The NewsHour with Jim Lehrer

MR. LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight, the Washington smash-up that could close down the government. I talk to White House Chief of Staff Panetta, Elizabeth Farnsworth to the Senate Republican Whip Trent Lott. Presidential candidate Lamar Alexander, Margaret Warner does that interview. And turning against authority, David Gergen engages author Nicholas Kittrie. It all follows our summary of the news this Thursday. NEWS SUMMARY

MR. LEHRER: The White House and Congress moved closer today to a big fiscal showdown. The House approved a bill that would extend the government's authority to borrow money, but President Clinton said he would veto it because of various tack-ons he doesn't like. Failure to enact a debt extension could result in defaults on government bonds by Wednesday. Treasury Sec. Robert Rubin warned of serious repercussions.

ROBERT RUBIN, Secretary of Treasury: For over 200 years, America has never defaulted on its debt. Our creditworthiness is an enormously valuable national asset, and it must not be relinquished. Default will call into question the integrity of the United States with respect to meeting our commitments. When you create a question mark about meeting your commitments in the financial marketplace, that has real and serious consequences.

MR. LEHRER: Also at issue is a so-called continuing resolution to keep the federal government running until the budget can be agreed on. The President has promised to veto it too on grounds it also contains unacceptable riders. This impasse could result in the shutdown of the federal government Tuesday. The bill has passed the House and is being debated in the Senate, with a vote expected late tonight. White House Chief of Staff Leon Panetta today accused the Republicans of trying to blackmail the President.

LEON PANETTA, White House Chief of Staff: The President cannot on behalf of the nation allow the Republicans to basically threaten the country into choosing between whether or not we shut down the government or force a default, or accept the cuts that they proposed in Medicare and Medicaid and education and the environment and their proposed tax increases on working families. That is just not a choice that this President is going to accept.

MR. LEHRER: Speaker Newt Gingrich today accused the President of playing games with both measures.

REP. NEWT GINGRICH, Speaker of the House: The Secretary of the Treasury, the director of the budget's major contribution to American well-being has been a failed attempt to frighten the bond market, which has failed totally. And we are, frankly, ignoring all of the gimmicks and all of the public relations of the White House. We're going ahead, we will send over today a debt ceiling. Yesterday we sent over a continuing resolution. The President has already apparently indicated he'll veto both, which I think, he certainly said he'd veto the debt ceiling. I mean, I find it fascinating that the President needs the debt ceiling so desperately he's going to veto it.

MR. LEHRER: We'll have more on all of this right after the News Summary. The administration today released a new report criticizing the Senate Welfare Reform Bill. It warns that as many as one million children will be pushed into poverty. Two months ago, the President was ready to sign the bill. Sen. Joe Lieberman, Democrat of Connecticut, said today the President should not back away now.

SEN. JOSEPH LIEBERMAN, [D] Connecticut: Instead of using the report as a reason to push the President to veto welfare reform, those of us who say we're committed to changing the status quo in welfare should be using the report as a basis for improving the reform bill that came out of the Senate.

MR. LEHRER: Another Democrat, Sen. Daniel Patrick Moynihan of New York, disagreed with Lieberman, saying this new study proved the welfare bill should be vetoed. The United States and its allies agreed today to partially lift the economic embargo against Serbia. They did so in response to a request from the presidents of Bosnia and Serbia. They asked that natural gas supplies from Russia be turned on as a humanitarian exception to the embargo. They are participating in peace talks in Ohio. Sec. of State Christopher will join those talks at Wright-Patterson Air Force Base in Dayton tomorrow. He spoke in Washington today.

WARREN CHRISTOPHER, Secretary of State: I've been following the talks very closely. I think I talked with Amb. Holbrooke three or four times yesterday as we move through this process. It's highly complex. There are a lot of interaction of the personalities there, but, frankly, I'm encouraged by the fact that the parties are talking directly, dealing aggressively with the problems they face. There's a long ways to go yet, but I hope that my presence out there tomorrow may assist the negotiators in making some progress.

MR. LEHRER: The Yugoslav War Crimes Tribunal today indicted three Serb regular army officers. The men are implicated in the mass execution of 261 men on the Croatian border with Serbia in 1991. It's the first time the international court has charged Serbian government officers. Forty-six rebel Serbs have already been accused of war crimes. Israeli police arrested more religious extremists today for the assassination of Prime Minister Rabin. We have a report from Robert Moore of Independent Television News.

ROBERT MOORE, ITN: To the shock of the security forces and ordinary Israelis, the theory of the lone assassin is rapidly disintegrating. Police today brought other Jewish extremists into court, charging them with involvement in the murder of Prime Minister Yitzhak Rabin. Police say the conspirators killed the Israeli leader because they thought it was the only way to destroy the peace process and save biblical Israel. The house and garden of the assassin, Yigal Amir, has been searched, and large quantities of arms, grenades, and explosives uncovered. It has fueled the sense here that Israel's secret service was complacent when it came to combating Jewish terrorism. Security has been dramatically increased around Premier Shimon Peres. When he visited Rabin's widow, he was surrounded by police and bodyguards. Some extremists who have gone into hiding have warned that Peres is their next target.

MR. LEHRER: PLO Chairman Yasser Arafat paid a condolence call to Prime Minister Rabin's widow in Tel Aviv today. It was his first trip to Israel since the Israeli-PLO peace process began. Arafat told Leah Rabin her husband was both a hero of peace and a personal friend. The Nigerian government has upheld a death sentence against a leading human rights activist. The conviction of Ken Saro-Wiwa and eight others has provoked worldwide protest. A White House spokesman in Washington today called on the Nigerian government to commute the death sentences. He said they were a consequence of a greatly flawed judicial process. And that's it for the News Summary tonight. Now it's on to the government shutdown crisis, Lamar Alexander, and a David Gergen dialogue. FOCUS - BUDGET CRUNCH

MR. LEHRER: The great Washington face-down over the budget, the national debt, and closing down the federal government next week is where we go first tonight. Kwame Holman begins our coverage.

