: I believe that we would be seeing a shakeout occurring even if IBM were not so successful. IBM's success has accelerated the process. I believe that this shakeout plays right into the hands of IBM because what it says to a user of these small computers is that he had better be certain that the vendor he's buying from is still going to be supporting the product that he's buying a year from now or two years from now.

MacNEIL [voice-over]: With the Junior, IBM is following the same strategy that has made its personal computer so successful -- start late and then overwhelm the market. Now that it has shaken off a series of antitrust challenges, it can be even more aggressive. IBM has become a colossus by selling office equipment, and its customers are big corporations. But the Junior is IBM's statement that the future market for computers will be in the home, not just the office.

Mr. SCHULMAN: We believe that by the end of this decade IBM and AT&T will emerge as each other's principal competitors, and in order for IBM to sustain better than a 15% growth rate, which is its corporate objective, we believe that IBM will have to generate substantial revenues in the home. It might do that by announcing a still lower cost product, perhaps in the $300 to $400 range, that it would sell in the tens of millions.

MacNEIL: There was also important business news in the newspaper industry. The Chicago Sun-Times, the nation's seventh largest daily, was sold to Australian publisher Rupert Murdoch. The price was $90 million in cash, and included the Field Newspaper Syndicate, downtown real estate and other holdings. Murdoch said he did not plan to change the character of the Sun-Times. Murdoch's other newspapers include the New York Post, the Boston-Herald and the San Antonio Express and News. He also publishes New York magazine, The Village Voice, and The Weekly Star. His overseas holdings include The Times of London. We'll be back in a moment.

[Video postcard -- Virgin, Utah]

MacNEIL: Late this afternoon the House of Representatives took the final action needed for its approval to build the MX nuclear missile, a weapon capable of carrying 10 warheads. By a vote of 217 to 208 the House rejected an amendment to strike out a $2-billion appropriation to build the first 21 missiles. The Senate is expected also to approve the weapon. Jim? Bus Deregulation

LEHRER: Greyhound buses are still operating tonight on the nation's highways, last night's strike deadline by union employees having been pushed back to Wednesday while negotiations continued in Scottsdale, Arizona. End of traditional, no-glamour news item, but it's not the end of the story, a story that will not receive much attention because it is about buses, considered the no-glamour, last-resort way to go by most, except the poor, the young and the elderly, who have no choice. One year ago this month, few noticed as the inter-city bus industry went the way of the airlines into deregulation, meaning most federal rules on routes and rates were eliminated or eased. The result has been a year of shuffle and turmoil, and Washington got an earful about it today. A Senate subcommittee held oversight hearings on bus deregulation 12 months later, and two principal concerns emerge: loss of bus service to many small towns around the country, and a potential loss of safety with hundreds of new small companies entering the business. Here's how it went.

Sen. JOHN DANFORTH, (R) Missouri: Tell us about safety fitness. Do you think that we have adequate standards and procedures?

REESE TAYLOR, Chairman, Interstate Commerce Commission: We have been concerned enough to conduct some road checks. I recall one specifically that we did out of [unintelligible] not so long ago, and we found one bus with absolutely no brakes. This is coming back from Los Vegas to Los Angeles -- has to go down that San Bernardino grade. We found another one that only had one lug nut on one of the wheels. Mr. Gaillard, who is sitting next to me, has been involved in many other studies. We recently had a two-bus accident coming down the grade from Reno back to California where the driver was at fault and may be seriously prosecuted. So there is still a considerable safety problem, in my view, and I think one that has to be addressed, and therefore I would certainly commend your efforts to get meaningful safety legislation passed. I certainly hope that comes. I don't believe we should have to wait until a bunch of bus passengers are incinerated at some country crossroads before we really give it the attention that it deserves.

Sen. LARRY PRESSLER, (R) South Dakota: One year is not long enough to give us a clear picture of the long-term effects of bus deregulation. At least I hope it is not enough time, because the preliminary results paint a very bleak picture.Of the 14,000 communities whose transportation needs are served exclusively by intercity bus routes, about 10% have had service abandonments or are presently facing proposed discontinuation of services. Ten percent! And keep in mind that they have no alternative services. Where are these communities supposed to turn for alternative transportation? As a rural state senator from South Dakota who has witnessed dozens of railroad and airline abandonment cases in my home state since deregulation of those transporation services, I can assure everyone here today that there is nowhere else to turn. Rural America is continually and systematically being left out in the cold in the push for transporation deregulation.

