The MacNeil/Lehrer NewsHour

MR. MacNeil: Good evening. Leading the news this Friday, Soviet troops beat workers in a Lithuanian factor as Moscow's economic blockade tightened. The White House called new demands by a group holding American hostages a "smokescreen". We'll have details in our News Summary in a moment. Jim.

MR. LEHRER: After the News Summary we go to a News Maker interview with Senate Armed Services Committee Chairman Sam Nunn [NEWS MAKER] about his plan to reduce and redesign U.S. spending. Then [FOCUS - THE GOOD EARTH] Spencer Michels reports from San Francisco about Earth Day, David Gergen & Mark Shields [FOCUS - GERGEN & SHIELDS] share their weekly analyses, and we close with a Paul Solman report [FINALLY - FACTORY FIGHT] on a fight to keep factory jobs from leaving Chicago. NEWS SUMMARY

MR. MacNeil: Soviet troops took over another building in Vilnius Lithuania and beat up several people in the process. It followed the Kremlin's decision to cut off oil and sharply reduce natural gas supplies to try to force the Baltic republic to rescind its declaration of independence. We have a report from Moscow by Bill Neely of Independent Television News.

MR. NEELY: Armed Soviet paratroopers forced their way into the printing plant and violently evicted dozens of workers. Twelve were injured and though some were taken to hospital, none were seriously hurt. The 50 or so troops that have now secured the building were ordered in by Moscow to take it from the supporters of independence. A crowd gathered outside; it now numbers several thousand. Inside the parliament, the former Communist leader urged compromise, saying Lithuania couldn't live under these conditions. The blockade is biting, petrol stations have closed. This factory is about to. Its supplies of gas are dwindling daily. Mr. Gorbachev returned to Lenin today, laying a wreath and later praising the old Communist ideals Lithuania has rejected. The Lithuanians will send another delegation to Moscow next week, but so far, no one will see them. They're now facing a political blockade too.

MR. MacNeil: A top Lithuanian official said the Soviet Union has also begun blocking some food shipments. Deputy Prime Minister Romoeldos Ozoletz said the Soviets diverted a shipment of sugar from Cuba as well as a shipment of fish from Latvia. Another Lithuanian official, however, said this was not a major problem because Lithuania produces enough food to feed itself. In Washington, the Soviet ambassador to the U.S. defended the crackdown. He said Americans should consider what their response would be if someone tried to violate the U.S. Constitution.

YURI DUBININ, Ambassador, Soviet Union: If you put yourself in our situation, you would understand all the declarations and all the measures taken by Pres. Gorbachev and by central government and once more we would like to resolve this question specifically, we would like to resolve this question by the way of dialogue, and I think there is nobody else involved who would be more interested to do so as we do.

MR. MacNeil: White House Spokesman Marlin Fitzwater said today that the U.S. has stepped up its contacts with its Western allies on Lithuania. He said a decision on retaliation for the Soviet blockade would not be made until the consultations are complete early next week. Jim.

MR. LEHRER: There was no concrete movement today on the expected hostage release in Lebanon. Assistant Secretary of State John Kelly left a conference in West Germany today for Washington, not Syria, where the Beirut kidnappers demanded he go. Yesterday, the terrorist group, known as the Islamic Jihad for the Liberation of Palestine, said the release of one of three American hostages had been postponed because Kelly did not go to Syria. White House Spokesman Marlin Fitzwater said today that excuse was a smokescreen. "They do it every time," he said. A U.S. hostage reception team arrived in Wiesbauten, West Germany last night in case of a release. A Moslem leader in Lebanon today the release offer is still standing, but the Americans are supposed to make a positive step. At the State Department in Washington, Spokeswoman Margaret Tutwiler reiterated the U.S. position.

MARGARET TUTWILER, State Department: We will discuss the unconditional release of our hostages with any authoritative representative of Iran or others with influence over hostage holders. Amb. DuWidgeon, as you know, is discussing this issue with the government of Syria. The Syrians have said that they are working toward a hostage release hopefully by Saturday or Sunday. We appreciate their efforts and our consultations will continue, but we are not going to acede to the demands of terrorists who continue to hold Americans hostage. Our attitude is the one as enunciated by the president yesterday. We do not negotiate. Our policy is clear, unconditional release, no conditions.