MR. HOLMAN: Lawmakers in Washington are fast approaching two critical deadlines. The first is midnight, November 13th, four days from now. That's when the federal government officially runs out of money. The government's 1996 fiscal year began October 1st, but to date, only two of the thirteen spending bills required to fund government operations for the year have been approved by Congress and signed by the President. And so, as in the past, Congress is relying on the so-called continuing resolution, temporary resolution that continues to fund government operations while Congress and the President work out a long-term budget deal. It would be a simple matter if it weren't so political. Congressional Republicans, Democrats, and the President were able to agree quickly on the first continuing resolution, or CR, as it's called, in late September, just before the new fiscal year began.

PRESIDENT CLINTON: [September 1995] That's a good omen for our, our efforts to successfully conclude an effort to balance the budget.

MR. HOLMAN: But agreement on a second CR is proving much more difficult to achieve. That's because the President has since announced his opposition to many of the budget cuts and spending priorities contained in the Republicans' seven year balanced budget plan and has vowed to veto it as soon as it's delivered to him.

REP. BOB LIVINGSTON, Chairman, Appropriations Committee: [Yesterday] I call up HJ Res. 115, a bill making further continuing appropriations for the fiscal year 1996.

MR. HOLMAN: Yesterday, House Republicans responded to the President's veto threat by bringing the new CR to the floor with additional provisions, eliminating six government agencies and setting spending at no more than 60 percent of last year's levels.

REP. BOB LIVINGSTON: Mr. Speaker, this second continuing resolution is necessary to keep a large part of the government operating for a very short period of time. It is restrictive, and it will keep the necessary pressure on both the Congress and the President to work out their differences on the remaining regular bills and get them enacted into law.

MR. HOLMAN: The additional provisions infuriated Democrats.

REP. PATRICIA SCHROEDER, [D] Colorado: This is unbelievable. Here we are, 39 days after we were supposed to have this done, we're nowhere close to done, government is hanging by its fingernails, and they want all these special things that they can't get the front door way through the back door.

REP. STENY HOYER, [D] Maryland: This is a blatant, irresponsible attempt to bulldoze the President of the United States into signing something that he vigorously disagrees and he will not do it.

MR. HOLMAN: Republicans, however, tried to make it sound like business as usual.

REP. PORTER GOSS, [R] Florida: Mr. Speaker, Congress faces a simple choice. Pass this limited extension of the CR, or allow a partial and a necessary shutdown of the federal government. It's an easy choice. The clear and responsible path is to approve this measure and get on with our pressing business.

MR. HOLMAN: The House approved the continuing resolution which would keep the government operating through December 1st, but this morning, White House Press Sec. Mike McCurry said like the Republican budget, the new CR is unacceptable to the President and said he'll veto it even if it means the government shuts down.

MIKE McCURRY, White House Press Secretary: They are one way or another trying to force the President to accept their priorities on the budget, and the President will not accept it.

MR. HOLMAN: But a brief shutdown of the government would pale in comparison to the financial catastrophe some are predicting if the debt ceiling isn't extended. It allows the government to borrow more money and make good on its next interest payment. That deadline is November 15th, less than a week away.

SPOKESMAN: The committee meets today to consider HR 2586, a bill to temporarily extend the debt ceiling.

MR. HOLMAN: But on Tuesday, as the House Ways & Means Committee met to write legislation elevating the debt ceiling, Republicans threatened add-ons to that bill as well, sure to attract another Presidential veto.

REP. CHARLES RANGEL, [D] New York: [Tuesday] I think it's fair play when you have the majority to do what you have to do. But for God's sake, think about what you're doing to the Constitution when you take these legislative tools and you have the votes, and you put a political gun to the President's head and say that the whole pile of cards in terms of what has taken years for us to build, in terms of credibility, and that's what our republic stands for in every country throughout the world, we pay our debts.

REP. BILL ARCHER, Chairman, Ways and Means Committee: We are here today precisely to do the reverse of jeopardizing the full faith and credit of this country. On November the 15th, if we don't act today, this country will not be able to sell the securities necessary for it to be able to pay its bills. We are here to try to expedite that and to see that the business is conducted on an orderly basis.

MR. HOLMAN: The Republicans' bill extending the debt ceiling arrived on the House floor today, with its controversial add-ons. Republicans say the budget-cutting add-ons give them leverage in negotiating an overall budget deal with the White House.

REP. SCOTT McINNIS, [R] Colorado: But talk about the habeas corpus reform, Americans all across this country are crying for reform in death penalty cases in this country. We're not going to get it otherwise. You've got to go into your negotiations with strength.

MR. HOLMAN: Democrats countered the add-ons really are designed to get reluctant Republicans to vote to raise the debt ceiling.

REP. SAM GIBBONS, [D] Florida: Our constituents want to know what bribery looks like. This is a picture of it, right here, these 400 pages. Who are they trying to bribe? They're trying to bribe their own Republican members of voting for two lines. Strike out figure for the debt ceiling and insert a new figure, and all the rest of this bill is pure bribery, nothing else.

MR. HOLMAN: As expected, the debt ceiling, with its add-ons, was approved by the House. Attention now turns to the Senate, where action on both the debt ceiling and the continuing resolution began today. There, may lie the last hope of averting a government shut- down and an unprecedented default on its debt. NEWSMAKER

MR. LEHRER: Now, to back-to-back interviews with principal players in the story, beginning with White House Chief of Staff Leon Panetta. Mr. Panetta, welcome.