Mr. TAYLOR: We're going to make every possible conceivable effort we can to see that where service is essential that substitute arrangements can be made. And it's going to take awhile. It isn't going to happen overnight. As I said before, there'll be some rough edges that are going to require some sandpapering as we move through the transition.

Sen. DANFORTH: What does happen if service is discontinued? Do you know?

VICTOR WEISSER, California Public Utilities Commissioner: Well, I think that those people can call on neighbors to carry them to the nearest community will do so. I think that some discretionary trips are eliminated. In certain cases, disasters occur. We received a letter from one lady who was receiving treatment for cancer in San Francisco.Due to a service adjustment -- not an abandonment, but a timetable change -- she was unable or would have been unable to make that type of treatment. This is one horror story, and there are dozens of these that we're getting. Fortunate for this lady, a service adjustment -- a further adjustment was made, and she was able to make that trip. We think discretionary trips are being lost. We're not seeing the replacement services come into effect, Mr. Danforth, that had been discussed in the debate prior to passage of the act in California, at least.

LEHRER: We look further at the question of lost bus service to small-town America with a report from the state of Oregon, which lost six Greyhound routes just this last weekend. Kwame Holman is the reporter.

KWAME HOLMAN [voice-over]: Since 1914 intercity buses have zigzagged the nation's highway system making more stops and serving more people than trains and planes combined. And along America's backroads, the bus often has been the only mode of transporation for small-town residents. Western Oregon is timber country, where the roads wind through scenic woodlands and cities are few and far between. Small towns like Newport dot the Oregon coast and for decades people here have counted on Greyhound bus service to take them to the hospitals and schools in the inland population centers like Corvallis and Salem.

DRIVER: Corvallis, Salem, Portland.

HOLMAN [voice-over]: But as of last Sunday the Newport to Corvallis run is no longer part of Greyhound's or any other carrier's schedule. Following deregulation of their industry, Greyhound and other bus companies ended service to hundreds of small communities nationwide, deciding to concentrate on their most lucrative routes. In Oregon, that means six runs have come to an end, cutting off much of the state's western edge from any nearby public transportation to the inland valley. For Dennis Dick, Greyhound's depot manager in Newport, the cutbacks mean he will lose almost half of his freight business, but he is more concerned about the human impact.

DENNIS DICK, Greyhound depot manager: The losers is the public, those people who depend on Greyhound. You know, they're college students and the elderly primarily; they use this route to get to the Valley and back. The distance between here and Corvallis is about 45 miles. If they wish to travel by bus, and many ofthem have no alternative, they'll have to take the 100-mile-north trip and them come back 100 miles south, so it -- in essence it'd be a 200-mile trip to cover 45 miles.

DRIVER [to passenger]: You change busses in Corvallis.

PASSENGER: Is there a long wait, do you know?

DRIVER: You have about 30 minutes, a little less. Can you manage that?

PASSENGER: Oh, yeah. That'll be fine.

HOLMAN [voice-over]: And for Mildred Corwin it means fewer visits to her eye doctor and family in the Valley. She has been taking this route since 1972 and today she rode the bus from Newport to Corvallis for the last time.

MILDRED CORWIN, bus user: Perhaps there is not a large amount of profit on this line, but we are a county of retirees, and the Greyhound bus line is very important to those that are retired. So many are not physically strong, able to drive or financially able to own a car.

HOLMAN [voice-over]: College professor Bill Williams was one of six passengers on this bus. He's been riding the route for 15 years.

Prof. BILL WILLIAMS, bus user: They have a right to make a profit, but they also have an obligation to serve the public within the terms of the basic concept of public service. They should be forced to provide a regular service into these kind of areas. I'm not willing to say it has to be every day, but yes, they have a public service responsibility.

GENE MARSHALL, bus driver: In 1954, I think, my first time over this route, those years, why, our load was, oh, a half a bus or more, three-quarters of a bus load. I mean, I'm talking 20, 25 people at times. And it has been a good service, and they needed it. I don't think it's fair for the company to have to provide service when the people are not using it, but on the other hand, I think we are a service company, so there is an obligation to a point of some of these people -- they need transportation.When you go through Blodgett or Eddyville or some of these places that these people have only one way to go, and that's by bus.

Ms. CORWIN: Well, when I wish to go into the Valley to visit my family and help care for my grandchildren I do not see any way that I can reach the Valley. That's something in the future that one will have to work out if this bus discontinues.