MR. MacNeil: On Capitol Hill today, the chairman of the Senate Armed Services Committee took issue with members of his own party on defense spending. Democratic Sen. Sam Nunn called for a $6 billion cut in Pres. Bush's proposed 1991 spending, a smaller cut than the House and Senate Budget Committees are considering. Yesterday Nunn suggested sharp reductions in nuclear and conventional forces in Europe. We will have a News Maker interview with Sen. Nunn right after the News Summary.

MR. LEHRER: Pete Rose pleaded guilty today to two counts of filing false income tax returns. The former baseball player and manager appeared in a Cincinnati court this morning. He admitted he did not report more than $350,000 in income from personal appearances, gambling, and the sale of memorabilia. Included was $129,000 from the sale of the bat he used to break the all time record for base hits. In a written statement, he blamed an addiction to gambling for his tax problems. In a Los Angeles court today, the family of basketball star Hank Gathers filed a $63.5 million lawsuit against his former coach and university. Gathers died from a heart ailment in collapsing in a game last month. Among other things, the suit alleges Loyola Marymount Coach Paul Westhead asked doctors to reduce the amount of Gathers' medication because it was affecting his play. Westhead has denied that charge.

MR. MacNeil: South African Leader F.W. DeKlerk today said the office of president needs fundamental reform. He said, "As long as so much power is concentrated in the hands of one person, if he is white, then no matter what the rest of the system is, there is white domination. DeKlerk has promised to reform South Africa's constitution so that blacks and whites share power equally.

MR. LEHRER: And that's it for the News Summary tonight. Now it's on to Sen. Sam Nunn on defense, the Earth Day preview, Gergen & Shields, and a Chicago factory's fight to leave town. NEWS MAKER

MR. LEHRER: Sam Nunn is first tonight. The Chairman of the Senate Armed Services Committee has done in the last two days what his friends and critics have been waiting for. He laid out the way he thinks U.S. defense strategy and spending should be adjusted to the new Soviet threat realities, particularly in Europe. In Senate speeches yesterday and today, the Georgia Democrat called for cutting the Bush defense budget by $6 billion this year, making Europe primarily responsible for its own defense, eliminating all land-based nuclear weapons and reducing U.S. troops there by 2/3 to 100,000 or less in five years, reducing the number of strategic nuclear weapons, eliminating two Navy aircraft carrier groups and shifting more personnel in all services to reserve status. Sen. Nunn is with us now for a News Maker interview. Senator, welcome.

SEN. NUNN: I'm delighted you summarized that. I couldn't have done nearly as well.

MR. LEHRER: Well, thank you, sir. Let's go through them one at a time here. You want Europe to take charge of its own defense. Can it do it and is it willing to do it?

SEN. SAM NUNN, Chairman, Armed Services Committee: It can do a lot more than it has done in the past, and I think that under the tremendous change in the threat which has diminished considerably since 1989 and the last part of 1989 included, I think the threat is so different there. The Warsaw Pact has disintegrated, it no longer is a military alliance. The Soviet forces are much reduced from what they were and we have a chance to get down to equal ceilings in the near future in the arms control arena, so all of that makes it much more possible for the Europeans to carry out a much larger share of the defense relatively speaking. I think all of NATO will be able to reduce forces under the conventional arms control agreement, but our forces need to be tailored in a more specialized way so that we don't try to perform everything. In the past, the United States has tried to take one sector. We try to do everything.

MR. LEHRER: You mean one sector of the --

SEN. NUNN: One sector of the geography to defend, and the Germans have defended it. They've tried to do everything, so we've duplicated functions and what I'm advocating, Jim, is for the United States to concentrate more as a mobile reserve force and the Europeans to do more of what we call the defending up front with the heavy anti-tank capability.

MR. LEHRER: Is part of the underpinning of your suggestion based on the fact that the United States has a less stake now than it did before in the defense of Euroe?

SEN. NUNN: No. I gave a long presentation of my assessment of the threat, which was based on the testimony from the CIA and from the DIA and other people here in Washington, and that threat assessment has changed the thinking of all of us that have paid attention to us and it is significantly different. We do not have the kind of advantage in conventional forces in the Soviet Union and the Warsaw Pact that we had in the past. Assuming they continue to make their reductions, assuming they come out of Czechoslovakia and Hungary with a few other assumptions, I think the threat has so substantially changed that we can make some and must make some very serious adjustments in our posture in NATO and the U.S. also.

MR. LEHRER: The serious adjustment that you suggest is to eliminate all land-based nuclear weapons. Now why?

SEN. NUNN: All the short range nuclear weapons.

MR. LEHRER: Short range, yes.