LEON PANETTA, White House Chief of Staff: Jim, nice to be with you.

MR. LEHRER: So, the President is not going to sign any of these versions, and neither one of these issues as now written, is that correct?

MR. PANETTA: That's correct. We've indicated that the President would veto the continuing resolution as it passed the House, and he would veto the debt ceiling extension as it passed the House, because of their efforts to include elements of their budget which are unacceptable to the President. The President has basically said, I'm not going to be blackmailed between choosing whether or not we shut down the government or create a default and choosing priorities like cutting Medicare, Medicaid, and some of the other elements of the Republican budget. He just can't--he cannot accept that position from the Republicans.

MR. LEHRER: It's not negotiable?

MR. PANETTA: That, that is not negotiable with regards to what we should do on the debt ceiling. The President's made clear to the leadership, look, let's do what's responsible here. Let's remove the issue of default of the federal government outside of the issue of differences over where we should go with the budget; let's protect the full faith and credit of the United States; let's not raise the issue of default; let's not use the debt ceiling to put all other kinds of issues on in order to force me into making these choices; let's just do that clean. Let's pass a clean extension of a continuing resolution so that we can keep the government going, and then, you know, if there's a discussion to be made on differences with regard to the budget, that's the time to do it. But you cannot do this in an atmosphere in which the Republicans are basically saying to the President, you've got a choice here, Mr. President, you can either bring down the government, stop it, bring down the economy by not--by having a default, or you've got to accept our priorities with regards to Medicare, Medicaid, education cuts, environment cuts, and tax cuts. I mean, it makes no sense. This President is not, nor should any President, frankly, Republican or Democrat, be put in the position where that kind of blackmail can prevail. You just cannot do that.

MR. LEHRER: Blackmail is a word you've used a couple of times today. You also used the word terrorism. Is it that serious a matter?

MR. PANETTA: Well, the problem is this. The problem is when--when a party that is in power in the Congress is saying to the President and saying to the country, we frankly--we can't get our issues across openly and in a full debate in terms of bringing our issues to the American people--after all, that's the way you get things done in our process. If you believe deeply in their particular budget priorities, bring those issues to the American people, debate them openly. Let's talk about those issues. That's the way it's done here in Washington. But instead, because obviously, the American people do not support the direction that they're taking- -and it's obvious every day in terms of how the American people are responding to the Medicare cuts, the deep Medicaid cuts, cuts in education, particularly on student loans, the whole issue of tax increases on working families, this is not acceptable in terms of the American people. So what do you do when you're in that situation? Then you start to resort to threats, and that's exactly what they're saying here. They're basically threatening the President and the country by saying we will force a default, we will force a shutdown in the federal government if you do not accept our priorities. And that's where we are. Very frankly, it's economic terrorism, and that's unacceptable.

MR. LEHRER: Let's take these things one at a time. What would be the impact of the failure to raise the debt limit ceiling?

MR. PANETTA: Well--

MR. LEHRER: The default--in other words, the default issue.

MR. PANETTA: Right. If you don't do it. And I think everybody needs to understand that the reason you're doing that is so that you can pay the bills that have already been incurred. This is not a question of incurring new debt. This is a question of paying the bills that the United States has already incurred and that the Congress has basically appropriated and approved in legislation, so that's the issue. If you, in fact, fail to increase the debt ceiling to allow us to pay our bills and force the United States into a default, then clearly what will happen is the United States will not be able to meet its bills. That will obviously have an impact in terms of interest rates.

MR. LEHRER: They'll go up?

MR. PANETTA: Obviously, there will be an impact on interest rates that will go up because we have failed to meet our debts, and, therefore, in order to be able to in any way have any kind of credit, we'll have to increase interest rates. That'll increase deficits. Variable interest rates, which are tied to Treasury bill rates, will also go up. That affects millions of people who have mortgages with variable interest rates. It's also going to affect obviously some retirement plans that are related to those kinds of variable rates.Beyond that, obviously, the signal that we send to the world and to the markets that we have not able to meet our full faith and credit, I think, is a disaster. And so--and that's a bill, incidentally. What happens when you fail to do that is not something that just impacts tomorrow and the day after tomorrow or next month. It's something that you're going to have to pay a bill on for the next twenty years, because people are going to say once the United States has, in fact, defaulted, then our credit has been seriously damaged in the world.

MR. LEHRER: And then that would be worse than--you would agree then that would be worse than the other part of this equation, which would be the shutdown of the government Tuesday if that continuing resolution is not enacted, correct?

MR. PANETTA: I think that's fair to say, Jim.

MR. LEHRER: That is what, 800,000 federal employees have been furloughed, offices, various offices, various federal facilities would be closed down till it was resolved?

MR. PANETTA: Yes. What you have to do is once, once you run out of your legal appropriations--and, again, what I would point out is the reason we're here is because the Congress has not completed all of their work on appropriations bills. There's only two bills that the President has signed out of thirteen. They have not sent these bills down to the White House, have not completed their work, which is all supposed to be done by October 1. As I might point out, all of the bills were passed by October 1 in the last session of Congress. That's not happened. So, obviously, if you run out and you don't have your appropriations, you're required under law to essentially shut down, and a number of agencies will be required to do that. There are some that are exempted by virtue of the mission they perform, which is important either to our national security or important to property or life, but generally, what you will see is about 800,000 employees who will be furloughed. There will be offices that will be closed down. The Social Security claims--for example, anyone who turns 65 and wants to file for Social Security, that claim will not be able to be processed. The same thing is true with regards to veterans' claims. You will see a gradual shutting down of offices as we begin to run lower and lower in terms of appropriations.

