The MacNeil/Lehrer NewsHour

MS. WARNER: Good evening. I'm Margaret Warner in Washington.

MR. MAC NEIL: And I'm Robert MacNeil in New York. After our summary of the day's top stories, we have a report on the battle to save the crime bill in Congress, then political analysis for the week by Paul Gigot and David Broder. Correspondent Elizabeth Farnsworth reports from Haiti on the effects of the economic embargo, and preparations for possible invasion. Finally, Business Correspondent Paul Solman looks at the business behind the baseball strike. NEWS SUMMARY

MS. WARNER: After suffering a stinging defeat on the crime bill in Congress last night, President Clinton today vowed to fight on until it's passed The measure was blocked by the Republican leadership in an unusual coalition, some members opposed to a ban on certain assault weapons and other members who wanted safeguards against racial bias in death penalty sentences. This morning, the President said there was something badly wrong in Washington if Congress couldn't address the No. 1 concern of Americans, crime. Later, he had this to say at a police convention in Minneapolis.

PRESIDENT CLINTON: The first responsibility of government is law and order. Without that, freedom can never really be fully alive. Without that, people can never really fully pursue the American dream. The police here know that. That's what their lives are all about. Most ordinary Americans without regard to their party know that deep down in their bones. Last night we had a vote on democracy's most fundamental responsibility and law and order lost.

MS. WARNER: House and Senate Republicans said today they're willing to work with the President to come up with a bill both sides can agree on, but they repeated their opposition to the current bill.

REP. NEWT GINGRICH, Minority Whip: The President has an opportunity to learn a lesson from yesterday's defeat in the House to decide to reach out on a bipartisan basis and to rewrite the conference report in a way which will garner a large number of Republican votes, and we believe that's possible.

MS. WARNER: The current bill would also fund the 100,000 more police, new prisons, and youth programs. Robin.

MR. MAC NEIL: The administration also mounted the new offensive today to get health care reform through Congress. President Clinton dispatched his cabinet secretaries and other administration officials to Capitol Hill to persuade Senators to pass the Mitchell plan. It would phase in universal coverage through tax increases and subsidies. Debate on the proposal has entered its fourth day. Both sides continued to press their cases for and against the legislation.

DONNA SHALALA, Secretary of Health and Human Services: The American people want health care reform. They want universal coverage, and the Congress of the United States, we expect them to deliver a good package for the American people.

SEN. DON NICKLES, [R] Oklahoma: If you look at the Mitchell, Gephardt, Clinton bills, they're all massive mandates. They're all telling every business in America, we don't think that your plan is good enough, we're going to replace it with a government plan. It's going to be a very expensive plan. This bill is fatally plan. It needs to be defeated. We need to start over.

MR. MAC NEIL: House Speaker Thomas Foley said today that debate on the Gephardt health reform bill will be delayed indefinitely due to last night's defeat of the crime bill. We'll have more on the congressional battle over health care reform and crime after the News Summary. Anti-abortion extremist Paul Hill was indicted today for violation of a federal law protecting access to abortion clinics. Hill has already been charged with two counts of murder in the deaths of an abortion doctor and his escort outside a clinic in Pensacola, Florida, last month.

MS. WARNER: There may be a glimmer of hope for frustrated baseball fans today. Just hours after the players called a strike over the owners' demand for a salary cap, the two sides unexpectedly went back to the bargaining table in New York. The session broke up late this afternoon without reporting any progress, but negotiators for the two parties did agree to meet with federal mediators. We'll have more on the story later in the program. In economic news, the government reported consumer prices rose .3 percent in July. Higher gasoline and coffee prices were largely to blame.

MR. MAC NEIL: Shannon Faulkner, the young woman trying to enter the all-male Citadel Military Academy, will not be going on Monday after all. A federal appeals court today agreed to delay her admission to let the school restate its arguments. She'll continue to attend day classes as she has all year. Miss Faulkner sued the state-funded school for discrimination when they refused to admit her because she's a woman. Judge Stephen Breyer today became the 108th Supreme Court Justice. He was sworn in by Justice Antonin Scalia at a White House ceremony. The federal appeals court judge from Boston will replace retired Justice Harry Blackmun.

MS. WARNER: U.N. peacekeepers met with representatives of Bosnia's Serbs today as fighting escalated between Serbs and Muslims. Officials said the fighting violated the exclusion zone around Sarajevo and that sniper attacks were on the rise again. Serb forces seized more U.N.-held weapons overnight but returned them at the U.N.'s insistence.

MR. MAC NEIL: German police announced they had seized tiny amounts of weapons grade nuclear material that may have been smuggled out of Russia. The seizures occurred in two separate incidents over the last several months. Authorities said the smugglers might plan to sell the fuel to terrorist groups or countries that want nuclear bombs. FBI Director Louis Freeh called the smuggling the greatest long-term threat to the security of the United States. Sec. of State Christopher said today that U.S. and North Korean negotiators will probably convene a new round of talks in September. The two sides have been meeting this week in Geneva over the North's suspected nuclear weapons program.

MS. WARNER: Attorney General Janet Reno today vowed that the U.S. won't permit another Mariel-style exodus of Cubans to the United States. In 1980, tens of thousands of Cubans, many of them criminals, were allowed to flee to the U.S. by the Cuban government. Last night, Fidel Castro accused the United States of encouraging Cubans to flee their country, and he threatened once again to permit another mass migration.

