The NewsHour with Jim Lehrer

MR. LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight, Part one of a series on the realities and politics of economic security with Margaret Warner in Dayton, Ohio, site of the big GM strike, and pollsters Linda Divall and Stanley Greenberg; a new battle over timber in the Pacific Northwest, Rod Minott reports; and the fight over product liability laws, Elizabeth Farnsworth runs a debate. It all follows our summary of the news this Monday.NEWS SUMMARY

MR. LEHRER: Around-the-clock negotiations continued today in Dayton, Ohio, to end the General Motors strike. The talks began yesterday morning. The 14-day-old strike at two GM brake plants in Dayton have shut down 25 of GM's 29 North America assembly facilities. More than 142,000 workers have been idled. A key issue between the United Auto Workers Union and GM is the buying of parts from outside suppliers. Dayton is the starting point of our week- long look at the realities and politics of economic insecurity. It begins right after this News Summary. In another economic story today, MCI met rival AT&T's offer to give customers a free trial on the Internet. MCI is the country's second largest long distance telephone company. MCI will give customers five free hours of Internet access per month. In Massachusetts today, 24-year-old John Salvi was convicted of killing two women in a shooting at two abortion clinics. He received a mandatory sentence of life in prison without parole. He was also convicted of armed assault with intent to murder five other people wounded in those 1994 attacks at the Boston area clinics. Salvi had pleaded "not guilty" by reason of insanity. In Washington today, the U.S. Supreme Court agreed to review the size of buffer zone set up to shield abortion clinics from protesters. New York's current 15-foot zone was challenged by anti-abortion demonstrators in New York. They said it violated their free speech rights. In 1994, the court upheld a 36-foot zone around a Florida clinic. In New Orleans today, President Clinton made a pitch for his free trade policies. He participated in a ribbon-cutting ceremony at the opening of an enlarged wharf in the city's port. Mr. Clinton replied to claims that open markets mean lost jobs for American workers.

PRESIDENT CLINTON: Ninety thousand men and women across Louisiana already earn their living because of this pork. The future is going to bring more trade, more opportunities, and more jobs because you embrace the challenge of change and look to the future with confidence. What we need is trade that is both free and fair, truly open, two-way open trade. The Port of New Orleans proves that if you have two-way open trade, Americans will do very well, and we'll be just fine in the future.

MR. LEHRER: After his speech, Mr. Clinton went to Fort Polk in Western Louisiana. He reviewed army troops just back from Operation Uphold Democracy in Haiti. He decorated five soldiers representing each branch of the armed services participating in that Haiti mission. He also paid tribute to families of service personnel now in Bosnia. In Bosnia news today, more than a dozen arson fires raged in a Sarajevo suburb. It is the last of five Serb districts scheduled to be transferred to Muslim-Croat control tomorrow. Serb gangs burned and looted the main market, warehouses, and dozens of apartments. A United Nations official called it a deliberate campaign of arson, robbery, and intimidation. Secretary of State Christopher met with the Balkan leaders today in Geneva, Switzerland. He sought to reaffirm their compliance with the Bosnia peace accords. Christopher praised the peace implementation force called IFOR.

WARREN CHRISTOPHER, Secretary of State: The killing has ended. The ironies have withdrawn. This is an extraordinary accomplishment, one that many people thought would never be possible, so today, we will enter a new phase. As IFOR continues its mission, the international community will intensify its focus on the critical issues of human rights, freedom of press, war crimes, freedom of movement, and reconstruction.

MR. LEHRER: On the Taiwan story today, Chinese chips and planes again held military exercises Southwest of Taiwan. Inresponse, Taiwan's military demonstrated how it would repulse an attack from the Mainland. The Chinese war games coincide with the run-up to Taiwan's Presidential election this Saturday. In the Philippines, at least 80 people were killed and many more severely burned in a disco fire in a Manila suburb. The disco was filled with students celebrating the end of the school year. And that's it for the News Summary tonight. Now it's on to our new series on economic insecurity, timber in the Northwest, and a product liability debate. SERIES - ECONOMIC [IN]SECURITY?

MR. LEHRER: We begin tonight in Dayton, Ohio. There's a Presidential primary there tomorrow as there is throughout most of the Midwest, and there's a strike at two GM brake plants there today, as there has been for the last 14 days. Both events are relevant to economic security or insecurity, the new issue that is sweeping through the worlds of politics and economics right now. We will examine that issue throughout this week. Part one begins in Dayton with Margaret Warner.

MS. WARNER: When workers went on strike at two General Motors brake plants in Dayton this month, it was just the latest economic jolt to a city that's had more than its share. This city of 200,000 is a resilient place. It has a rich history of invention and entrepreneurship. Dayton natives invented the cash register and built it into a worldwide business, National Cash Register or NCR. Daytonians Orville and Wilbur Wright invented the airplane. Other inventions helped make Dayton a major manufacturing center for auto parts, machinery, and tools. Today, manufacturing still provides 1/3 of the jobs in Dayton. Fortune 500 companies like multinational Mead Corporation are prospering. Smaller, high-tech companies are growing. Unemployment in the Dayton area is just 5.1 percent, better than the nation as a whole. The median family income is slightly below the national average, however, about $36,000. And it now takes most families two wage earners to achieve that. Still, this is a dramatic turnaround from the recession and double-digit unemployment of the late 1970s when some thought towns like Dayton would die, and yet, there seems to be a sense of unease.

BRAD TILLSON, Publisher, Dayton Daily News: People don't feel the community is on its back. They don't feel the community is threatened, per se. They just feel uneasy about their particular situation and how that's going to evolve. I think below that there is kind of a fragility that people feel. They don't feel that perhaps if it's going well today, that it'll necessarily be going well tomorrow.