MR. LEHRER: And it's the President's view that those, those consequences of these two issues do not outweigh his position on the budget? In other words, the veto is still more important than those two issues?

MR. PANETTA: The President--the President deeply believes that the budget issues that he's confronting are fundamental in terms of the direction of this country, and that there are very fundamental differences here between where the Republicans want to take the country and where this President wants to take the country. Their budget, as I said, basically makes major cuts in Medicare, takes almost $180 billion out of the Medicaid system, having a tremendous impact in terms of people and the elderly who rely on Medicaid. It takes almost $36 billion out of education. It cuts many of the funds that support environmental efforts, and in particular, it raises taxes on working families about $148 billion. Now, the President just doesn't believe that's what we ought to do in terms of balancing the budget. He's got a balanced budget proposal. It protects Medicare, protects Medicaid, does not raise taxes on working families, keeps our investment in education. For goodness sakes, if we care about where this country is going, let's keepit in the right place. We've got a strong economy right now. This economy is doing very well. We're producing a lot of jobs. We did a $500 billion deficit reduction package that is working for this country. It's reducing the deficit. That's what we ought to continue to do.

MR. LEHRER: Are you and the President concerned at all, Mr. Panetta, about what this looks like or may look like to the American people, that they look in Washington and they see that the President and the Congress are allowing all of these terrible things, could allow these terrible things to happen on Tuesday, Wednesday, and Thursday of next week, that it confirms their worst thoughts, according to the polls, that they already have about their government in Washington?

MR. PANETTA: Well, there is no question, Jim, that there are people that look at Washington with a large degree of cynicism as to what happens in this town, and that's understandable. But they also understand that there are some major decisions involved here with regards to the budget. The budget is not just a numbers game. It is about people, and it is about priorities, and it's where this President wants to take the country, or where Newt Gingrich wants to take the country. That's the choice. The President feels very deeply that, you know, if those differences--we want to debate those differences, and we want to decide those differences, then that's fine. Let's do it in the context of a debate on the budget, but for goodness sakes, don't say to the President of the United States and the people of this country that you are either going to have to face a default or a shutting down of the federal government, or you have to accept our priorities. That is not a legitimate choice that this President or any President ought to accept.

MR. LEHRER: All right, Mr. Panetta, thank you very much.

MR. PANETTA: Thank you, Jim. NEWSMAKER

MR. LEHRER: Now, Elizabeth Farnsworth is ready to pursue the other side of this argument.

MS. FARNSWORTH: Joining me now with the Republican view of the budget and debt stand-off is Sen. Trent Lott of Mississippi, who's No. 2 in the Senate Republican leadership. Thank you for being with us, Sen. Lott.

SEN. TRENT LOTT, Majority Whip: [Capitol Hill] Thank you, Elizabeth.

MS. FARNSWORTH: You heard Mr. Panetta say that this is economic terrorism, that you're threatening the President and the country, saying that you'll force a default if they don't accept your priorities. What do you think about that?

SEN. LOTT: I listened to the remarks and, you know, if it wasn't so inaccurate, it would be almost laughable. First of all, what Mr. Panetta and the President are advocating is the status quo. They don't want to change anything. They expect the Congress to just vote to raise the national debt, over $5 trillion, without any actions on controlling spending and reducing the size of government, reducing regulatory burden on the American people. They want everything to be the way it was. And in addition to that, they're not even engaged. The President--I don't know what he's doing, or where he is. I do know that he flew 26 hours on an airplane with the leaders of Congress earlier this week to the unfortunate situation there in Jerusalem where you had the services for Prime Minister Rabin, and the President never once discussed this looming situation with the leaders of Congress. He didn't talk about the debt ceiling, the continuing resolution, and so they've got to also realize that the Congress has a job to do. We have to vote. We have to get the votes to pass legislation in the House and in the Senate, and then we either agree between the two or go to Conference to work out the disagreements, and then it goes to the President. The President is the one that by the stroke of his pen will keep the government operating or shut it down. We are going to fulfill our role to pass legislation through the Congress that would provide for the continuing resolution for the Appropriations bills for the government, and for a temporary, only a temporary, debt ceiling increase. It's on his back if he vetoes that.

MS. FARNSWORTH: But, Senator, what about Mr. Panetta said? He said, let's remove the issue of default of the federal government from all these other issues. Why not do that?

SEN. LOTT: There is no issue of default if the President signs it. And let me tell you what he's objecting to. What we put on this temporary debt ceiling increase are some requirements that really directly relate to the debt ceiling increase. No. 1 is that we have a balanced budget in seven years. Members of Congress are not going to vote for business as usual. They're going to say before we get even a temporary debt ceiling increase, we're going to have language in there that says there must be a balanced budget in seven years. We're also putting language in there that says, Mr. President, you can't raid the Social Security Trust Fund or pension plans and move that money around so that you can keep the government operating after you, in effect, veto the debt ceiling increase that we're going to send you. We also say that after this temporary debt is reached, it will bounce back down to the permanent level. I mean, these things all directly relate to the debt ceiling. As far as eliminating a department of government, the Department of Commerce, you know, we can eliminate the Department of Commerce, move its important functions to other existing agencies and departments, save money, and Congress feels that this is directly related to beginning to get a control on the ever-escalating national debt. The American people realize that a $5 trillion national debt is something we cannot continue to allow to grow out of control. Congress is trying to deal with that. It would be nice if the President would join in.