MR. MAC NEIL: A new exodus of Rwandan refugees seems to have begun. Thousands of Rwandans began leaving the French-protected safety zone in moving towards Zaire today. The French are scheduled to leave Rwanda in the next 10 days. U.N. officials said another million refugees could move into the already overcrowded camps in Zaire. And aid groups are now warning that all of Central Africa could be impacted by the migration of refugees. And that's our summary of the news -- of the top stories. Now it's on to the battle over the crime bill, politics in Washington, a report from Haiti, and the baseball strike. FOCUS - BATTLEGROUND

MR. MAC NEIL: Now the politics of crime. President Clinton went on the offensive today to resurrect the $33 billion crime bill which was struck down on a procedural vote yesterday in the House of Representatives. We'll have some political analysis, but first, Kwame Holman has this report on today's developments.

MR. HOLMAN: Before leaving for Minneapolis to deliver a speech to police organizations, President Clinton this morning stopped to lash out again at those members of the House who yesterday voted to turn down a procedural rule that in effect defeated the crime bill.

PRESIDENT CLINTON: Ladies and gentlemen, last night when 225 members of Congress voted with the NRA and the Republican Congressional leadership under enormous pressure they decided that their political security was more important than the personal security of the American people. Congress has an obligation to the American people that goes way beyond politics and way beyond party. We are going to fight and fight and fight until we win this battle for the American people. Thank you very much.

MR. HOLMAN: Voting against the President were 58 members of his own party, most of them conservatives who said they didn't like the $7 billion in new social spending contained in the crime bill and a ban on a new list of assault weapons. But many of them simply entered statements into the record. None of them wanted to debate the issue on the floor.

REP. CHARLES STENHOLM, [D] Texas: [Yesterday] Mr. Speaker, I rise in strong opposition to the rule and the bill and ask you now to extend my remarks.

MR. HOLMAN: Nine Democratic members of the Congressional Black Caucus also voted no because the bill did not include a provision that would have made it easier to prove racial discrimination in death penalty cases. But none of them came to the floor to debate either. John Conyers of Detroit voted yes.

REP. JOHN CONYERS, [D] Michigan: [Yesterday] I wrote the racial justice provision. The Senate took it out of this bill but I'm supporting this rule because I come from one of the cities where guns are easier to get than jobs, where gun licenses are more available and easier to obtain than driver's licenses, where we have a situation that's got to be changed by this House.

MR. HOLMAN: As for the Republicans, they simply followed the leader.

REP. ROBERT MICHEL, Minority Leader: [Yesterday] And one final word, particularly on my side of the aisle, this is a procedural vote. It's a vote on a rule. How many times have we been had on our side of the aisle by the rules of this House? This is a procedural vote. And it means whether or not we can make an impact and a difference on cleaning up a bad bill. That's what it's all about. And you ought to take advantage of that opportunity. Don't let it slip through your fingers when it's right at hand.

MR. HOLMAN: Democratic leaders were able to attract the votes of 11 Republicans but not enough to prevent a rare minority victory in the House.

REP. THOMAS FOLEY, Speaker of the House: On this vote by recorded vote, the yeahs are 210, the nays are 225, and the resolution is not agreed to.

MR. HOLMAN: This morning, Bill Richardson of New Mexico, one of the top Democratic vote getters in the House, said the loss wasn't because he miscounted.

REP. BILL RICHARDSON, [D] New Mexico: We had five members who didn't level with us. That didn't help. Perhaps our mistake was that we should have had the vote a day before, but our counting was good. We estimated we would have 199 Democrats. We had 197. But then in our leaning yes category, we had some that didn't lean our way, and then lastly, we expected about fifteen, sixteen Republican votes. We only got 11. The Republicans were very effective in the end in peeling off those leaning yeses and intimidating many of their members into not supporting us. The Republicans were very effective.

MR. HOLMAN: Republican Henry Hyde of Illinois said what doomed the crime bill were the additions made to it once the Senate got hold of it.

REP. HENRY HYDE, [R] Illinois: The racial justice provisions were particularly offensive to many of us, and we were pleased that those were stripped from the bill. But as we got onto the conference between the House and the Senate, we saw additions of the bill started out as a $22 billion bill in the House. It ended up as about a $33 billion bill out at the conference, with maybe 30 new social programs superimposed on many programs that already exist and do much of the same thing. There were no hearings on these programs. Nobody really knew beyond the statement of the title what they accomplished, and more importantly, they were largess billions of dollars handed out at the discretion of the Attorney General and the Secretary of Health and Human Services. We viewed that as a reward to big city mayors. We reviewed that as President Clinton's fiscal stimulus program under another name, and that was something that turned many of us off.

MR. HOLMAN: Meanwhile, House Democratic leaders regrouped this morning and emerged optimistic the crime bill could be revised.

REP. RICHARD GEPHARDT, Majority Leader: This is an important piece of legislation that people really want, and I think we can pass it. I think we can pass it next week. That's our goal, and however long it takes, we're going to stay here and do the crime bill.

MR. HOLMAN: Republican leaders said they too welcome a reworked crime bill.

REP. NEWT GINGRICH, Minority Whip: We just as a group signed a letter to the President which we are faxing to Air Force I which says that we are prepared to sit down in good faith; we would like to meet as early as we can this evening when you get back; we believe now is the time to start talking, and we would hope that we could have an effective conference.

MR. HOLMAN: But the President who passed up the swearing in of his new Supreme Court nominee to fly to Minneapolis and blast Congress didn't sound any more conciliatory this afternoon.