HOLMAN [voice-over]: Bus service here was discontinued, but not before a fight between Greyhound and Oregon's Public Utilities Commissioner John Lobdell.

JOHN LOBDELL, Public Utilities Commissioner, State of Oregon: It's clear that at least the Greyhound Corporation wants to restrict their activities to the high volume, high revenue, high profit routes, which is up and down the freeways between major metropolitan centers. That then leaves the problems in the states of providing service from the larger metropolitan areas to the small communities and between the small communities. The gut issue is that, since we are granting them a specialized license to operate a specialized service, should we as states be entitled to expect them to provide a subsidy to some rural communities from their high traffic, high profit routes?

HOLMAN: Do you think Greyhound cares at all for these people that are out there stranded?

Mr. LOBDELL: No, not at all. I think that they're just numbers on a P&L statement to Greyhound.

HOLMAN [voice-over]: The specific arguments over the effect of bus deregulation vary from state to state, but here the reality is that a company that has played a major role in moving small-town America is about to leave many of those towns behind.

LEHRER: Greyhound, even with deregulation, remains the dominant force in the bus industry with its 3,800 buses which carried 57 million passengers last year alone. Trailways, its major competitor, has half of Greyhound's revenues. The Oregon towns are among 1,100 stops Greyhound is eliminating nationwide. The states most affected are Indiana, Texas, California, Georgia and Alabama. It is also starting service on 38 new routes.The company's senior vice president is William McCracken. First, Mr. McCracken, the Oregon commissioner says that Greyhound doesn't care about these people as individuals.

WILLIAM McCRACKEN: Well, I would disagree with that. We care about any passenger. Passengers are revenue. The route that was discussed here, they said there were six passengers on the bus. That was much above average. Studies we did indicated less than an average of four people a day riding that schedule. That barely pays for the tags and the taxes.

LEHRER: Well, what are the economics of that? Explain that.

Mr. McCRACKEN: The revenue on that run would have probably averaged out 30" per each mile. The cost of operating it was $2.30 a mile. So we were losing $2 every mile we operated.

LEHRER: And is that the case in most of the route abandonments that you have filed for or are working on at this moment?

Mr. McCRACKEN: I would say this one, where you had an average load of four, is much better than the typical route that we're abandoning. The typical route we're abandoning -- there was testimony today at the hearing on Iowa. We averaged half a passenger a day on those routes. Half a passenger a day.

LEHRER: All right. What about the gut issue, as the man in Oregon said, is that Greyhound, regardless of whether or not it's losing money on these routes, Greyhound or any other bus company, for that matter, that you have a public service obligation to provide that service?

Mr. McCRACKEN: When we were a regulated industry, obviously the profitable routes could subsidize the unprofitable. We're a deregulated industry now. The so-called profitable routes are subject to intensive competition from new bus companies and existing companies expanding their networks. We don't have the protection anymore that regulation used to provide us to develop the funds from the profitable route to subsidize the unprofitable.

LEHRER: So the man was right, then, when he said that Greyhound, and presumably Trailways and the other major companies, are all concentrating on the high-volume routes at this point.

Mr. McCRACKEN: We're concentrating on the routes where at least we can make variable costs. Maybe not full costs, but at least variable costs. We have to get rid of those routes that are a substantial drain on our operations. But it's not a significant portion. In Oregon it's less than 2% of our operations covered in these six routes.

LEHRER: What was the -- why were you able to provide service to these various towns when you were a regular? What were the -- why have the economics changed so dramatically?

Mr. McCRACKEN: Well, I think you heard a comment in that film that many, many years ago a lot of people rode the bus to those communities. That is true. As the American family over the last 40 years is much more likely to have an automobile, more affluent, more able to use the automobile on the interstate highways that the government spent hundreds of billions for. We've seen our traffic dry up in many of those areas.

LEHRER: And it's not coming back?

Mr. McCRACKEN: It's not coming back in those areas where traffic today is down to maybe one person a week getting on at a bus stop.

LEHRER: Thank you. One of the senators, as we saw, who raised the most serious concerns about the impact of bus deregulation on rural America was Larry Pressler, Republican of South Dakota. Senator Pressler opposed deregulation when it was first proposed and, as we heard, he still does. Senator, have your pre-deregulation fears pretty well been borne out by the experience?