MS. FARNSWORTH: It sounds like the Senate bill may look a lot like the House bill. I had read that, for example, that Sen. Dole has said perhaps the provision in the House that would end the Commerce--close down the Commerce Department might not end up being in the Senate bill, but it sounds like you would support that.

SEN. LOTT: I would personally support that. We have not had a vote in the Senate yet. It will be--I'm sure--discussed, and I don't know exactly that's going to turn out, but there are some other provisions that have been added on, like the ones I mentioned, that clearly will be on there, regulatory reform. The American people support overwhelmingly trying to get a control of all the regulatory and rule burdens on individuals, on small businesses, on farmers. They want it desperately, and it directly relates to the national debt. If we could reduce the burden of regulations on the American economy, we would have more jobs, we would have more growth, and it would directly relate to controlling the debt. So I do think that some of the add-ons that are being included by the House will be accepted by the Senate. I hope so. And then we work out the differences between the two bodies, if there are any, it goes to the President. He has to make a call. But keep in mind this is a temporary debt ceiling. It's--even if he disagrees, we will have, you know, the permanent debt ceiling will come due on December the, I think it's the 12th. There will be another opportunity for him to express his concerns. It would be nice if he would join in the discussion, instead of speaking through the news media, through televisions, through Leon Panetta. Why isn't the President of the United States engaged in this issue or these issues? They're very important to the future of our country, our children's future, controlling interest rates, and I think that they're just using their, their rhetoric, and that's all they used last month is rhetoric. They have not been engaged in discussions to try to work out the disagreements with the Congress at all. And let me tell you, I know that personally for sure, because I have tried to talk to 'em over a period of months. And for the last three weeks, it's been like a tomb, nothing. They're not engaged. They're just standing over there saying, oh, if you don't do it our way, we're going to veto it and shut down the government.

MS. FARNSWORTH: Senator--

SEN. LOTT: Well, they're going to have that opportunity.

MS. FARNSWORTH: You heard Mr. Panetta describe what he thought the consequences would be of not raising the debt ceiling. He talked about this having an impact for 20 years. What do you think about that? Do you think the consequences would be as significant? Because from what you say, if there are add-ons in the bill that the Senate approves, we're going to have high noon here, we're not going to have a resolution to this conflict.

SEN. LOTT: High noon is not necessary. We could avoid it. We could have some communication with him, and he can sign it, and there won't be high noon. There'll be time to work it out.

MS. FARNSWORTH: But let's say there is high noon. Do you think the consequences would be that extreme?

SEN. LOTT: Mr. Panetta needs to remember that Halloween is over. Scare tactics don't work this week. Look, we have had confrontations between--he was in the Congress--he of all people knows better than to say the things he just said. We've had situations in the past where the Congress and the Presidents didn't agree on the debt ceiling, and you had a temporary breach of that debt ceiling, 11 days one time, I think, back in the late 80's. The government didn't go into chaos. In fact, the markets continued to go up. One other thing, Mr. Panetta talked about all these add-ons- -that's not the way it's done. I researched the record back to 1984, many years when Leon Panetta was chairman of the Budget Committee, and every year, every year, the Democratically- controlled Congress had add-ons anywhere from one or two to as many as six or seven. And I mean, really big, substantive add-ons. He's not being truthful on what the past has been or what the impact will be. There will not be this big impact on the markets. In fact, the markets will react positively because they will say, gee, the Congress is serious about getting federal spending and regulations under control, and they will believe then that we're convinced about getting a balanced budget over seven years, and in fact, there probably will be a positive reaction. He knows that. He's being--to put it charitably--disingenuous in what he's said.

MS. FARNSWORTH: Senator, are you worried that this is going to increase skepticism in the body politic about what happens in Washington? The polls show that people are, are--they very much want there to be bipartisan cooperation.

SEN. LOTT: I'm an advocate of that. This is not necessary. The President needs to be involved in working with the Congress. He is not. He doesn't need to veto those bills; he should not. I think the important thing for us to do is to fulfill our commitments to get a balanced budget, to get genuine Medicare reform that preserves and protects for the future genuine welfare reform, tax cuts that provide tax fairness, and some growth in the economy. We can work with the President. We can get that job done. If we will do those four things and work together between the Congress and the President, the country will benefit, and there will be plenty of benefits politically to go around for everybody. That's what we should do. It's not happening because the Congress, which would work with the President, hears nothing from the White House. There is no communication from the White House or the President. He's in a full campaign mode. That's all. He's checking the poll numbers every day. He is not serious about dealing with the substance of the issues that he says he supports and the American people want. So I don't think that this is good for the country. I think it would be better if we worked together. It surely would help if the President would join in the exercise.

MS. FARNSWORTH: Sen. Lott, thanks for being with us.

SEN. LOTT: Thank you.

MR. LEHRER: Still to come on the NewsHour tonight, Lamar Alexander and a Gergen dialogue. SERIES - THE CANDIDATES

MR. LEHRER: Now another in our series of interviews with Republican Presidential candidates. Lamar Alexander is the candidate. Margaret Warner is the interviewer.

MS. WARNER: Lamar Alexander is the former Education Secretary from Tennessee who now wants to abolish the cabinet department he once led. He was born 55 years ago in Maryville, Tennessee. He graduated from Vanderbilt University in 1962, and then received his law degree from New York University. In 1967, he joined Tennessee Senator Howard Baker's Washington staff for two years, then moved to the Nixon White House Office of Congressional Relations. In 1970, Alexander returned to Tennessee to practice law. Four years later, he ran for governor but lost. In 1978, Alexander was elected governor and served for two terms. He then became president of the University of Tennessee and co-founded a corporate child care company with his wife. In 1991, he went back to Washington for two years as President George Bush's Secretary of Education. I talked with him in Nashville on Monday, before Colin Powell dropped out of the Republican race.