PRESIDENT CLINTON: Now, folks, you all know what happened last night. The House of Representatives tried to take the easy way out, tried to walk away from the crime bill. Because of organized, intense, and highly political pressure a majority walked away, away from the police patrolling our streets, away from the children and senior citizens afraid to walk on those streets, away from all the hard working, middle class Americans who were not organized into any group but who have told us over and over again that crime is their first concern and pleaded with us to do something about it. It's the same old Washington game. Just stick it to ordinary Americans, because special interests can keep you in Congress forever and special interests can beat you, because they're organized and they have money and they can confuse God-fearing, hard working ordinary Americans. Well, goodness knows, I've seen a lot of that in my time as your President and even before. But the time has come for those of you to say that the only way for Congress to make their seats safe is to make the rest of America safer. [applause] Just imagine what would be happening in America today if Congress had yesterday voted to take 100,000 police officers off of the street, to put 19 more kinds of assault weapons on the street, to get rid of prison street for 100,000 criminals. Well, that's what they did. No to a hundred thousand police, no to the juvenile ownership of handguns ban, no to the assault weapons ban, no to three strikes and you're out, no to the prisons, to the prevention. We need more Democrats, and we need more Republicans to follow the lead of those 11 brave Republicans and the Democrats who put aside their differences with certain specific provisions to put the American people first. That is what we must have, more people like that, people who believe in you and your future and will not take the easy way out. The walkway crowd has got to change. [applause] You know that we didn't get you a crime bill yesterday, but we're going to get you a crime bill. We are going to get you a crime bill. [applause] To all the police officers in this country who walk out there for us every day, Washington cannot walk away from you, and all the ordinary Americans who are just out there watching this unfold, hearing all the rhetorical wars back and forth who know there's no American Association for ordinary citizens up there walking the halls of Congress. We're not going to walk away from you either. Yeah, it was a defeat yesterday, and I felt terrible about it. This morning I woke up feeling good because that's a vote I'd much rather be on the losing side of than the winning side. I am glad I will never have to explain to my wife, my daughter, my grandchildren, and the people who send me to Washington why I did something like what was done to the American people yesterday. Let us turn it around and put the people of this country first. Thank you, and God bless you all. [applause]

MR. HOLMAN: Late this afternoon, the White House said the President was unlikely to accept the Republican call for a summit to reach a crime bill compromise.

MS. WARNER: Now political analysis of the crime bill vote and health care reform among other things. Mark Shields is on vacation but Wall Street Journal columnist Paul Gigot is here, and joining him tonight is Washington Post reporter and columnist David Broder. Welcome, gentlemen. Paul, what really happened last night? How did this go down?

MR. GIGOT: Well, a lot of things happened, but I think the overarching point is that some of the President's trust problems, the problems that people have on the Hill and his popularity, finally caught up with his legislative agenda. What I mean by that is that when he staked his prestige and a lot of clout on trying to get this passed and he arm twisted a lot of members, and he cajoled a lot of members, including a lot of Republicans, and they said, no, sir, we don't have to do it, we have other interests that are more important, and they just resisted him. He doesn't have that -- what presidential scholars call the power to persuade. He's lost that and it affected his vote.

MS. WARNER: Do you agree, David?

MR. BRODER: It was a very electric moment up there in the press gallery when this vote came. Nobody knew how it was going to come out. And when the Republican -- when the opposition tally passed 218 and the Republicans realized that they were going to win, it was a moment I think, Paul, a little bit like when Ronald Reagan turned to Jimmy Carter in that presidential debate and said, "There you go again." You just felt powers shifting. The person -- people who had come in as underdogs suddenly realized we're in command of this thing and put it a little bit in historical context, Margaret. Back during the transition in Little Rock, Dick Gephardt and George Mitchell, the Democratic leaders of the Congress, came down and said to President-elect Clinton, you can pass your domestic program with Democratic votes.

MS. WARNER: Democrats only.

MR. BRODER: We can deliver for you. And up until 4:30 or so yesterday afternoon the House Democrats had always delivered. When they lost control of the floor of the House of Representatives, one of the basic fundamental props of the Clinton presidency was taken away. Now let me say quickly I do think that they're going to get the crime bill back on its feet next week but nobody will have forgotten that they lost control.

MS. WARNER: But if the President lost power to persuade, what about the persuasive power we keep hearing in polls that the American people want something done about crime? I mean, that's what had pushed the vote so much in the spring. What happened to that? Why did all these people feel they could defy that?

MR. GIGOT: I think it's related to the point that David makes, which is that the President had tried to build a coalition from the left in. He has done it on just about everybody. He did it on the budget last year. He's tried to do it on health care, not very successfully, and he tried to do it on the crime bill essentially by giving a lot of things to the Black Caucus, for example, money for the inner cities. That's where the Republicans zeroed right in, calling it pork, midnight basketball games, that sort of thing. So they said, look, it's a crime bill, the President says it's a crime bill, let's look what's really in the crime bill. And they found that persuasive to the public because they don't believe the President's labeling.

MS. WARNER: Well, are you saying, Paul, though that on the Republican side this was really about not so much about the substance as it was about giving Clinton a defeat, deny him a victory? I mean, where's the trade-off there between substance and just the partisan battle?

MR. GIGOT: Was politics going on? Sure. I mean, like --

MS. WARNER: That's my question. I mean, where's the division here, because they voted on much the same bill this spring?

MR. GIGOT: That's right. They did. But I think Henry Hyde was right when he said a lot of stuff did get put in. That created an opening for them on the substance. If they had just wanted the President a defeat on crime and they didn't have anything to argue with, they would look cynical. But what gave them the opening was a lot of the stuff, racial justice provision and other things, and they used it, they ran with it.

MR. BRODER: Let me say just quickly I think there's a lot to be said for midnight basketball leagues in center cities where people work day jobs and don't have a lot of other recreational opportunities. But the point is that I think you're right, Margaret. There is a public demand for crime legislation, and I think that's why the Democrats will be able by tinkering with either the procedure or the bill itself to put this thing back on its feet. One other quick note: Underlying all of this is a bipartisan fraud. We have had I don't know how many crime bills, omnibus crime bills, in the last 26 years since Richard Nixon ran for president on law and order. Crime is essentially a local problem, and nothing that these people are doing on Capitol Hill fundamentally is going to change that fact of life.