MS. WARNER: Corporate takeovers and restructurings at companies like NCR helped create that insecurity. NCR, which in its heyday employed 25,000 people here, shrank to 5,000 local workers before AT&T took it over five years ago. Since then, its work force has been cut to half that. Those jobs are being replaced, but many are in the lower-paying service sector and few of the newer manufacturing jobs at smaller firms offer the heavy wage overtime and benefit packages that blue collar workers had come to expect. One Dayton institution is profiting from all this upheaval. Sinclair Community College does a booming business in retraining. Tens of thousands of Daytonians have had to cope with these changes in their professional and personal lives. David Gaylor, who's 45, had parlayed his master's degree into a 13-year career in human resources at NCR and AT&T, but last Fall, he was downsized out of his job. For now, he's working for NCR as a short-term independent contractor and counts on his wife's teaching salary to help them support their three teenagers. At 57, Lucille Dursch is taking computer classes at Sinclair, after being downsized out of NCR- AT&T. First her NCR assembly line job was moved to Colorado, so she joined the company's cleaning staff. Last Summer, AT&T eliminated all its union janitorial jobs and contracted out the work. She took early retirement to preserve her health insurance. Union membership has helped protect 45-year-old Tony Curington so far. A worker at one of the GM brake factories, he isn't taking part in the strike there because he works on non-GM contracts. This father of five enjoys a comfortable life thanks to his $19-an-hour wage and his wife's salary as an emergency room nurse. The fact that Jeff Woodward, 48, has his own plane, helped salvage his career prospects. He left Lexis-Nexis last Spring, after Mead Corporation sold it to foreign owners. After six months out of work, he began commuting each work to work as chief financial officer of a company in Florida. His wife teaches school. Gina Clark, 35, is a single mother who used to make good money in the cable TV business, but a series of restructurings in the communications industry left her without steady work a year and a half ago. She now does temporary work at ten to twelve dollars an hour, most recently at NCR-AT&T and at Lexis-Nexis. At 39, Harvard Business School graduate Jim Whelan is doing well. He's executive vice president of Gem City Engineering, a growing high-tech manufacturing firm. Gem City sells automation equipment to microelectronics companies worldwide. His wife used to teach school but now stays home raising their four children. We gathered these six Dayton residents to talk about how they've come to terms with this time of economic change. We met last Friday morning at the Engineers Club, a Dayton landmark founded in 1914 by two of the city's business pioneers.

MS. WARNER: Thank you all very much for being with us. Dave Gaylor, let me start with you. How different is your economic situation today than what you expected when you got out of college, what you thought your life, your professional life, was going to be like?

DAVE GAYLOR, Independent Contractor: Well, I think when I graduated from college back in the 70's, I had a perception that my career would be with maybe one or two companies, and that it would last as long as I wanted it to, but the security would be there, and I think that over the, over the past two decades, I've had an awakening to the fact that it's not that way anymore. I, myself, have been with a number of companies, the last one being AT&T-GIS here in Dayton.

MS. WARNER: The former NCR.

DAVE GAYLOR: The former NCR, right, and that was a 13-year relationship, and unfortunately, that ended. My whole outlook on career has changed and moved from a security standpoint to one that I think the key is going to be flexibility. I have to be flexible and probably other people in the work force are going to have to be flexible to be able to adapt to the needs, the changing needs in the work force and be able to meet those needs with some kind of skill set that we hopefully have.

MS. WARNER: Lucille Dursch, you've had to go through a lot of changes also. Tell me how you've coped with that.

LUCILLE DURSCH, Community College Student: I'm very insecure because I haven't got the skills for today's work world, and I'm going back to school at Sinclair, and hopefully I can finally get a job. I'd love to go back to AT&T-GIS but not in the area that I was in, maybe onthe same floor, but, umm, because I cried when I left there, and my financial status has dropped dramatically.

MS. WARNER: Tony Curington, you are at the GM plant. You're not on strike because you're working on parts for non-GM plants, but tell me how has your career followed or not followed the expectations you had.

TONY CURINGTON, Auto Worker: My expectations of my career was in banking. I did that for 10 years, and I always wanted to get into a field where I could kind of grow and earn a decent wage to provide for my family, so I had the opportunity to join the GM family. It's not really what I like, but I don't think anybody-- and I tell my kids this too--that you are going to always get into something that you think you'd like and after a while you find out you don't like it, but you stay there because of the rewards or financial security.

MS. WARNER: So how secure do you feel financially or economically?

TONY CURINGTON: We have a lot of plants that GM has closed, gone South, and gone North, the borders, so we're always in a tenuous situation, and everybody's stressful and everybody's on pins and needles, but everybody's kind of got to keep a positive note about it.

MS. WARNER: Jeff Woodward, you've also had to make some rather major changes in your life, your leaving Mead's Nexis-Lexis. How secure are you feeling?

JEFF WOODWARD, Corporate Executive: I think the realization for me is that the kind of lifelong security my father--father retired from NCR after 35 years here in Dayton, and those kind of days are gone and umm, we are all, I think, moving toward becoming really a nation of independent contractors to a large extent. Once you accept that, if you have the skill sets and the educational background to adapt, if you can be an adapter, but really in a way there is about as much security from being able to do that as there was from being associated with a major company in a lifetime situation.

MS. WARNER: Explain that. What do you mean?

JEFF WOODWARD: Well, just like a company has a product, you have a product to offer. The product is yourself, and if you, if you can keep that product new and alive and if you can keep it optimistic and meet the challenges, I think you're absolutely in better shape to dictate your own future than you are if you are a cog in a wheel and the wheel gets sold from machine to machine, and the new owner of the machine may not think that wheel's very important, and I would rather be in control.

MS. WARNER: Gina Clark, you've also gone through some--a lot of changes--

GINA CLARK, Temporary Worker: Starting with an acquisition and going all the way back to 1987 the company I was working for was bought, so I was displaced, and so I moved to Dayton in 1988, and very quickly, after moving to Dayton, a company I was working for was bought and sold again, so this is--this has gone on for several years, but most recently, I've gone from making well over $50,000 to making less than $12 an hour, so, yeah, not feeling real secure, and last time I was doing my taxes and it wasn't counting the numbers on my W-2's; it was counting the number of my W-2's, because I'm now currently working as a temporary.