MS. WARNER: Well, Governor, thanks for being with us. You've lived in Washington. You now call Washington obnoxious and irrelevant. Why do you want to go there as President?

LAMAR ALEXANDER, Republican Presidential Candidate: Well, I want to--I want to persuade this country we need less of Washington and more of ourselves. I love Washington, D.C., I love this country, but I think over the last hundred years we've built up would I call an arrogant empire, people who think the rest of us are too stupid to make our own decisions. We've begun to solve a lot of problems there that we can't solve there. Primarily, we need to change 100 years of thinking, where we try to extend the promise of American life by moving things to Washington, and let's move it the other way, less of Washington, more from ourselves.

MS. WARNER: Well, now, what you're saying sounds a lot like what the Republicans who are running Congress are already saying. Are you saying you go farther than they are?

LAMAR ALEXANDER: Yes, I would in some ways. They--their welfare bill, for example, has 800 pages of Republican rules. It defines work for us here in Tennessee. It tells us what to do about teenage girls having babies as if we didn't know what to do. If I were there, I'd hand it right back to Sen. Dole and Speaker Gingrich and say, look, they sent us here not to replace their arrogant empire with ours, but to move it out of here, send it home. I think, I think we need a Republican President from the real world to remind ourselves sometimes of what we need to do.

MS. WARNER: Overall objective as President would be to send a lot of programs back to the states. What is left for a President to do? You spoke in general terms. Give me an idea of the three things you first do to becoming President.

LAMAR ALEXANDER: The first thing I'd do is to check to make sure the budget would be balanced, and then I wouldn't count that, because I don't think--I don't think Presidents should get an award for balancing the budget any more than a boy scout should get a merit badge for telling the truth. So after I checked to make sure that the budget was balanced, it would be to create an environment for job growth, steady stream of good, new jobs. Second would be to give us more freedom from Washington to make our own decisions; move most of law enforcement, all of elementary and secondary education, all of welfare, most job training, out of Washington. And third, would be telling the truth about personal responsibility, saying to us in this country that there are some things that the President can't fix and we must do those ourselves.

MS. WARNER: It sounds like what you're saying the only active role--and I take what you mean about the bully pulpit, the third point--but the only active thing you think a President is there to do is create an environment for job growth, is that right?

LAMAR ALEXANDER: Well, there are other things to do, strong America. There's plenty for a commander-in-chief to do. That'll take half, half the time. Help our schools be as good as our colleges, and balance the budget, as I mentioned. But I think it's active not just to grow jobs but to move decisions out of Washington. In order to persuade even a Republican Congress to end Washington, D.C.'s participation in welfare would take a huge effort by the next President. I mean, all we've gotten so far is 800 pages of Republican rules to replace those, those Democratic.

MS. WARNER: All right. Now, you've been a governor. Do you think all the states are ready for all of these responsibilities?

LAMAR ALEXANDER: The answer is yes to that. Some are more ready than others, but the states will compete. I remember going to governors' conferences. We didn't compete to see who could have the worst roads and the worst schools and the highest infant mortality rate. We competed to see who would have the best roads and the best schools and the lowest infant mortality rate.

MS. WARNER: But do you think that something has happened to the culture of state governments, people who run states, now, as compared to say in the 60's, when, in effect, the federal government felt it had to step in because schools were segregated and terrible for young black students? There was no decent infrastructure. The environment was a mess in all of these states. I mean, what's happened in the last 30 years that makes you think state governments are now really ready to step up to all these responsibilities?

LAMAR ALEXANDER: Well, one thing is state governments are stronger. The second thing is that in all of our enthusiasm to solve more from Washington, we've put too much up there. And the third thing is we're in a different world. We're in the computer age. Everybody is getting rid of central decision-making. If I walk into the largest women's hospital in Detroit and 30 percent of the babies are born already exposed to cocaine because their mothers are, which is the case, we're not going to solve that in Washington. That's a matter of personal responsibility. And the only way we can deal with these issues is less from Washington and more from ourselves.

MS. WARNER: You've made a great point of the fact that you are not a Washington insider. You have had three different Washington jobs. You were governor of the state of Tennessee in-between those jobs. Do you think that's stretching your resume a little bit to call yourself "an outsider?"

LAMAR ALEXANDER: No. I'm telling the truth when I say I'm not one of them. I'm not a Washington insider. I've been there for five years. I'm very proud of that. I worked for two Presidents, and I think that makes sure that if I go back, I won't get skinned. And you might say I've been there long enough to get vaccinated but not infected. But I came home, and my background is outside Washington. I live in Nashville. I've been a governor, a university professor. I've helped to start a business that has 1200 employees.

MS. WARNER: Okay. But three of the last four Presidents the American people have elected have, in fact, been outsiders, former governors like yourself, President Carter, President Reagan, and then President Clinton, and, I mean, that, by your own admission, that didn't change the culture of Washington much. What makes an outsider any--really different from an insider in terms of what they can accomplish?

LAMAR ALEXANDER: Well, first, we have a Republican Congress. Second, we have a country that's ready for it. And third, I don't think anybody thinks that Sen. Dole, for example, who's been there since 1960, is going to change Washington, D.C.; he's king of Washington, D.C.. He's not going to change it. He's the best chief legislator we've got in the Senate, but we're not electing a chief legislator.

MS. WARNER: Now, when you came back here to run for governor, you railed against Washington at the time, and then about ten or eleven years later, when President Bush asked you to be Secretary of Education, you went back. Why?