Sen. PRESSLER: Very much so. It's like a cancer in the rural areas and small towns, and in a lot of cities, that is depriving the elderly of transportation, young people, people of lower incomes. Let me say that I don't necessarily blame Greyhound. I blame Congress for passing what I think is a very bad bill, the deregulation bill, which is really re-regulation. I think we've got to correct it to stop some of these abandonments. I believe we've got to stick to the common carrier responsibility of the early 1930s, which provides that if you have some rich routes you've got to have some poor routes because we're really hurting people who need to travel. There is as much as 40% abandonment in many small towns and rural areas, and some of these are suburbs, of bus transportation. And these are people who are quiet, they don't have lobbyists in Washington; they're the elderly, poor people, students, and so forth, who use this bus transportation. And it's not -- replacement service is not springing up.

LEHRER: Are you a lonely voice on this, Senator, or is there a serious effort underway to re-regulate the bus industry?

Sen. PRESSLER: Well, I was the only vote against bus deregulation in the Commerce Committee, and I want to complemint this program, because it's the first time a national news show has done a program on this.And I've been working on it for two years. There's very little interest in it.

LEHRER: Why?

Sen. PRESSLER: I don't know. It's amazing to me because it's essential transportation for a lot of people who don't have very much clout. Now, some of the bus companies say that there are more entries, but that is charter bus service, where people are going on vacations or here or there. But in terms of the scheduled route that somebody can count on to get on a bus to go someplace, those are being cancelled out, and we don't have the train or planes in rural and small town areas. This deregulation of airplanes, trains and buses has been a disaster and will become more so in the next two or three years, as it becomes apparent that it's going to break down our total national transportation system, and especially in the area of bus transportation.

LEHRER: Do you think that Mr. McCracken and Greyhound should be ordered to run buses over routes where they only have a half a passenger a load or in even that Oregon route that had an average of four or six on one day?

Sen. PRESSLER: Well, that's a half a passenger per stop. There are going to be many more passengers per load. They shouldn't be ordered to run a major bus over that area, but there can be a smaller bus. But if they have some very rich routes, they should be willing to take some marginal routes.Now, we can't maintain all the same routes forever, but I am co-sponsor of a bill in Congress that will slow down the abandonment process, make it much more difficult. I think we have to go back to a form of regulation that will ensure a transportation system that if you have very rich routes between two cities you are also going to take some poorer routes. That's the way our national transportation system was built in rail, air and in bus transportation, and we're abandoning it, and it's like a cancer, that we're going to wake up in two or three years and not have commerce moving and not having a lot of people getting around who need to get around.

LEHRER: Mr. McCracken, does Greyhound want to go back to the way it was?

Mr. McCRACKEN: Let me make our position clear. In the late '70s we were very disturbed about the state the regulation was in. We had free entry at the ICC and many states.Anyone could come in over our lucrative routes, as the Senator calls them. But we couldn't abandon service, discontinue service, we couldn't change our schedules. We couldn't change our fares because of state regulation. We would have preferred to go back to that type of regulation that was known in the '30s, '40s and '50s. We didn't think that was politically achievable. The second-best choice, deregulate the industry.

LEHRER: And so that's your position now?

Mr. McCRACKEN: That's our position now. We think it should go futher -- total deregulation.

LEHRER: What's total deregulation?

Mr. McCRACKEN: That would -- right now you have a paperwork maze that the ICC and in each of the state regulatory agencies that we have to go through. And it serves no purpose, absolutely no purpose at all other than to generate a lot of paper and delay.

LEHRER: I think it goes without saying, Senator, you would be opposed to complete deregulation, right?

Sen. PRESSLER: That's right, and I think Greyhound makes some good points. And I'm not blaming Greyhound so much as I am blaming Congress and also most of the media, because this thing is happening without anybody paying any attention to it, and we're soon going to have all these ads on TV about special rates between two big cities and about coupons that you can get for traveling to places that are much traveled, but all the rest of the country doesn't have any transportation. And we're just within two or three years of that, not only in buses, but also in airlines and railroads, but especially the buses that carry the elderly and the students and lower income people who aren't making any noise and nobody's paying any attention to it.

LEHRER: Mr. McCracken, as you know, your colleagues, your competitors in the bus industry see Greyhound correctly as kind of the 800-pound gorilla in the industry because you dominate the field so big. Greyhound is really not hurting that badly, is it, as a result of deregulation? And won't you, if there are survivors, you will be the survivor, correct?

Mr. McCRACKEN: I don't think, as far as new service is concerned, you haven't seen the full impact of bus deregulation yet although so far carriers have applied to expand the bus network by over 17%, which is pretty phenomenal. There is more expansion going on than contraction.