MS. WARNER: And Jim Whalen, now your company is benefiting from this changing economy.

JIM WHALEN, Corporate Executive: We are a designer and builder of automation equipment, and our niche is really in the microelectronics, the computer field. We've been able to increase our exports and also increase our business domestically to the point where over in the last six years we've more than doubled our business, grown it at over 15 percent annually, so we've been a real success story I feel like in Dayton, Ohio.

MS. WARNER: And how personally secure do you feel?

JIM WHALEN: I feel very secure.

MS. WARNER: Let's talk a little bit about, in fact, what impact as you're all coping with the changing economy it does have on your family life. Dave.

DAVE GAYLOR: Well, I think there have been some pros and cons to it. The cons, of course, the boys, I have two teenagers, three teenagers, for that matter, but the two younger ones are periodically asking, have you got a job yet, have you got a job yet. On the other hand, they see me more, and I've been able to do more things of personal interest with the community, as well as spending more time with them.

MS. WARNER: Jeff, what about you?

JEFF WOODWARD: Really, umm, even though I commute to Gainesville, Florida, the reality is the family tells me that I'm easier to live with now than I was before. I was spending sixty or seventy hours a week with Lexis at that time.

GINA CLARK: I have to disagree. I have to disagree, because I have been a single parent for years, and when you're making the kinds of money I was making with an expense account, with the ability of, as you said, to come and go as you please, I never had, I never understood all of the slings and arrows that were, you know, thrown at single parents because we just never experienced any of that. When I lived in Houston,I had a nanny and a housekeeper and never had to do any of those, you know, things. I could spend time with my son and do my job well, and when that kind of income goes away, you have to work, you have to be some place at 8 and leave whenever the boss's project is done and get permission to go to a dentist appointment, much less your son's football game. It changes your whole life, and my son, Jordan, has been extremely patient, but his patience is running thin, I think.

MS. WARNER: Lucille, what about you?

LUCILLE DURSCH: Of course, as you get older, you find out your skills aren't up to date, and as you get older, I don't--you can't prove it, I guess, but they don't want to hire the older folks for all kinds of reasons, and I'm also kind of being educated on that at school, about how the work world looks at older employees. They may be dependable but sometimes, I guess, they're set in their ways and they're not flexible, and I'm very flexible, I'm very dependable. [laughter among group]

MS. WARNER: Jim, let me ask you, what, I mean, you, your company is very involved in the global economy. Do you think that's all to the good as we, as we move, all of us, into this global economy, and do you think to downsize?

JIM WHALEN: Of course, one of the political issues is the whole issue of trade barriers which Pat Buchanan advocates. I think a free world trading society is just as important. I think that if we put any kind of barriers up that we're going to keep competition out, we're going to become more inefficient.

GINA CLARK: I'm not against multinational competition. I mean, I want to make myself extremely clear. I loved the fact that while I was with AT&T for a short time that all the work that I did was international. I was constantly on the phone to Russia, to Hong King, you know, it was fascinating, and it was leading edge, and it was wonderful, but the people that I was working around had watched people that they'd worked with for 35 years lose homes, commit suicide, so I'm thinking to myself if that's the cost of branching out into this many markets this fast, then maybe we need tostep back and take a look at this, and I'm not saying slow down the process, but let's take a look at it and say are we going the right way?

JIM WHALEN: One of the unfortunate things with these multinational companies is that they have pressure, they're publicly traded, they have pressure for quarterly earnings results, period, and, you know, if they have to--they're very blatant about if they have to lay people off or cut costs, that's what they do to meet their quarterly earnings so their stock price can stay up. One advantage that Gem City Engineering has is that we are a smaller company, we have 500 employees, we've been in business 60 years privately held, and we don't have these quarterly pressures. We have a tremendously loyal work force. Our average tenure of people is more than 12 years, and we've been able to do that because we're, we're good to people. When times are tough or whatever, we don't go through those exercises, so, umm, it's unfortunate with these multinationals but it's a reality that they have to, they're victims of the shareholders and this quarterly earnings.

JEFF WOODWARD: I'm not too sure I buy that. I'm not too sure it's not AT&T management responding to bonus plans. AT&T lays off 40,000 people and the chairman gets a $5 million bonus payout. There's something not right about that equation.

DAVE GAYLOR: Oftentimes, companies look for the magic fix-it. We're into re-engineering; we're into infrastructural changes, and things like that, kind of like the soup of the day, what works today. And the issue is we don't give it time to nurture, to progress, to check it out. We want to go for the next quick fix, and oftentimes when that happens, people get caught in that shuffle. To me, the movement of the work force is going to be more towards the area of small business. I think we're going to see a more--a boom in people looking at small businesses as an option careerwise and as a professional direction for themselves, and less so on the big corporation.

MS. WARNER: Do you think that this changing economy has affected the whole loyalty issue, the loyalty question, the loyalty employees feel to companies as well as vice versa?

TONY CURINGTON: Well, you know, I can kind of sympathize by saying there isn't any.

JEFF WOODWARD: I think loyalty is pretty passe. I think most people would settle for fairness at this point in time, that treat me fairly. Treat me--if you come in and buy my company, learn my skill set, learn what I can do for you before you just lop off 20 percent just to make the numbers. Make sure it's the right 20 percent.

MS. WARNER: Does anybody here think that the government should be stepping in to try to soften the effects of all these political- -all these economic changes we're seeing?

JEFF WOODWARD: I think we've proven to ourselves in the past that whatever the government steps into it mucks up. At least, that's what it's prove to me.

MS. WARNER: Does anyone feel differently on this question about government's role? Lucille.