LAMAR ALEXANDER: Well, I was taught, and I think it's good--a good lesson that if the President of the United States asks you to do something personally, you ought to do it. Plus, education is the most important thing in our future, I believe, and I thought the President was determined to try to change our schools. And what I did when I got there was try to move decisions out of Washington, to give parents more choices with schools.

MS. WARNER: You call now for the abolishment of the Department of Education. By your own admission, you did not, when you came to Washington to be Secretary of Education, say to the President, hey, you ought to abolish this job.

LAMAR ALEXANDER: No, I didn't. I mean, we couldn't even get the Democratic Congress to give a thousand poor kids a chance to go to a good school. I went in 1981, when I was governor, to President Reagan, I and a couple of other governors, and asked him if he would get Washington totally out of elementary and secondary education, and abolish the department, give it all to us, because we felt like we could do more without Washington standing all over us, and he agreed with that, couldn't get it done. It would have been a waste of time for President Bush to try to do it.

MS. WARNER: All right. Let me ask you about another issue that seems to be occupying a lot of your rivals and your party, and that has to do with the influence of social conservatives and the Christian right in the party. Sen. Specter and others are saying there's too much influence. Where do you stand on this whole issue?

LAMAR ALEXANDER: Well, I stand where I stand. What I've learned to do is to say what I believe. Where do I want the country to go? Talk about job growth and more freedom from Washington and personal responsibility and make sure I say the same thing at the Christian Coalition meeting that I say at some other meeting. The Christian Coalition doesn't scare me, doesn't bother me, doesn't concern me. I like having their energy in our party. The main interest of most members of the Christian Coalition is the breakdown of the family. I think that's our biggest problem, and if the whole country was as concerned and active in issues of the family as members of the Christian Coalition are, we'd probably be better off as a country.

MS. WARNER: And do you support, for instance, the Contract with the American Family that the Christian Coalition is asking the Republican Congress to pass now?

LAMAR ALEXANDER: Some of it I do. I have my own agenda. I try not to adopt other agendas. Some I do, some I don't.

MS. WARNER: Carol Long from the National Right to Life Committee has said, though you call yourself pro-life, she and others can't figure out really where you are on abortion. What is your position on abortion, and what would you promote as President on the abortion issue?

LAMAR ALEXANDER: Well, my belief is this: 1.5 million abortions is a tragic number in this country. I think it is wrong. And I consider myself pro-life. I believe states have the right to restrict abortion, and that the government in Washington should stay entirely out of it. I don't think federal laws reduce the number of abortions or reduce the number of guns in schools or help children get educated. I think we need less of Washington and more from ourselves.

MS. WARNER: So do you support, for instance, a constitutional amendment to overturn Roe V. Wade?

LAMAR ALEXANDER: I do not, because I do not think Congress should take its time trying to persuade this country, which it won't do for the foreseeable future, to overturn that law by constitutional amendment. I think, instead, the pro-life effort should be on state restrictions and on persuading us and our own families and our own neighborhoods to reduce the number of abortions.

MS. WARNER: Finally, let me ask you a bit about the campaign. You have been fairly successful in raising money. You've also spent, I think, $8 million, more than anyone except Sen. Dole or Sen. Gramm. Are you where you hoped to be in terms of voter response at this point?

LAMAR ALEXANDER: Well, of course, I'd like to have more, but for a candidate from outside Washington, I'm right on track. Where people know me, which is in Tennessee and in the first three contests, Florida convention, the Iowa caucus, the New Hampshire primary, I'm moving up very rapidly. What I'm finding is that as people look at Sen. Dole and the other Senators, they may respect them as a Senator, but they don't think of them as having the vision to be the first President of the next century, which is what we're electing. So we paid for all of our campaign for '95. We've raised enough money to do that. We'll have several million in the bank on the beginning of '96. I think the race will come down to Sen. Dole and me. That's not a bad choice for our party, or for our country. We're just very different.

MS. WARNER: Well, thank you, Governor. Thanks very much.

LAMAR ALEXANDER: Thank you.

MS. WARNER: Lamar Alexander told me today that Colin Powell's decision not to run for President "will be a big break for me." DIALOGUE

MR. LEHRER: Finally tonight, a Gergen dialogue. David Gergen, editor-at-large at "U.S. News & World Report," engages Nicholas Kittrie, a law professor at American University, author of The War Against Authority: From the Crisis of Legitimacy to a New Social Contract.

DAVID GERGEN, U.S. News & World Report: Dr. Kittrie, let me recall for you a series of recent events in the news: the Oklahoma City bombing, the Unabomber, attacks on trains in the United States, France, and Japan, the near break-up of Canada, public collapse of the confidence in the new government in France, and now the assassination of Mr. Rabin in Israel. Many would say that these events are unrelated, random events. You, on the other hand, say that they're connected by a dotted line. Could you explain that?

NICHOLAS KITTRIE, Author, War Against Authority: Well, the basic conclusion I draw, having observed these events in recent times and having observed similar events over the past 20 years is that the world, the world as we know it, both developing countries and developed countries, are, indeed, facing a crisis of confidence in government, in government, in figures of authority. People, indeed, look around, and they do not feel confident in the forces that rule those countries and this lack of confidence also produces some extreme manifestations of outright violence and rebellion against various forms of authority. And I think this has happened at each one of these examples that you have given us.

MR. GERGEN: If you talked to our ancestors, they'd say this is perverse. After all, over the last hundred and fifty years or so, we built a democracy in many of these countries, and the standard of living is much higher. Why now? What's going on?