MS. WARNER: How do you explain, Paul, that certain Democrats, even leadership figures like say Lee Hamilton, chairman of the House Foreign Relations Committee, would also vote against the President? I mean, doesn't this put the President in jeopardy and maybe their own re-election in jeopardy?

MR. GIGOT: Not ultimately I don't think, and that gets to this point about how valuable is the President to have campaign your district. I mean, one guy up there on the Hill told me this week that if he really wanted -- the President really wanted to pass the bill, he would have threatened to campaign for some of these Democrats, because that would have really scared them. He just doesn't have -- say Dave McCurdy, a general --

MS. WARNER: One good example.

MR. GIGOT: -- but he's running for -- for the Senate in Oklahoma. He had voted for the assault weapons ban, but Bill Clinton doesn't, isn't very popular in Oklahoma, and defying Bill Clinton is almost a virtue down there.

MS. WARNER: Do you agree with David though that something will be put together and, if so, how will that happen?

MR. GIGOT: I think probably will be, because neither party wants to get tagged with the label of being against crime, and the Republicans, in particular, because Republicans -- one race is in New York City, LA last year and part on the crime issue. I don't - -

MR. BRODER: And it's a big part of their planned arsenal for 1994.

MS. WARNER: The President seemed to be saying today, he seemed to really be going on the offensive and saying, I'm not going to agree to compromises,and I'm going to push this to another vote. Do you think he can get the same bill essentially?

MR. BRODER: At the same time he was saying that up on Capitol Hill leaders of the Democratic Party and House were saying it won't be-- Richard Gephardt said, we'll probably have those assault weapons banned in the bill but it won't be the same one that was in there last time. There may be a separate vote given the members on the assault weapons ban so those who have problems with that can support the rest of the bill. There are all kinds of compromises that are being negotiated, I expect with the President's approval.

MS. WARNER: Before we go on to the health care reform bill, there was quite an electric moment last night when Dick Armey, chairman of the House Republican Conference, said something about we don't care, your President is just not that important to us, and Tom Foley, the Speaker, came down on the floor and said, you know, Ronald Reagan was our President, Richard Nixon was our President, he's our President. Was this a particularly vicious partisan battle? Is this a harbinger of things to come in a Gingrich-led Republican minority?

MR. GIGOT: I think it's typical of the House these days, and it's been so for the last number of years that I've watched. The House is just a very partisan place, and you saw some of the frustration in Bob Michel's comments that this is a procedural vote, and Bob Michel has been in the minority all of his House career, and he's been trampled by procedural votes for all time. And this was one he could win. And he was saying, now they're calling this a procedural trick; you've been doing this to us for 30 years.

MR. BRODER: This is a legacy that President Clinton inherits. He didn't create this. And I think Paul is exactly right, that there is on both sides, because after the vote, when Mr. Gingrich was trying to get recognition to say what he's eventually got to say today, namely we'd now like to sit down and talk with you, he was not allowed to speak on the floor of the House of Representatives because the Democrats objected to it.

MS. WARNER: Now, what is this going to do to health care reform? Let's start with the meeting last night between -- with the President and Panetta and Foley and Gephardt, Paul, which they decided to delay turning to health care reform in the House.

MR. GIGOT: They did decide to delay it, and I think fundamentally they decided to delay it because they don't have the votes. In fact, it's going in the wrong direction for them. Certainly the crime vote didn't help because it slows the momentum. I mean, winning is a habit, so is losing. But the problem is that ultimately this coalition that they'd hoped to put together, a kind of another left in, 218 votes, all Democratic coalition in the House, is informing. And in fact, you have a centrist coalition that formed this week, Democrats and Republicans, that put an alternative bill together that is giving moderate Democrats a place to land. It's a big threat to the Democratic bill.

MR. GIGOT: That hybrid bill that Paul refers to is probably as important as the loss on the crime bill because again many members of Congress do not want ultimately just to vote no on health care. This gives them for the first time in the House of Representatives a credible alternative. And late this afternoon, we heard that two very prestigious Senators, Sam Nunn, a Democrat from Georgia, Pete Domenici, a Republican from New Mexico, are planning to offer the same kind of package as a bipartisan conservative, moderate alternative in the Senate. So now the Democrats really have a threat as to, again, will we be able, we Democrats be able to control the floor of the House and Senate, or will this coalition take it away from us?

MS. WARNER: And all this debate that we heard on the Senate floor this week, was it moving the Senate anywhere? Was there any progress do you think?

MR. BRODER: The short answer to that is no. The Senate has not moved anywhere. This is part of an exercise. Being Senators, they all have to bloviate for a while, and so you can say, well, they've got that out of their system and maybe next week they'll start voting on amendments. Meantime, the House really is off -- seriously off schedule, and the time become an enemy of action at this stage of the game. And they're very close to being up against deadlines.

MS. WARNER: Well, Paul, what should we be looking for next week as a sign that there is action, there is movement, something is coming together in the Senate? What would be a signal of that, as we watch all this bloviating on the screen, as David described it?

MR. GIGOT: I think George Mitchell would have an easier time settling the baseball strike than he would have passing his health care bill. I think it's really in deep, deep trouble. He's going to want to try to get some votes next week I think. The Republicans --

MS. WARNER: On what thing?

MR. GIGOT: On, for example, the employer mandate.