LEHRER: Expansion on new routes or on existing routes?

Mr. McCRACKEN: New routes, both. New carriers coming in on a route that one carrier had exclusively in the past. We thought that was the whole theory of deregulation. Eliminate the exclusivity. But let us go in and compete like any other business competes.

LEHRER: What's wrong with that, Senator?

Sen. PRESSLER: Because you have a common carrier responsibility. If you take some very rich routes you should also take some routes that are not so rich. Indeed, in some cases, provide a service. And if the companies divide that up, then everybody gets some transportation. Now, you can't provide transportation everywhere to everybody in every remote area, but --

LEHRER: But your point is that with -- the competitive atmosphere will never cause Greyhound and Trailways, say, to compete down a route that there aren't a lot of passengers that want to ride their buses?

Mr. McCRACKEN: That's right. Nearly 30% of all the local stops in Iowa are being abandoned, for example, and that's because -- but the companies that are doing that are just taking the very rich routes, and the rest of it is being forgotten about. There is some public responsibility, some common carrier responsibility to even things out, and that helps the commerce of the whole country.

LEHRER: But Greyhound in this environment now does not agree with that, correct? I mean, you're not going to run routes if you're going to lose money on them.

Mr. McCRACKEN: I think the answer to that is the answer to the Senator's inquiry: why hasn't the media covered it? Because it's not a story. It's non-event. People are not being harmed by the discontinuances of service that were unneeded to begin with. And that's why there's little hue and cry. You mentioned Indiana earlier as being one of those significantly affected. The Indiana legislature just this summer decided to deregulate on a local basis. Now, those local elected officials close to the people obviously aren't concerned.

LEHRER: You say there are people out there who are being hurt, Senator?

Sen. PRESSLER: In the state of Iowa a study -- we had testimony this morning -- 30% of the small-town stops have been abandoned. There'll be many more. This means that these people will not have service. Now, they say there's a substitute service springing up. If you look into it it's maybe once a week or it's something very irregular, something that nobody can complain about, something that you can't depend upon. So we're in a situation that I believe -- and my office has statistics -- that from 30 to 50 percent of the small-town bus service will be gone by the end of this year.

LEHRER: Gentlemen, thank you very much. Robin?

MacNEIL: Japan agreed today to limit the export of automobiles to the United States to 1,850,000 units for another 12 months, beginning next April. That'll be the fourth year in a row of limits on Japanese cars. The United Auto Workers union wanted a two-year limit, and the Japanese wanted to extend it only nine months. The agreement, reached nine days before President Reagan is due to visit Japan, resolves one of the major issues in trade between the two countries.

We'll be back in a moment.

[Video postcard -- Escalon, California]

MacNEIL: Yesterday, environmental groups called a press conference to say they thought William Clark, former national security adviser, was not the right man to replace James Watt as secretary of the interior. Today, Clark had his turn as the Senate Committee on Energy and Natural Resources began hearings on his nomination.Pressed by Democrats to say whether he would change Watt's policies, Clark would only say the policies were all under review. Here is part of an exchange with Democratic Senator Dale Bumpers of Arkansas.

WILLIAM CLARK, Secretary of Interior Designate: Needless to say, I'll be making no announcements on any change of policy other than to assure you that the President has requested that I review all policy and procedure.

Sen. DALE BUMPERS, (D) Arkansas: You are not prepared today to announce any policy changes. Is that correct?

Sec.-Designate CLARK: Yes, Senator, that is correct.

Sen. BUMPERS: Well, Judge Clark, let me ask you this. On October 14th, just a little over two weeks ago, Ed Meese, on the MacNeil-Lehrer show, said, and I quote, "the policies of this administration inaugurated by Jim Watt and approved by Ronald Reagan will be the policies that will continue under the stewardship of Bill Clark." Is that a fair statement?

Sec.-Designate CLARK: Senator, I don't know about its fairness.I did not hear Mr. Meese, but I assure you that my mandate is from President Reagan. I take my direction from President Reagan. I communicate back directly to President Reagan.As I've stated, President Reagan has asked me to review the policies and the process and the personnel at the Department if I'm confirmed here.

Sen. BUMPERS: Most of the members of this committee -- and I won't say "most." Yes, I will. I'll say a majority of the members of this committee believe either publicly or privately that James Watt was a real travesty, and yet you're saying to us that the only thing you propose to do is to review the policies of the Interior Department. How would you expect me to make a determination on your fitness to serve in this job if you simply say you're going to go review what's happened in the past?