LUCILLE DURSCH: Well, I would just like to see 'em continue or improve, uh, the assistance to help displaced workers to get back on their feet. I would like more, I guess you'd say, financial assistance trying to get my education up to some kind of skill.

JIM WHALEN: We need an environment nationally and locally that's going to be conducive to small business and growing small business and making that the backbone of the United States. The other important point, though, is education and training. We need to have that addressed at the local levels, at thestate levels, and at the national level. And I think that that's crucial to develop a good quality work force in the United States.

MS. WARNER: Are any of the major political figures on the national scene do you think speaking to these issues in a compelling way?

DAVE GAYLOR: Well, you read where Pat Buchanan has come out and we've talked about AT&T this day, that--and he's pretty much skewered Bob Allen for the layoffs, and yet, "U.S. News & World Report" said he has not released any of his AT&T stock, so yeah, the words are there. You hope that what they're saying is valid and true. You trust it is. But on the other hand, actions can speak louder than words, and, and is that just a ploy to be elected, or is it in actuality his stand and his concern about the future work place impact?

MS. WARNER: Gina.

GINA CLARK: And I also think, you know, actions do speak louder than words. I would really like to see the current administration just stick to the original promises that it made. Do I trust any of the candidates? [shaking head no]

LUCILLE DURSCH: Not very much.

MS. WARNER: Tony.

TONY CURINGTON: That's my sentiment there. I have absolutely no trust. If I can't reach out and touch 'em, you know, I just don't trust 'em, but it's the thing that Jeff was talking about that every time the government gets in, you know, it seems like there's more hands in the pie. Somehow, somebody else benefits other than the small businesses or the persons who's actually doing the work.

LUCILLE DURSCH: I agree with him completely. I think a lot of times they promise you what you think you want to--tell you what they think you want to hear. Then when they get in there, uh, either they change their mind or somebody vetoed 'em down, they don't tell you they haven't got the all in all power to do everything they're promising you.

JEFF WOODWARD: When this country started, the people in government were something else before they were politicians. We now have professional politicians. The idea that you can be a politician all your life and be prepared to deal with the kinds of problems and questions that this country has anymore, I think, I think we're past that point.

MS. WARNER: Well, thank you all very much. This has been terrific. Thanks.

MR. LEHRER: Now, putting these Ohio voices into a national political context. It will be done by two pollsters, Republican Linda Divall, who worked on the Gramm Presidential campaign, and Democrat Stanley Greenberg, who worked on the 1992 Clinton-Gore campaign. Linda, are those folks in Dayton representative of the country as a whole right now?

LINDA DIVALL, Republican Pollster: I think they are, for a couple of reasons. No. 1, you see that people are struggling with concern about their future economic security. What we're seeing today is that people now begin--are beginning to understand that they will go through five, six, eight different career changes, that it's not the same was it was twenty or thirty years ago where you will be with one corporation. And that means that there's uncertainty perhaps not so much about the job they hold today but five, ten years hence about their long-term financial security and their kids' place as well. What was interesting about that piece is how many of the people felt it was necessary to take on more personal responsibility for themselves in terms of job retraining, not just looking at a government handout but better preparing themselves to compete in an international, global marketplace.

MR. LEHRER: A kind of acceptance, Stanley Greenberg, that this is the new reality. Do the polls--do the polls reflect that nationally?

STANLEY GREENBERG, Democratic Pollster: They do. I mean, this is painfully real. I mean, this is I think an exceptional focus group discussion, and I think brought out many of the currents that are there in the country. You've got people that are scrambling to put together an economic life, many jobs, and one of the participants talked about multiple W-2's. The people feel they're on their own, they're putting these jobs together themselves. And the economy is creating a lot of jobs, but they are perceived to be, and I think accurately, lower-paying jobs, which requires that they have more family pressure, put in more work time, more overtime, multiple jobs. And it leaves people feeling that they are under enormous pressure. A lot of sense here that the family was under pressure as a consequence of this kind of economic change.

MR. LEHRER: What do you make of the line that we are a nation of independent contractors now, that one man said?

MR. GREENBERG: I think it's both true, both as, I think, an empirical statement and for some, I think particularly for the better educated and the professionals, umm, I think exciting. For most of the others, I think they were scared of that, that role, and I think one of the problems they have with the government, is the government hasn't been there. Their perception is the government hasn't been for them. They'd like to see that there's help for education and training in order to put together those skill sets to be able to be sure that you're going to be able to have portable health care or pensions, you're going to have this kind of instability, and I think they're looking for a different kind of government role in this new period.

MR. LEHRER: We'll get back to the government in a minute, but this independent contractor concept is, as Stan Greenberg says, that only applies to people with a lot of training or a lot of experience, a lot of education, does it not?

MS. DIVALL: Well, not necessarily. I think there are a lot of people who are looking for flexibility in the work place, and they don't want to be wedded to going to a company and working nine to five, so they're looking at working out of their house or working out of their plane or, you know, the golf course in my case. That's what I would strive for, but I think people are looking for some flexibility in the work place, where they're not wedded to sitting in a chair, working eight hours a day, so they are saying to themselves, as Jeff, I believe, said, you know, the product to offer is yourself. How is it that you can sell yourself and say to that corporation that they need you? Now, there's a number of different ways of doing that, but I think flexibility, which a lot of people mention in that article, really is key, and having the freedom from your work place to spend more time with your family to eliminate some of those pressures that we're seeing in all of our polling data is very dominant.

MR. LEHRER: Well, my point, my question is: Does it have relevance beyond a certain economic and educational level?

MR. GREENBERG: Well, I said, we can romanticize this.

MR. LEHRER: Yeah.

MR. GREENBERG: But for the professionals, you know, and who can fly off to Florida for a job, that's one thing. My sense of these, these voters, both in our research and also the ones you spoke to in Dayton, these are people who feel very vulnerable, powerless relative to the companies, knowing that they can be dropped at the, you know, next quarter if they need to cut 20 percent, and I think they feel very much on their own and powerless, and they're trying to deal with the consequences in their lives. How do you have to now have permission in order to, you know, go to your kid's football game--they're living the consequences.