MS. WARNER: It's a deferred one, butt --

MR. GIGOT: It's deferred. That's right. It's essentially employer mandate. And the President, of course, said this week that the Mitchell bill is his bottom line, so if it goes below that, Mitchell's going to try to save that. Now the Republicans are going to want to talk about this bill, they're going to want to read this bill, all 1400 pages, get all these little tiny things and point 'em out to the public and delay it and delay it and delay it, because they're convinced that the more the public knows, the more anxious they get and the less they like the bill.

MS. WARNER: But then how would this centrist bill begin to gain? I mean, give us an idea, if you're here sitting at home, watching TV, and trying to figure out what's going on, what would happen? Would they come in and substitute it for the Mitchell bill?

MR. BRODER: In the Senate, it would be offered as a substitute in the form of an amendment, and -- but I don't think that will come probably until the late stages of the debate. One of the prerogatives that the Majority Leader, Mr. Mitchell, has as -- that it goes with his office is that he can pretty much control the sequence of events in the Senate. I don't think he will want to bring up that substitute early on in the process. So I think probably for the next week in the Senate we're going to see testing of strength on individual amendments rather than one big package versus another package. It'll probably be another week after that before we get to that stage in the Senate.

MS. WARNER: And do you share Paul's assessment that the Mitchell bill's really, really in trouble?

MR. BRODER: It -- nobody has votes to pass their bill at this point in the Senate, but since Mitchell is out there in front, he is in the most vulnerable position because the longer he is out there with his proposal without being able to rally sufficient support to it, the worst the prospects look.

MS. WARNER: And if this centrist bill or some of these centrist ideas come in, what are we really talking about here, and is it something the President could credibly move to and declare victory?

MR. GIGOT: A fascinating political question. David wrote a very good column back in the early part of this year when the President held up his veto pen and said I will veto something that doesn't have universal coverage, and David said, maybe this wasn't a good idea, there's some political risk here. And now we're finding out that, indeed, there is because the Senate and the House may, indeed, pass a bill that a lot of middle class Americans find is a credible health care reform. But it doesn't meet the President's criteria, so he looks like he has been beaten back, and it's not his bill.

MR. BRODER: The one thing we have to say just substantively, without getting into a lot of technicalities, there is real question whether these partial measures will have positive or negative effects for most middle class people who have some kind of health insurance already. The example of New York State, where they did a partial change, insurance reform, suggests that maybe it means that insurance rates go up for most people, and very few additional people get insured. That's what the Democrats were hoping the Congressional Budget Office will tell them about these alternative plans.

MS. WARNER: I'm afraid we're out of time but we'll be back to talk about it next week. David, Paul, thanks. Robin.

MR. MAC NEIL: Still ahead, the situation in Haiti and the baseball strike. FOCUS - WAITING GAME

MR. MAC NEIL: We go next tonight to Haiti, the Caribbean nation struggling under international economic embargo and the threat of invasion. The goal of both is to get rid of Gen. Raoul Cedras and other members of Haiti's ruling command who overthrew the duly elected president, Father Jean-Bertrand Aristide, three years ago. Correspondent Elizabeth Farnsworth and her crew were deported from Haiti last week but not before they'd completed their reporting assignment. This is the first of her NewsHour reports.

MAN SHOUTING: We got no problem with America!

MS. FARNSWORTH: As the noose around Haiti tightened last month, angry protesters gathered outside the U.S. embassy. The military- dominated government organized and paid for this demonstration to send the message that it's determined to ride out the United Nations embargo and to resist any invasion. The event commemorated the day 79 years ago when U.S. Marines first landed on Haiti's shores. They had come then to restore order, they said, after a Haitian president was killed by a mob. That U.S. occupation lasted 19 years. These demonstrators vowed to prevent another invasion now. But people were most passionate in denouncing the embargo, which they blame for their hunger. It serves the government interest to get this point of view on worldwide television but as the embargo bites deeper it is increasingly unpopular, even among those who want deposed President Jean-Bertrand Aristide back. The embargo is not air tight but it has slowed down the capital city, Port-au-Prince. Haiti has long been the hemisphere's poorest nation, and since the mid 1980s, the economy has been on a downward slide mostly because of instability, corruption, and poor administration. But the embargo is poison to the already weak economy. Gasoline supplies have been reduced to the point where traffic in Port-au-Prince is down to about 40 percent of normal. A key industrial thoroughfare is nearly deserted at rush hour. Factories that produced clothing and other goods for the international market sit idle, their equipment resting. This one, which made T-shirts for the National Football League, employed 700 people. The owner estimates that each workerhad at least eight dependents. Layoffs across Haiti have led to mass unemployment in an economy where paid work is always scarce. At the same time, prices of home grown staples like corn and rice have quadrupled mainly because of the high cost of gas which makes getting them to market more expensive. The results are hunger and rising levels of malnutrition. As Grace Hospital, women waiting for treatment complained about the hardships.

FIRST UNIDENTIFIED HAITIAN WOMAN: [speaking through interpreter] This country already didn't have enough to provide a decent life, and when you put an embargo on, things become worse.

SECOND UNIDENTIFIED HAITIAN WOMAN: [speaking through interpreter] Now, I don't have enough money to feed my children.

MS. FARNSWORTH: Could you tell me why you have brought your daughter here?

THIRD UNIDENTIFIED HAITIAN WOMAN: [speaking through interpreter] My daughter has had a fever for more than a week.

MS. FARNSWORTH: Do you have enough to eat in your house?

THIRD UNIDENTIFIED HAITIAN WOMAN: [speaking through interpreter] Not hardly. We just can't eat.

MS. FARNSWORTH: For example, tell me what she hate yesterday.

THIRD UNIDENTIFIED HAITIAN WOMAN: [speaking through interpreter] She didn't eat anything at all.

MS. FARNSWORTH: Dr. Marie Renee Francisque is director of Grace Hospital.