Sec.-Designate CLARK: Well, Senator Bumpers, as you know, in our discussion upstairs, I have begun that review, point one, and, point two, I don't think it fair for me to sit here and judge the job of Secretary Watt or any of his predecessor secretaries that I have referred to. To use the vernacular, they don't work here anymore. And but that should in no way suggest, as I attempted to upstairs, that there's going to be change in any particular area. The consultation and communication -- and there's a difference -- formal and informal, will continue as has been the case in the other positions I've held both at the state and federal levels. And --

Sen. BUMPERS: Judge, I must respectfully tell you that those are the same things James Watt said during his confirmation hearings.

Sec.-Designate CLARK: I've not sat down and asked myself, where do you agree with James Watt, where do you disagree with him? I'm trying to take it on a case-to-case basis, and -- which can be completed only after I get over there, if confirmed, and able to hammer out these issues, not just with the experts in the department but with many of you. And that's already begun. It began before today and a lot more of it has come through today.

MacNEIL: Clark said he would try to mediate among the many interests of the Interior Department and environmental groups. Jim?

LEHRER: [audio interruption] -- magazine publisher Larry Flynt and a federal judge is over. It ended this afternoon when a squad of 15 federal marshals escorted Flynt out of his Los Angeles mansion. Flynt had violated a court order to hand over a tape recording that may figure into the cocaine trial of automaker John Delorean. The tape, barely audible, allegedly includes threats made against the Delorean family by a government informer. Flynt was ordered to turn the tapes over to the Delorean trial judge yesterday but refused, saying he feared for his safety if he left his guarded mansion. The publisher of pornographic magazines has been confined to a wheelchair since an assassination attempt in 1978. Although Flynt had threatened to shoot anyone who delivered an arrest warrant, he went peacefully this afternoon when the marshals brought him out through a crowd of 100 reporters. Robin?

MacNEIL: It's been awhile since we heard much from the Reagan administration on one of its once-favorite topics -- the new federalism. But, while saying little, the administration has continuedits attempts to shift power and responsibility from Washington to the states and localities. Tomorrow, the new federalism takes a step forward when the cities are given much more flexibility to implement a key federally funded program -- community development block grants, or CDBGs. The program was set up nine years ago to encourage cities to fix up neighborhoods where low-and moderate-income people live. The Carter administration insisted that cities spend at least 75% of the grant money to help the poor. Tomorrow new rules go into effect, providing more local flexibility, and those rules have drawn fire from Democratic congressmen. They want the $3 1/2-billion program targeted on the poor. The man in charge of administering the grant program is Stephen Bollinger, assistant secretary at the Department of Housing and Urban Development. A leading critic of the new rules is Democratic Congressman Barney Frank of Massachusetts. Congressman, first of all, what's wrong with the new rules in your view?

Rep. BARNEY FRANK: Well, to quote a federal official just in February of this year, "We found programs have become so loose administratively that the people who are better off were getting them." I'm quoting Ronald Reagan. We've heard from the President several times that he can afford to cut overall programs, and in a real dollars community development block grants have been cut under this administration's budgets because, he says, we can target them better. What we are saying in Congress is that this program, this isn't revenue sharing. That's general money to be used by the communities as they wish. But this was meant to have a specific purpose, to make it easier for people of low and moderate income. And what we are objecting to is a lack of real procedures here whereby that's done. The administration is basically saying, well, we think and we hope that they'll do it, but we're not going to kind of mandate it. And we're just simply trying to carry out what Ronald Reagan tells us is good policy -- to tighten the administrative procedures so the money is spent as it ought to be spent.

MacNEIL: Congressman, give me a few examples of things you think it's appropriate to spend this money on in order to improve conditions for the poor and moderate income, and the kinds of things you think it might now be spent on, which you think inappropriate under the new rules.

Rep. FRANK: You have wealthier neighborhoods that may have money being spent here for their projects, for street lighting or for other things. Community development block grant funds can be going -- one of the things that the administration wants is to kind of give equal treatment to the purpose of removing slums and blight. Well, we have, unfortunately, a sad history in America of using federal funds -- and this isn't a Reagan administration problem, it goes back to the Truman administration. Federal dollars are used to tear down the houses that poor people live in on the grounds that their houses weren't nice enough, and then luxury housing it put up in its place and other facilities are put up in their place to which people can't come. I think the federal government has contributed to the problem of homelessness by not sufficiently over the years targeting the aid it gives, and in some cases cities are in a competition with other cities for economic development.They make deals with businesses. They say, well, we got to entice these businesses in, and the effect in many cases is to use federal monies in ways that make it even harder for the working people and the lower-income people.