MR. LEHRER: Now, let's go to this government question, Linda. The--it was clear that none of those folks are dependent on the government, or are expecting the government to do anything to help them out of this problem that they "have" right now, and it's a big problem. It's varying degrees, and we heard the varying degrees here, but they don't look to government. Is that a new development?

MS. DIVALL: No, it's not, and I think it's a very strong Midwestern flavor that you saw here as well. A couple of things on that point. No. 1, I thought the participants in this group showed a remarkable degree of resiliency, that they were going to do a lot to take care of themselves, and yes, they were going through some economic downturns. And the survey data is interesting because people believe that the future for this country will be optimistic, but they're worried about the standard of living and about a majority of people said that the standard of living will fall, which is reflected in a couple of the respondents in terms of their view. But, ultimately, when you look at prescriptions, they're saying, I think, job retraining at the local level or the community level, because they know our problems best, but if the government comes in, they'll just make the situation worse. That intervention from up here does not do anything to take care of our local needs in terms of understanding our community, and if you just look at Dayton in terms of the small business creation, unemployment rate being only 5 percent, if you go back and look at 1982, the height of the recession during Ronald Reagan's administration, we found in our survey research in that state that 80 percent were concerned about losing their job in the next year.

MR. GREENBERG: Well, I think they're heroic, I mean, not just resilient. I think they're heroic, and I think we're being too literal in their reaction to government. I mean, what they are saying is that we are scrambling, we are making this personal effort to put together an economic life, government hasn't been there for the small business, government isn't there for the person who works, works hard, plays by the rules. They want to make sure that there is support for education, training, there is support for the things that they are doing in order to, you know, support their families. They think the government's not been there, but that's not the same thing as saying government shouldn't be there. They're angry that government hasn't played a more important role in support of their needs.

MR. LEHRER: There's another element to it too at the end, it's just absolute mistrust of the people, whether they're Democrats, as you are, Mr. Greenberg, or Republicans, as you are, Ms. Divall, they don't trust any of you all.

MR. GREENBERG: That's a fair statement. I was going to let Linda answer that one. [laughing]

MS. DIVALL: I think there's going to be a burden on both Presidential nominees as we go into the selection to talk about which party is most capable of restoring economic prosperity and speaking to the middle class, particularly the financially squeezed middle class, which is vast at this stage. We did a survey not too long ago, and we found out that it was just very evenly divided on this issue of restoring economic prosperity. 42 percent favored the Republicans, 37percent favored the Democrats. That could flip any way. What voters want to hear is not so much more government intervention but who--which of these two candidates speaks directly to them and understands the tension that they experience on a daily basis, that they are financially pressed, and not that they want to have government step in and solve their lives. You saw that. They know that that's not possible but understands their concerns and can try to get local government more involved.

MR. GREENBERG: Well, there's also some basic conditions that make it possible to put together those W-2's. The administration's created 8 million jobs over the last four years. They know--they don't believe they are high-paying jobs, but they do believe they are at least able to scramble and put together an economic life. If this had been four years ago, with unemployment 7 percent, this would have been a different kind of conversation. They wouldn't be able to pursue these personal strategies, so the kind of growth we had over the four years makes this possible, but it's not enough. They want--I think they want political leaders to recognize their struggle, and they want to know that political leaders have a vision on how this can change. I don't think people are going to settle for this, this outcome.

MR. LEHRER: Is--you both--you used the word understand--you used the word recognize--is that what the folks want now from their political leaders, even if they can't solve the problems, at least talk about it and understand what they're all about?

MS. DIVALL: I think there's a feeling that once people get elected and come to Washington, once the plane lands at Washington National Airport, that they have totally lost the ability to read into their voters why they got there in the first place in terms of any type of sensitivity to the problems that they experience. There is this disconnect and particularly on the Presidential level, when you fly from airport to airport, tarmac to tarmac, people feel that they're really not in touch with voters' lives, and that's--

MR. LEHRER: And that's true elsewhere than Dayton, Ohio?

MR. GREENBERG: Oh, for sure. I mean, they're making an heroic effort. They want the political leaders as a starting point to recognize that they should be--their effort, they want to be the center of the story. They think our politics ought to be about their lives.

MR. LEHRER: Well, they're going to be the center of the story on the NewsHour all week. We're going to be talking about this. Thank you all for helping us getting it started tonight.

MS. DIVALL: Thank you.

MR. GREENBERG: Thank you. FOCUS - TIMBER!

MR. LEHRER: Still to come on the NewsHour tonight, a new battle over logging in the Pacific Northwest and the product liability debate. Rod Minott of KCTS-Seattle has the timber story.

UNIDENTIFIED ENVIRONMENTALIST: I'm ready to go to my sacred place and invite all my brothers and sisters to come with me.

[CROWD CHEERING]

ROD MINOTT: Defining police orders, environmentalists recently marched up a logging road in the Olympic National Forest.

SPOKESMAN: You are subject to arrest beyond this point.

MR. MINOTT: In all, 89 arrests were made as protesters attempted to halt the clear-cutting of giant old growth trees on a piece of U.S. Forest Service land.

MAN: Hey, Ben, how come I keep finding you up a tree?

MR. MINOTT: One protester climbed a tree, hoping to escape capture.

UNIDENTIFIED SPOKESMAN: I mean, you all don't argue that clear- cutting of old growth is, is, you know, a practical way of forestry, do you?

MR. MINOTT: Others voiced outraged at being handcuffed.

PROTESTER: I did not hurt anybody, and I want these off.