DR. MARIE RENEE FRANCISQUE, Grace Children's Hospital: The problem is, the main problem is the children with malnutrition.

MS. FARNSWORTH: Malnutrition.

DR. MARIE RENEE FRANCISQUE: Yes, malnutrition. Like in the out- patient department, 75 percent of the children who come, they are malnourished. In the past it was 40, 50 percent. More and more the number of children with malnutrition are increasing. Very often, you know, health is no longer a priority for these poor people, and very often, you know, they come with their children already died, because they can't afford to pay for the public transportation. Like in the past, someone can pay $1 to come here but now they have to pay $5, sometimes more than that, and it's why very often they come too late.

MS. FARNSWORTH: This abandoned baby was brought to the hospital near death. According to the United Nation's Children's Fund, or UNICEF, 50 percent of Haiti's kids are malnourished. That figure is up from 27 percent three years ago. Not all but some of that increase is due to the embargo. Transporting food stuffs to market is expensive because gasoline now costs $7 a gallon, up from less than $2 before the embargo. Service stations have shut down, but gas is readily available throughout Haiti for those who can afford it. People without jobs are selling jobs to stay live, and they compete avidly. The gas is being smuggled in at night from the Dominican Republic. The border between Haiti and the Dominican Republic has not yet been completely sealed. The United Nations is in the midst of deploying an 80-person, mostly military group, along the border to help the Dominicans seal it further. U.S. Ambassador William Swing.

WILLIAM SWING, U.S. Ambassador, Haiti: They'll be supported by a 50-member U.S. logistical support team, which will be all military. so at that point the gross leakage will stop. You will never stop entirely foot traffic, particularly with the price differential being what it is, but those, those amounts will not be significant enough to fuel this economy and the pressure will be felt.

MS. FARNSWORTH: Amb. Swing said the U.S. is trying to cushion the worst blows of the embargo by providing free food at locations throughout Haiti, including this orphanage just outside Port-au- Prince. The children's meals include flour and beans donated by the U.S. Agency for International Development. But the embargo is making the work of AID and international humanitarian agencies extremely difficult. Elizabeth Gibbons is the representative of the United Nation's Children's Fund in Haiti.

ELIZABETH GIBBONS, UNICEF Representative: On the international level, as you know, the sanctions committee has explicitly exempted food and medical items from the embargo. But unfortunately, suppliers of these foods and particularly medicines don't full understand it. So they do an auto embargo and refuse to, to send, for example, vaccines, which had a supplier that cancelled a vaccine order because he understood, despite the fact that the Security Council had cleared all medical supplies, that he would be sanctioned. Critically needed family planning supplies were also affected in this way. And we have a problem with AIDS tests as well.

AMB. WILLIAM SWING: We've said often, and I'll repeat it again here, that sanctions are a blunt instrument. And by that I mean it's, undoubtedly there are going to be people hurt you're trying to protect and there will be people who are benefited by this who you would like to get to. Some people are getting richer as a result, and some people are not getting the goods they need who are poor. In the course of looking at diplomatic options, the spectrum is fairly short. You've only got so many possibilities. And sanctions seem to us to be the right one.

MS. FARNSWORTH: In recent weeks, the embargo has increasingly pinched the wealthy who live in houses like these in the hills above Port-au-Prince. Their assets in the United States are frozen. Many of their factories have closed. And those who haven't already left can no longer easily depart Haiti, since the last commercial flight took off July 30th. Attorney Mireille Durocher Bertin has been a legal adviser to Gen. Raoul Cedras, the man who deposed President Aristide in 1991 and is now commander in chief of the armed forces.

MIREILLE DUROCHER BERTIN, Legal Adviser to General Cedras: As a business lawyer, I worked for factories and, you know, companies here who left the country because they could not deal with the embargo. And many of my clients had to close their, their business and to live on whatever they could have as reserves. It is a very difficult situation because people cannot pay the banks; they're losing their houses, and I would not oppose if Mr. Cedras decided not to renew his term for another three year-period and would leave the army, but Mr. Aristide should also be out of the game, and Haiti should be given a chance to go to new presidential elections.

MS. FARNSWORTH: So it'd be kind of a trade. Cedras could leave but Aristide couldn't come back basically?

MIREILLE DUROCHER BERTIN: Exactly.

MS. FARNSWORTH: And is that something that many people in the business sector would support, do you think?

MIREILLE DUROCHER BERTIN: I think so.

AMB. WILLIAM SWING: I've heard these various stories about trading this person for that one, but whether it's rumor or reality would not represent a position that our government could support. The objective of bringing President Aristide back and getting the process going again is not a negotiable item and never has been.

MS. FARNSWORTH: President Aristide's supporters, especially among the poor, keep a low profile in Port-au-Prince. They have been hard hit by government repression since the coup in 1991. Thousands have fled the country in small boats, gone underground, or been killed. Sen. Turneb Delpe, head of a coalition of pro-Aristide organizations, counsels people who are underground in Port-au- Prince.

TURNER DELPE, National Assembly: [speaking through interpreter] We are certain that the objective of the coup de ta was to destroy the grassroots organizations. We are not in favor of military intervention from abroad. Our goal is still to get out of the situation through a negotiated solution.

MS. FARNSWORTH: But at the demonstration outside the U.S. embassy French Correspondent Dominique Levanti, who has reported from Haiti for more than 25 years, said he thought it was too late for more talk.

DOMINIQUE LEVANTI, Agence France Presse: The sanctions and the embargo have increased the political hate in this country. I don't think there is any reconciliation possible for the moment.

MS. FARNSWORTH: Carl Denis is political adviser to Emile Jonassaint, the interim president installed by the military in May.

MS. FARNSWORTH: Mr. Denis, what sort of plan does the government have in case of invasion, I mean specific plan?