MacNEIL: Secretary Bollinger, first of all, why are these changes needed in the rules, in the view of the administration?

STEPHEN BOLLINGER: Well, I think that perhaps the issue has been overstated by Congressman Frank. I don't think that this administration is doing anything more than putting into regulatory form exactly what the procedures have been prior to this administration in carrying out exactly what the statute contains. Congressman Frank and other congressmen since 1974 have debated this issue as to whether or not the majority of the funds of the community development block grant program should be used to principally benefit low- and moderate-income people.

MacNEIL: Isn't that what the law states?

Sec. BOLLINGER: It does not state that, and what they would want to put in is to taking what is contained in the purpose of the act in terms of providing benefit primarily for low- and moderate-income people is quite different than what the Congress has, over the years, put into the requirements of the law.

MacNEIL: Let's just get this straight. The act says it should provide improved conditions primarily for poor or moderate-income people. And you're saying that does not mean setting a percentage of the monies to be used that way?

Sec. BOLLINGER: That's contained within the purpose of the act. It is always stated that the purpose of this program is to provide viable urban communities by doing various kinds of activities primarily for the benefit or principally for the benefit of low- and moderate-income people. However, when they get into setting forth, in the statute, the requirements on how they accomplish this objective, which is contained within the purpose of the act, there is no annual test that defines how to at least have 51% benefiting low- and moderate-income people. I think it's interesting to note, though, the history of this program -- this program came about in 1974 by consolidating a variety of federal programs -- urban renewal, Model Cities, water and sewer programs. All programs, none of which had in their statutes, as this particular act right now does not have in its statute, a test that on an annual basis, 51% of the funds must benefit low- and moderate-income people.

MacNEIL: Well, let's put that back to the Congressman. What's wrong with that reasoning, in your view, Congressman?

Rep. FRANK: Well, it's not the statute.The statute does say -- 51%, by the way, is a proposal that has now gone through the House which I hope will go into the law and maybe Assistant Secretary Bollinger will join us; if he thinks it's ambiguous, 51% will help. But even without the 51%, the law says, and you have quoted it correctly, the primary objective of this title is to provide etc., etc., principally for persons of low and moderate income. It then says, "consistent with this primary objective," and goes on to enumerate these things. The problem is that in their regulation they have disregarded the primary objective, and my friend Steve says, "Well, that's just the purpose. Don't pay attention to it." No, I don't think it's fair to say that this has been in the statute and it's stated as the purpose, but it's kind of nitpicking to ask that we pay attention to it.

MacNEIL: Secretary Bollinger?

Sec. BOLLINGER: Well, I think that we, frankly, are not trying to avoid the language contained within the purpose. It's a question on where you treat it.They would prefer that it appear as a requirement contained within our regulations, a requirement that wouldn't have any statutory base. We, in monitoring and auditing on an annual basis -- you're concerned about, what are these funds being used for? Take careful attention as to the exact use of the funds.

MacNEIL: Well, let me ask, what is the purpose? Is it your purpose to use those funds so that all classes of people are assisted -- rich people, moderately rich people, middle-income, moderate and poor, or primarily to help moderate and poor?

Sec. BOLLINGER: The Congressman is focusing on one of three broad national objectives that are outlined in the act -- to principally benefit low- and moderate-income people is one; to prevent or eliminate slum and blight is another broad objective of the act; and to meet some urgent need of the community. The history of this program is that for a number of years and in the past administration they attempted to put into place regulations. They attempted to actually put into the statute this annual test. But it was soundly rejected.

Rep. FRANK: Steve, that's simply not true. The act does not give three equal purposes. You've summarized our disagreement. The act has -- I'm holding it in front of me. It says the purpose is principally to serve persons of low and moderate income. The other two purposes which you have put up in that same paragraph don't belong there. They are listed along with six other things as possible ways of achieving the principal purpose. The principal purpose is to help people of low and moderate income, and that's what you're disregarding.

MacNEIL: Gentlemen, I have to thank you both, and I dare say we'll be coming back to this.Jim?