MR. MINOTT: This scene is being repeated in national forests across the Northwest, which until recently had seen a truce in its war over timber. But some environmentalists say they have no choice but to break the law because of legislation Congress passed and President Clinton signed last Summer. It's known as the Salvage Timber Rider, which suspended some environmental protections and encouraged stepped-up logging of dead and dying trees. But the timber industry defends the special rider as vital to saving jobs. Chris West is with the Northwest Forestry Association.

CHRIS WEST, Northwest Forestry Association: The bottom line is if we didn't have some protection from litigation, we'd have continued gridlock. And the environmental community is upset because they can't use the courts to be obstructionists.

MR. MINOTT: With environmental laws on endangered species and clean water temporarily lifted, thousands of acres of federal forests in Washington and Oregon have been opened up to cutting through the end of this year. Supporters promoted the rider as a way to improve forest health, by allowing the logging of timber that had been damaged by fire or bugs. But one section, which had nothing to do with dead or dying trees, also required the government waive environmental laws in some areas so that healthy, old-growth trees could be cut.

STEVE WHITNEY, The Wilderness Society: Ostensibly, this was going to allow the harvest of dead and dying trees. Okay, well, sounds good. What happened was the day after the President signed the bill, the timber industry went into court and succeeded in getting a whole series of judgments that had the effect of, of expanding the scope of this logging rider.

MR. MINOTT: Across the country, it's estimated that 6 billion board feet of wood will be cut under the rider. Of that, about 600 million board feet of mostly healthy, old growth, will come from Northwest forests. By comparison, it takes about 10,000 board feet of timber to build the average home.

DAVE BUSE, Mill Owner: We've lost money the last several years trying to stay operating. Log shortage, price of logs, and, and, uh, the lumber market have all combined to, to make it real tough for not only us but most of the mills around this area that depend on public timber.

MR. MINOTT: For mill owners like Dave Buse, the timber rider comes as a relief. It's the 55-acre stand of old growth he's purchased rights to log in the Olympic National Forest that has been the focus of protests.

DAVE BUSE: Sales like this just give you that little lift out of the hole that sometimes make all the difference in the world to whether you survive or don't.

MR. MINOTT: Buse's logging is well underway. Some of the trees here are 250 years old. Until the salvage rider passed, this site, like many others, was off limits to cutting because of concern over harming fish and wildlife. Buse says he's taken extra steps to protect the sale from environmental harm, such as leaving a 50-foot buffer of trees along a stream that drains into spawning grounds for trout and salmon. But critics say any clear-cutting like this threatens fish and wildlife.

STEVE WHITNEY: What we're seeing under this rider, big, ugly clear cuts of ancient cathedral forests in the Northwest, this is the kind of thing that the rider has enabled and, umm, is really tragic because the consequences of it are that we're seeing the salmon streams running brown, we're seeing our formerly clean water being degraded. Quality of life here in the Northwest is a function of healthy forests. It's all--it's all going down the tubes, and it's because of this rider.

MR. MINOTT: But the timber industry continues to insist the clear-cutting poses little threat.

CHRIS WEST: The release of these existing sales may result in the harvest of ten to twelve thousand acres, which is a lot of land, but the President's forest plan covered twenty-four million acres, and nineteen million acres of that was permanently preserved and protected. So the harvest of ten to twelve thousand acres out of twenty-four million acres is just a drop in the bucket.

SPOKESMAN: Clinton, repeal the clear-cut deal!

MR. MINOTT: Environmentalists also remain angry at President Clinton for signing the salvage rider. To step up pressure for repeal, they recently staged a protest to coincide with the Seattle visit by the President. At a campaign event later that day, President Clinton said he had heard their message.

PRESIDENT CLINTON: We've done a lot of good things in the last three years, and we made one or two--and we've made one or two mistakes under the law of unintended consequences, and one of them was the unintended and unwarranted consequence of the way that timber rider's been carried out. Patty Murray is going to help us fix it, and I thank her for that.

MR. MINOTT: despite that Presidential support, Sen. Murray's proposal to repeal the rider was defeated last week in the U.S. Senate. Congress is now considering another amendment attached to the omnibus budget bill that would slightly modify but not repeal the salvage timber rider. It would allow the government to offer timber companies either a substitute stand of trees or buy back their logging contracts in exchange for saving old growth forests. Meanwhile, many environmentalists vow until lawmakers vote for repeal they will continue their fight with civil disobedience in the forests of the Northwest. FOCUS - SETTING LIMITS

MR. LEHRER: Finally tonight, product liability, Elizabeth Farnsworth has that story.

MS. FARNSWORTH: Are courts awarding excessive amounts to consumers who sue for defective products? That is the issue once again before Congress. Republicans had tried to limit awards as part of their Contract With America last year, but that effort was defeated. Now they are back with a compromise version and with the support of some key Democrats. The Senate is expected to vote as early as tomorrow, the House later this week. President Clinton announced this weekend he would veto the bill. The legislation would limit punitive damages to either $250,000 or two times so- called compensatory damages, awards for economic loss and pain and suffering. The higher amount would be awarded to the plaintiff. Businesses with 25 or fewer employees would pay the lower amount. A judge would be permitted in some cases to assess additional punitive awards for egregious conduct by large manufacturers and municipalities. The measure would limit each company's liability for non-economic damages, such as pain and suffering, to the business's percentage of responsibility for damages and would reduce the amount of damages that are awarded if the product was misused or altered. We now turn to two people who've been involved in the debate: Joan Claybrook, the president of Public Citizen, the consumer advocacy organization founded by Ralph Nader; and Paul Huard, a senior vice president for the National Association of Manufacturers. Thank you both for being with us. Mr. Huard, this bill is far more focused, more limited, than the bill that had passed the House. Is it worthy of support?