CARL DENIS, Presidential Adviser: The only thing we can do is outright guerrilla, and there is no way you can put an M-1 into the slums of Port-au-Prince. There is no way you can put the Aumvee in there. It's going to be a man for a man. And in those conditions I don't think the might of the United States is going to work.

MS. FARNSWORTH: Emmanual Constant heads FRAPH, a large paramilitary organization.

EMMANUEL CONSTANT, Secretary General, FRAPH: I'm going to send out to everybody evaporation. I mean, they won't find any military target but they're going to be -- it's going to be very hard for them to even pee -- I'm sorry.

MS. FARNSWORTH: So you're talking about --

EMMANUEL CONSTANT: We're talking about mostly resistance, guerrilla, urban guerrilla and rural guerrilla warfare, like in Salvador, like everywhere else, like in Nicaragua.

MS. FARNSWORTH: Over the past few days in a show of bravado, the government has begun training a rag tag civilian militia, so far mostly without weapons. Repression has also intensified with new killings and threats against journalists and Aristide supporters. A U.S. invasion does not seem imminent since the Clinton administration says it wants to give heightened sanctions a chance to work. But the United States and Haiti remain on a collision course.

MR. MAC NEIL: A postscript to that report. When Elizabeth and her crew were deported last week, their Haitian interpreter and driver were held by authorities for a number of days. They were released yesterday and have returned to their homes. FINALLY - STRIKE OUT!

MS. WARNER: Finally tonight, the serious side of the summer game. Many consider this one of the most exciting baseball seasons in memory but for now it's over. Why the strike? Business Correspondent Paul Solman of WGBH-Boston looks at the economics of an industry known as the national pastime.

MR. SOLMAN: Baseball the way it used to be, the way it still is in the Cape Cod League. For fans, the price is right, free admission, and they don't have to put up with all the posturing about strikes and salary caps, since the players here don't get paid. Part-time jobs at the local grocery or McDonald's tide them over.

CLINTON THAYER, Orleans Cardinals: I mean, this is the way, this is the way baseball is meant to be. It's the way it was when it started out, and it's a lot of fun. Everybody here is really wanting to play. And everybody goes after it 100 percent. You don't have like the prima donnas that youmay sometimes see in, you know, professional baseball.

MR. SOLMAN: Would you play baseball for nothing in general? That's my question.

ANDREW SPENSER, Orleans Cardinals: Yes, oh, yes. I mean, I love to play. So anytime I can play, whether it's in a sandlot or here on Cape Cod, I'll do it.

MR. SOLMAN: And you would do it even if there wasn't this industry of baseball?

ANDREW SPENSER: Mm--hmm.

MR. SOLMAN: Why?

ANDREW SPENSER: It's the competition and just the fun of being out here and playing nine innings.

MR. SOLMAN: Andrew Spenser, a sophomore at Dartmouth College, plays center field for the Orleans Cardinals. He and his fellow top flight collegians are only one win away from eliminating the Brewster Whitecaps and making the finals. But while there is real join in Brewsterville, where money is no object, in the big leagues, big bucks have brought the game to a standstill. Baseball's owners claiming salaries are too high, teams losing money, are insisting on a cap or ceiling on their payrolls to control costs. The owners' negotiator is Richard Ravitch.

RICHARD RAVITCH, Owners' Negotiator: [August 4] And all we are trying to accomplish in this negotiation is to arrive at a system which enables the owners to know what it's going to cost them to play ball, and that cost bears a reasonable relationship to the total cost of running baseball.

MR. SOLMAN: The players have struck to keep the current free market system in place.

JIM POOLE, Baltimore Orioles: You're talking about a restriction on what you possibly could earn in salaries, and that is not a free market system at all.

MR. SOLMAN: The free market has been very, very good to baseball players. The average salary is more than a million dollars, the players' total take about a billion a year, 58 percent of all the games' revenues, up from just 40 percent in the last decade. At this rate, the owners, especially those in smaller cities, claim they'll go broke. The players don't believe it, and so far in this, the game of inches, neither side has given so much as a millimeter. Murray Chass is covering the strike for the New York Times.

MURRAY CHASS, New York Times: The problem here is there's no common ground because of the difference in philosophies. It's not like they're quibbling over a billion dollars and saying okay, we'll compromise at half a billion. It's two totally different philosophies they're discussing, and that's the difficulty in being able to find a compromise.

MR. SOLMAN: But how is it that America's national pastime has gone the way of all business, beset by salary caps and players' strikes, when in the good old days, caps were for wearing, strikes for umpires? Well, to begin with, in the late 19th century, America had finally become wealthy enough to support whole industries of leisure. The people who ran baseball teams seized the opportunity and created the business of baseball. The owners were the people who cashed in first, or as University of Cornell Economist Robert Frank puts it --

ROBERT FRANK, Economist: People discovered that people were willing to pay to see the game, and so fences were built and admissions charged, and from that day forward, we had a business, not a game. And I think it's no different from any other enterprise. If you've got a product that people are willing to pay for, they're going to wall it off and charge admission to see it.

MR. SOLMAN: With the advent of TV, owners began to rake in real revenue. As early as the 1950's, corporate America had begun using the game to move merchandise to the male consumer.

TV COMMERCIAL ANNOUNCER: Every game is a lot more fun when you have this book.

MR. SOLMAN: But baseball players didn't really share in the bootie until 1976, when the courts ruled they could sell their services on the open market to the highest bidder.