LEHRER: Again, and quickly, through the major stories of the day. A force of 300 U.S. Marines stormed a small island near Grenada looking for Cubans and Grenadian army troops. They found no Cubans, but did capture 17 Grenadians without firing a shot. The House passed a 60-day War Powers limit on keeping the U.S. troops on Grenada.

Six U.S. sailors died in an accidental fire aboard an aircraft carrier in the Arabian Sea.

The Postal Service wants a 3" increase in the cost of a first-class stamp.

And the Geneva reconciliation meeting among the warring Lebanese factions got down to serious business. And that brings us to our list of those names released today of U.S. Marines and other servicemen killed in Lebanon and Grenada. BEIRUT: Dead

Cpl. M. Arnold, Philadelphia, Pa.; Cpl. J. Bonk, Philadelphia, Pa.; Sgt. T. Giblin, North Providence, R.I.; Lance Cpl. R. Gordon, Somerville, Mass.; Cpt. P.A. Hein, Oklahoma City, Okla.; Lt. J. Hudson, Milledgeville, Ga.; Maj. J.W. Macgroglou, Jacksonville, N.C.; Sgt. R.H. Menkins, Tully, N.Y.; Lance Cpl. T.S. Perron, Whitinsville, Mass.; Sgt. J. Phillips, Wilmette, Ill.; Lance Cpl. T.L. Rich, Brooklyn, N.Y. GRENADA: Dead

Spec. 4 P.S. Grenier, Worcester, Mass.; Spec. 4 K.J. Lannon, Dayton, Ohio; Quartermaster K.E. Lundberg, Kodiac, Alaska; Technician 1st Class S.L. Morris, Plainfield, N.J.; Sr. Chief Engineman R.R. Schamberger, Oakland, N.J.

MacNEIL: As we struggled like everyone else to absorb the events in Grenada and Beirut we came across an essay in this week's Time magazine by Roger Rosenblatt. The writer strikingly captures the mental confusion induced by days of conflicting images and emotions. We close tonight with our version of Rosenblatt's essay, "Days of Shock." Roger Rosenblatt on Military Week

ROGER ROSENBLATT [voice-over]: At the start all one had was images of airports -- the airport in Beirut where the bodies of Marines lay stacked in aluminum coffinslike salesmen's sample cases, and the airport in Grenada where Marines and Army Rangers swooped down for a surprise invasion. So sudden were both events that Americans could not take them in together except to note that both involved U.S. troops fighting wars in strange places, and the projection of their government's foreign policy in two disparate quarters of the world: Lebanon and Grenada. Why were we there? How were these places related? If the U.S. served a peacekeeping mission in Lebanon, when did we become the enemy? And what was Grenada anyway? The last one heard of that bead of an island the President was fuming about Grenadians consorting with Cubans and extending their runway for military purposes.

Airports again. As the week went on, the mind shifted rapidly between the sights as if they were split-images on a TV screen. On the level of feelings one could focus grief and apprehension on Beirut, but there on the tropical isle was a scene of emerging victory, one was told. Sorrow one place, triumph the other. Was patriotism supposed to drown out grief? More than feelings were confused. One had to grasp what was really happening. Lebanon was a bad idea in the beginning, but it was a good idea now, right? Don't back down, right? Lebanon was stupid, but Grenada was smart -- or was it the other way around? Americans went to Lebanon to stabilize the country. That must be good. Americans went to Grenada to rescue U.S. citizens.That must be good, too, if in fact the citizens had been in danger, and upon returning, most of them confirmed that they were. No more Irans, right? But what about the growing Soviet menace the President spoke of in his speech on Thursday night?

If the American people had trouble connecting Lebanon and Grenada, clearly the President had no such difficulty. So we were in those countries not solely for peace and rescue after all but because of the Soviets. Would we go anywhere or everywhere because of the Soviets? More abstractly, when the desire to provide freedom requires the use of force, is freedom damaged in the bargain? One looked at the President harder than ever. By week's end Americans were left with a sense of military vulnerability and of military efficiency. Sorrow, anxiety and problems. They were also left with an unnerving sense of distance from their government.One might not mind taking responsibility for one's nation's actions if they could be understood more readily or completely. But as yet that was not to be. In the near future, inevitably, would come charges, investigations and recriminations.

For the moment there were images of airports again. This time, American airports. Medical students bounded from the aircraft, kissed the ground and gave thanks for being home. The Marines returning from Lebanon had nothing left to give.

MacNEIL: The writer of that essay was Roger Rosenblatt of Time magazine. Good night, Jim.

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