PAUL HUARD, National Association of Manufacturers: Oh, absolutely. I think what has happened here is that the practical realities have settled in on the House, which was much more ambitious and did have a so-called Contract With America provision. They have fallen back basically to a bill that has been in the making for close to fifteen or twenty years, which has strong bipartisan support, indeed was developed, primarily while the Democrats were in control of both Houses of Congress as supporters such as Chairman Dingell of the House Commerce Committee, an ardent Democrat who supports this bill, Sen. Rockefeller, moderate, if anything, hardly a man who is a front for the business community, this again a very reasonable, moderate bill, goes back many years, is not really something that's sprang out of whole cloth in the Contract With America, which is the charge now being leveled by some people. And we hope the President will reconsider his decision and sign it.

MS. FARNSWORTH: Joan Claybrook, the bill does have wide bipartisan support. What's wrong with it, in your view?

JOAN CLAYBROOK, Public Citizen: It also has wide bipartisan opposition, I should point out. What's wrong with this bill is that it would remove law and order for American corporations when they manufacture defective products that harm individuals. The whole purpose of our court system where these cases are litigated, the civil justice system, the envy of the world, by the way, is so that individual consumers can go into state court and to challenge manufacturers when they misbehave. And it's a very potent and powerful capability. It's one of the few things.

MS. FARNSWORTH: They can still do that, though, under this, couldn't they?

MS. CLAYBROOK: But in a much more limited way, and it's so potent because it allows the average consumer to challenge the largest corporation in America. We talk today, particularly the business community talks today about personal responsibility for welfare mothers and yet, here they are fighting to get rid of their own personal responsibility when they manufacture their products, and indeed, that will happen, because the purpose of a civil justice system is to compensate individuals to deter manufacturers from manufacturing unsafe products, to punish those who engage in egregious misconduct, and to provide information to the rest of the consumers and prevent unsafe products from being manufactured.

MS. FARNSWORTH: Okay. Let's go through some of the specifics and let you describe why you think this would remove protections and you describe why you think it wouldn't. The caps on punitive damages.

MS. CLAYBROOK: Well, caps mean that the largest corporations get the most protection, i.e., if you're General Motors and you have billions of dollars of profits every year and a $250,000 cap is applied to you, it's like a fly swat and so they're doing exactly the opposite of what they should do, and what juries do on their own without this interference from the federal government, which is to apply a large reward for a larger corporation.

MS. FARNSWORTH: Okay. Mr. Huard on that.

MR. HUARD: One of the longstanding concepts of anglo saxon jurisprudence is the punishment ought to fit the crime, and the opponents of this bill are constantly talking about the need to punish corporate wrongdoers. I can well imagine in the criminal justice system, the outrage that would occur if you could draw 30 years in prison for jaywalking, and what we're saying is there ought to be some proportionality. There are, indeed, many large compensatory damage awards. Where a compensatory damage award, for instance, of five or ten million dollars is awarded, the punitive damages would be ten or twenty million. And there are many cases of egregious conduct where you get large punitive damage awards. What we're saying here is that if you have a relatively small economic injury, and I will cite the proverbial $400 paint scratch on the BMW, you oughtn't be hit with $21 million in punitive damages. That's just ridiculous. It ends up costing the American consumer a lot of money because people have to build this into the cost of the product.

MS. FARNSWORTH: Ms. Claybrook, what about the compromise that was reached? A judge, if there were really egregious wrongdoing by a company, could go beyond the limitation. Doesn't that provide some of the protection you would want?

MS. CLAYBROOK: No, it really doesn't. And there, there are two defects. The second defect in this punitive damage provision is that it bases it on your, your damages. The way that punitive damages really should be awarded is to look at the conduct of the manufacturer, the size of the manufacturer, how long they knew the product was defective, how many people were injured, whether they resisted taking it off the market, all those are the factors that should be considered and are considered by juries today. This bill prevents that and says, for example, if you're a woman who had a Dalkon Shield and you could no longer have children as a result, you have small economic damages. You can't punish that manufacturer or allow the jury to decide they want to punish that manufacturer for knowingly selling that product, knowing that people wouldn't be able to have children if they used that product. And so the additur provision which you're asking about, which was added to the bill, is very complex and difficult, very, umm, cumbersome and costly and difficult to administer and the manager's report says, in fact, the conference report on this bill, that it's unlikely to be used with great frequency, and, in fact, it's state law where they have it, it's not--there's not use frequently.

MS. FARNSWORTH: Mr. Huard.

MR. HUARD: Well, the fact is, is that the punitive damage cap is not limited to economic damages, and, indeed, if you have a woman who has lost the right to bear children, and the jury chooses to award her $10 million for pain and suffering, which they easily could, the punitive damage cap is $20 million. This is not insignificant. People that are painting this as protection for American corporations--

MS. FARNSWORTH: Because there is no limitation on the pain and suffering.

MR. HUARD: That's correct.

MS. CLAYBROOK: Oh, yes, there is. There is in certain cases.

MR. HUARD: Compensatory damages.

MS. CLAYBROOK: Well, there is, there is in joint and several cases, i.e., in cases where there's more than one defendant, non- economic damages are completely limited. So, in fact, that's not true. There are many tricky things in this highly complex bill which are very difficult for the American public to understand and even very difficult for most lawyers to understand. Indeed, it is a federal overlay, you understand, on state law. Today, these cases are litigated under state law. Now we're going to have a, a federal overlay that's been written by the business community. It's a one- way street just for them. There's nothing in there really for consumers, and that the state courts and juries are going to be limited. They're not going to be able to use their judgment, listen to the evidence and the facts that they hear and make their own judgments.

MS. FARNSWORTH: This is one of the reasons that the President has given for vetoing the law, that there is this federal involvement. What do you think about that?

MR. HUARD: Well, I could only describe that as egregious hypocrisy. You know, this is based on the interstate commerce clause. I can imagine the howls we would hear from Ralph Nader if we said let's let the states determine whether you ought to have air bags in cars or seat belts in cars. Basically, we are talking about products, we are talking about products that move in interstate commerce, and about having uniform standards.