ROBERT FRANK: Once you open up the door to bidding, 1976 was a free-for-all essentially. If New York bids for Los Angeles's star player, then Los Angeles has to bid for New York's star player, and still you have the same limited number of star players, still you have one team winning the World Series in the end, but there's been an enormous movement of resources away from the owners toward the players. From the owners' perspective, it's a prisoner's dilemma. It's, it's in each one's interest to bid for the talent, but once they all bid, they all do worse than if they'd all stayed on the sidelines.

MR. SOLMAN: This is a classic conundrum of capitalism. Whenever you're bidding on a fixed quantity of something, trying to get an edge on the other guy, you simply drive up the price. Historically, for business, one answer has been collusion, antique dealers at an auction, for example, agreeing beforehand as to who will bid for what. Baseball owners did roughly the same thing until it was finally ruled illegal. Their new version of self-restraint is the salary cap. But understand, the owners are simply trying to cope with the dilemma that goes beyond baseball, beyond business, to all competitions. Faced with unbridled competition and the road to ruin, people are always trying to come up with new ways to restrain themselves.

ROBERT FRANK: Any time you see a contest, there's going to be an arms race among the contestants to win the contest. A military arms race is the simplest example. There we saw an arms control agreement. If you see the people who dueled in the 18th century in Europe, they had all sorts of limits on what they could do. They had to have smooth bored pistols so the bullets wouldn't be very accurate. They had to pace off 50 steps so when they turned and fired they would be likely to miss one another. So there are all these things where if you have contestants in a contest, they're going to do things that cancel each other out, and so they make little agreements to, to sort of lower the costs of doing business.

MR. SOLMAN: The point is, as nations come up with arms agreements, duelists with regulations, professional sports have taken to salary caps, and they seem to work. Consider pro- basketball. Players and owners were at odds for years. Much like baseball, owners were bidding up the price of talent, eating away their own revenue. When the sport floundered in the early 80's, the owners asked for and got a salary cap. But in return, the owners had to agree to share 53 percent of total revenues with the players. What followed was the economic miracle of the NBA. And pro-football has recently adopted the same basic trade-off, a salary cap in exchange for revenue sharing. Today salaries in both these sports are comparable to baseball's, and, in fact, baseball owners are offering to share 50 percent of revenues in return for a salary cap. But since the players are already taking hold 58 percent in a free market, why should they settle for less?

MURRAY CHASS: Dick Ravitch says, well, you don't like 50 percent, make an offer, you know, give me a number that you like. Well, the players won't do that because that would be buying into the concept of the salary cap, and they don't want a salary cap. So it goes round and round.

MR. SOLMAN: Out on the stands, however, the consumers, i.e., the fans, have had it with all this economic mumbo jumbo.

FAN: I'm a businessman. As a businessman, I can understand what's happening, but as a fan I can't. And there's the difference. As a fan, I really resent it. As a businessman, you can begin to see both sides. And that's the problem. And as fans, we're going to be deprived.

MR. SOLMAN: In fact, in response to our own exclusive Yankee Stadium poll, roughly 25 percent of fans blamed the owners, more than half blamed the players, and almost everyone thought greed was the driving force. We put the greed explanation to economist Robert Frank.

ROBERT FRANK: Well, that's been the standard claim, the fans have charged the players with being greedy, and sportswriters never seem to tire of calling the owners stupid for bidding all these high sums, but that just fails to understand the natural incentives and the situation. If you've got different teams bidding for your services, and you're the player who can deliver a good chance of getting into the World Series, you're in the driver's seat. You're not being greedy to take that amount of money. It's just what the market serves up to you.

MR. SOLMAN: And with fat TV contracts and juicy stadium deals, what the market serves up to baseball owners as well. In fact, you can even see the specter of economics haunting Cape Cod's field of dreams. Sean Casey is one of the premier hitters in the league, and some see a multimillion dollar career for him in the majors. But he told us he is just playing the game for the love of it.

SEAN CASEY, Brewster Whitecaps: I love to play this game. I would never be a player that said, you know, if you don't give me $3.5 million to play a good game of baseball, you know, that I'm going to sit out and strike or whatever.

MR. SOLMAN: Say you get to the majors and you have the kind of season in the majors that you're having in the Cape Cod League, batting over 350, an RBI a game, and you're up for contract renewal, or, you know, your contract's up, and I'm your agent. And I say to you, listen, let's put ourselves up to the highest bidder, would you do it?

SEAN CASEY: Yeah.

MR. SOLMAN: But I thought you don't care about the money?

SEAN CASEY: Ah, geez. Umm, well, I guess sometimes it becomes - - I mean, it's going to be a business sometimes, you know, but the money factor is not a big deal, but there's a business part to it too, you know.

MR. SOLMAN: So you mean once it becomes a business, it has a logic of its own?

SEAN CASEY: Right, exactly.

MR. SOLMAN: And it was that economic logic which shut down major league baseball last night. The two sides did meet again today, and there were some conciliatory gestures, but for the moment, no breakthroughs, which means that for baseball fans, there may be no fall at the end of this long hot summer.

MS. WARNER: Late this afternoon, baseball's owners and players announced they would meet with federal mediators next week. For the record. Sean Casey's Brewster Whitecaps made it to the championship series of the Cape Cod League but lost the title last night to the Wareham Gatemen five to four in thirteen innings. RECAP

MR. MAC NEIL: Again, the major story of this Friday was the fallout over the defeat of the crime bill. President Clinton vowed to get the bill passed and said there's something badly wrong in Washington if Congress can't meet the No. 1 concern of Americans. Republicans said they would work with him on a compromise but repeated their opposition to the current bill. This evening, U.S. and North Korean negotiators announced they reached an agreement to ease tensions over the North's suspected nuclear weapons program. Good night, Margaret.

MS. WARNER: Good night, Robin. That's it for the NewsHour tonight. We'll see you Monday night. I'm Margaret Warner. Good night.