NICHOLAS KITTRIE: Well, let's start out with the model of democracy, the United States. When DeTocqueville visited the United States 150 years ago, he wrote, and he was very much taken with it, that unlike Europe, where people observe the law only reluctantly, you need police officers in every corner and all that, he says, in the United States, there seems to be a consensus that this government is a government which the people want, in which they participated, and as kind of a natural acceptance of government. And then he voiced his concern. He said, ah, but this audience that is observing the law in the United States has been a very exclusive audience. He says the American Constitution, the social contract in the United States excluded native Americans, black, and women. He says one of these days they are going to become restless. And he was concerned how fast will we include them, what will it take to have those elements feel part of the social contract. That's the American situation. If you look at other countries, if you look at other countries, the end of the Cold War, but many similar developments have basically exposed the world to a lot of problems that have already been existing. For example, most of us will talk about France or England or Germany, saying, this is a nation state, the notion being each state has one nation. But the nation state is a myth. Most, most states are not made up of one nation. They are made up of different religious, ethnic, tribal communities, and as long as, as long as there were external enemies that each of these nations or each of these states have to face, they stuck together. The end of the Cold War, I think, is one of the main reasons that unleashed this internal anxiety, this internal dissatisfaction, this internal desire to be heard and to play a role, to be included.

MR. GERGEN: In the United States some would say we went through a wave of anti-governmental activity back in the late 60's; there were many demonstrations against the war, on civil rights, on environmental issues, on women's rights, and other things like that. Is this fundamentally different, what we're seeing in the 90's, from what we saw in the late 60's in the states?

NICHOLAS KITTRIE: I think it is different. I think it's different in the sense that at that time it was really symptomatic of some very, very particularly pressing issues. I think what we are seeing, the phenomena in America and worldwide which my book deals with, is what I describe as a crisis of legitimacy, a crisis of authority, where indeed because of alienation of people from institutions of authority, alienation from the family, you go and study elsewhere, you live far away, you are no longer willing to take your parents' admonition that you should follow.

MR. GERGEN: Alienation from the Church.

NICHOLAS KITTRIE: Alienation from the Church, because the Church, many people feel, I'm still a member of this church but I don't like the spokesman, I don't like their doctrine, and then there's a growing alienation from the state primarily in part I think because the state is just finding it increasingly difficult to deliver to the variety of groups and the state, indeed, the state is under great pressure by all kind of groups that want very quickly to get asserted and get recognition.

MR. GERGEN: Prof. Sam Huntington of Harvard would argue that, in fact, over the last fifty or sixty years we've piled more and more requirements on the state and that when the state was in a period say of the Second World War, it could protect us and we respected the state, and that twenty-five years after the Second World War, we had a lot of economic growth which was widely shared in the populations, and, again, the state was respected, but in the last twenty years or so as that economic growth has slowed down, as people's lives have become more difficult, now our expectations are sky high about what the state could deliver to us. But the state is unable to deliver and meet all of our expectations, and, therefore, this gap is causing a loss of respect.

NICHOLAS KITTRIE: Well, I will agree that the social, economic, political demands on the state have changed. I would argue, indeed, a part of this crisis of legitimacy is also due to the fact that some people expect or different people expect different things from the state. Some expect the state to stay out. Some expect the state to bring social equality. So I mean, if you look at the basic premises, let's say, of the American Declaration of Independence, I mean, we are here for life, liberty, and pursuit of happiness. Or if you look at the French Declaration on the right of men after the French Revolution, they want you also to give fraternity and egality or equality. That's a tremendous burden, so in a way, in a way, there's also a disagreement between different people as to what kind of a state they want and yet at the same time there's a piling up of a lot of expectations. But, you know, if I may just add one more thing, on that issue, on that issue, I really buy-- the book does--it's amazing--200 years later, I do buy much of the writings of the founding fathers, especially Jefferson, about decentralized government that allows different communities to govern themselves, manage themselves in a variety--not necessarily of exactly the same way.

MR. GERGEN: Let me come back to that in a moment, but I want to ask you more about the future, and that is, what you would foresee with the end of the century coming, or what you would foresee now in the years ahead.

NICHOLAS KITTRIE: I see a tremendous amount of domestic dissension in all countries.

MR. GERGEN: Countries all over the world?

NICHOLAS KITTRIE: All of them.

MR. GERGEN: Including the United States?

NICHOLAS KITTRIE: Including the United States. Those countries which are not nation states, which are really nations, and which are states gerrymandered by some external forces, including, including Yugoslavia, that was kind of brought together because it was nice to have a country together. In those countries, different components of those states are going to be trying to reassert each other. As far as the United States is concerned, my sense is that the nature of America has been changing dramatically between migration, the change in the composition of who comes here, has really created a new reality; the partners for the American social contract have changed.

MR. GERGEN: But in a nutshell, what do you need to do about it?

NICHOLAS KITTRIE: What you do need to do is greater dialogue, greater effort. My own sense is there is no group that should not be conversed with in a pluralistic society, in a democratic society, where we try and expand our social contract, religious communities and elements could live very peacefully, just the way Mennonites live here, the way, indeed, religious orthodox Jews live in Israel.

MR. GERGEN: Diversity--

NICHOLAS KITTRIE: Diversity implemented.

MR. GERGEN: --protects--

NICHOLAS KITTRIE: Implemented, and it protects--it protects the rights of everybody.

MR. GERGEN: Thank you. RECAP

MR. LEHRER: Again, the major stories of this Thursday, the House passed the debt limit bill tonight. It will extend the government's borrowing authority until mid-December. It now goes to the Senate, where members debated a stop gap spending bill. It will keep the government funded until December 1st. President Clinton has said he will veto both bills. We'll see you tomorrow night with Shields & Gigot, among other things. I'm Jim Lehrer. Thank you and good night.