MS. CLAYBROOK: But those aren't uniform. They're a one-way street. They're uniform for the business community. If a state law is more disadvantageous to consumers, this still leaves it alone. If a state law is more advantageous to consumers, it's limited by this bill. This is not a uniform bill.

MS. FARNSWORTH: Okay. Mr. Huard, I want to move on to the whole question of joint liability, which--

MR. HUARD: Sure.

MS. FARNSWORTH: --would be abolished. Tell us why this is important. Explain what is in the law and why you think it's important.

MR. HUARD: Well, again, I've heard the other side here talk about personal responsibility. If you're only 2 percent liable for an injury and the other side was 98 percent liable, in some cases it's going to be the plaintiff. Now, this says if you alter or misuse the product, you remove the safety bars from the equipment, and then you lose a finger, if you're 98 percent responsible for your injury, the other side is 2 percent responsible, they're only going to have to pay 2 percent. Now, in the case of joint and several liability, this is being limited only to non-economic damages, your full loss of wages, your compensatory damages for medical expenses, you can still go to the deep pockets and hit someone who is only 1 percent liable for 100 percent of your economic damages, only in the area which tends to be a little fuzzy-wuzzy, the pain and suffering awards, are they going to say a manufacturer that is 2 percent liable only has to pay 2 percent of the award. Now, if that's not personal responsibility, if that's not reasonable, I don't know why we're here.

MS. FARNSWORTH: What do you think? What is wrong with that, in your view?

MS. CLAYBROOK: Well, first of all, this is really a damages provision, and it was designed by judges in order to have fairness to the consumer. Where there's more than one defendant, it says that whatever defendants are there and that caused the injury-- remember, these all have to be people who caused the injury, all entities that caused the injury--then the consumer must be fully compensated. And if it has to come from one, that's fine; if it can be shared, that's fine. And that's the reason for the rule, and they're denigrating pain and suffering awards and damages by saying, well, in the case of pain and suffering, we dismissed that as being terribly important, and, therefore, you don't get full recovery, and so, again, in the case of someone who loses their reproductive rights, they don't get full recovery where there's more than one defendant, the court's saying.

MS. FARNSWORTH: Do you reject the argument that the supporters of this bill, including Democrats, make, that there needs to be reform of tort law because there have been, there are damages that are given that are way out of proportion to the injury?

MS. CLAYBROOK: I completely reject it, for two reasons. One is the current system has the capacity to deal with that. That's what the appeals courts are all about, the right to a new trial, the decisions by the judges to reduce the award if they think it's egregious.

MS. FARNSWORTH: Okay. Let me stop right there. What about that argument, what's wrong with the way the current system is dealing with it?

MR. HUARD: Well, the current system is loaded against the defendants. What happens is, is products get withdrawn from the market, even though they're valuable products, because companies make a common sense calculation. There was something called Bendectin, an anti-nausea drug. The company's annual profits from that, selling it, were $13 million. Their liability costs were $15 million. They withdrew it from the market.

MS. CLAYBROOK: But lots of them they don't withdraw. And so the issue is first of all does the current system handle it, and the answer is yes, and the second issue is, is there an overload of cases that warrants making some enormous change like this? This is the most massive preemption of state law in the history of the United States.

MS. FARNSWORTH: You don't think the figures are there to show that there's an overload of--

MS. CLAYBROOK: There absolutely is not. The total number of product liability cases is something under 100,000 a year. It's closer to 60,000 a year. The number of punitive damages in the last 25 years is 355. The, the cases themselves are so small compared to all the other cases in the court system the, the insurance for liability has gone down by 40 percent since 1987. The total cost to the liability system is $4 billion, which is what we pay for dog food every year, so this is not an overloaded system.

MS. FARNSWORTH: What about these figures? What about those figures?

MR. HUARD: Well, like a lot of figures, it's hall-full, half- empty. What they don't tell you is how many manufacturers pull products off the market because of litigation. What they don't tell you is how many manufacturers settle for outrageous sums because of the fear of punitive damages.

MS. FARNSWORTH: So those--

MS. CLAYBROOK: That's included in the total of $4 billion. This is from the National Association of Insurance Commissioners who did a calculation of the total cost, the total cost of attorneys' fees and compensation in the liability, in the product liability system.

MS. FARNSWORTH: Okay. In the little time we have left, if the President has said he will veto this bill, does it mean it's dead?

MR. HUARD: Well, it may mean it's dead for this Congress. We certainly, having fought for this for close to 20 years, will come back next year if we have to. We still hope the President will change his mind. I realize that's an uphill fight, so it may well be dead.

MS. FARNSWORTH: What do you think?

MS. CLAYBROOK: It should be dead, and we applaud the President for doing this. These guys have spent hundreds of millions of dollars pushing a bill that in any other situation would have died a natural death because it's not needed, not wanted, and it will harm consumers. But because they have an endless supply of cash to put behind this and pay their lobbyists and give campaign contributions, they just keep pushing the same bill and the members keep pushing it because, you know, the cash rolls in, and they keep doing it.

MS. FARNSWORTH: That's--

MR. HUARD: The trial lawyers are the biggest campaign contributors--

MS. FARNSWORTH: That's all the time we have.

MS. CLAYBROOK: Not compared to the businesses, nothing.

MS. FARNSWORTH: That's all the time we have. Thank you both very much. RECAP

MR. LEHRER: Again, the major stories of this Monday, around-the- clock negotiations failed to end the strike against General Motors' brake plants in Dayton, Ohio. A hundred and forty-two thousand GM workers have been idled. John Salvi was found guilty of murdering two women in a 1994 shooting at two Boston area abortion clinics. He was sentenced to life in prison without parole. And Chinese ships and planes held more military exercises Southwest of Taiwan. They are expected to continue through Taiwan's presidential election on Saturday. And we'll see you tomorrow night with Part 2 of our look at economic security and insecurity, among other things. I'm Jim Lehrer. Thank you and good night.