SEN. NUNN: In the INF Treaty we really negotiated away on both sides the medium range missiles. We still have the strategic nuclear missiles, but what I'm suggesting is those ground-based systems in Europe that can only reach because of their limited range either our allied soil which we're trying to defend, or the East German soil, countries like Czechoslovakia and Poland, East Germany, those East European nations, those are no longer militarily necessary, nor are they politically acceptable. In other words, we do not want to blow up the territory that we have sworn to defend, nor do we want to have to threaten to use nuclear weapons against countries that are now friends.

MR. LEHRER: Senator, one of the seldom spoken points about keeping alive a large U.S. presence in Europe has been based on this idea of a new strong unified Germany, and that the U.S. ought to keep a strong presence there to kind of watch Germany on behalf of the rest of the world as well as defend from a possible threat, a diminished threat from Eastern Europe and from the Soviet Union. What's your view of that?

SEN. NUNN: I have a lot more confidence in the future of Germany than those who are so skeptical. I know there's a history there that we have to be aware of. I know the European nations surrounding Germany you have some apprehension. I know there is apprehension in this country, but we've had a good ally for some 40 years. The West Germans are a democracy, and I think we're going to be okay there. I do believe that the United States should keep forces in Europe. I'm not advocating we take all of our forces away. I'm saying that we ought to be planning for a residual force over the next five years of somewhere in the seventy-five to a hundred thousand range. Now that force will be in a different role, but it'll still have a presence there. It will tie the U.S. presence to our overall capabilities, including nuclear weapons, and it will help stabilize relationships.

MR. LEHRER: Now the administration wants that figure to be 195,000. Where's the difference? What are you reading that they're not reading or vice versa?

SEN. NUNN: I don't think the difference is as much as it sounds. I'm talking about over the next five years. They're talking about the one ninety-five to two hundred thousand as the next level of arms control. They've made statements as if that's going to be the ceiling and the floor from now on. I don't take those statements literally but I'm talking a little bit longer term. I'm say've we've got to start planning now for the next five years. If we don't, we won't make much sense out of the '91 budget that we are confronted with at the moment.

MR. LEHRER: Now in the strategic nuclear weapons area, you say some of those can be eliminated and reduced. Which ones?

SEN. NUNN: I think that we ought to make sure that we don't proceed too swiftly on the MX missile. The real mobile part of the MX, putting the MX missile with 10 warheads on a rail, is one that we want to slow down, I do, because I think we're doing too much concurrency. We haven't tested that missile on a rail and yet we're going ahead according to the administration's plan with procurement. One of the principles that I have advocated here in this series of presentations is that we begin to fly before we buy, meaning that we test completely before we go out and start producing and I'm simply applying that principle to the MX missile. We made mistake after mistake in the 1980s because that principle was disregarded, and I think we've got time now and we must take the time to make sure we get the weapons systems correct. So the MX I would slow down. I would also change the Midget Man in terms of the context of it. I think that we have a chance in arms control now for the first time to really move to what I call a more stable regime. The Soviets haven't bought off on that completely yet, but they are talking that way in terms of internal discussions, and that is to get rid of on land the merved or multi-warhead missiles and move towards single warhead missiles. If we do that on both sides, over the next five to ten years, we'll be able to reach a point where we may not have to make the single warheads mobile, because it'll be so stabilizing when you would have to attack with one warhead in order to kill one warhead. There's no advantage to anyone going first, and that's what I mean by stability, making sure that neither side has any incentive to ever use nuclear weapons first.

MR. LEHRER: Do you see a time coming when they won't be needed at all?

SEN. NUNN: I wish we could go back in history, but I don't think we can. I believe that nuclear knowledge is out there now and if we tried to abolish all nuclear weapons, the United States and Soviets would not trust each other. We'd think that somebody might have one in a cave somewhere and then what do you about the Gadhafis of the world or the Iraqs, or those countries that are seeking nuclear power? No, I don't think we can reach that state of nervana.

MR. LEHRER: But when you sat down to, when you went through all this data to assess the threats, how did you come down on the threat of nuclear war in this world, particularly as it involves the United States? What is your own view of what the threat of nuclear war is as we sit here tonight?

SEN. NUNN: I think it's reduced because of what's happened in Europe, because one of the main ways that we could have gotten into a nuclear war was through conventional war in Europe where the Soviets had overwhelming advantage. That's beginning to recede, as I've stated. That makes the chances of having to escalate to nuclear weapons much less in that scenario, so from that point of view, I think the chances of nuclear war have gone down, and we've also had some attitudinal changes in the Soviet Union. So those two things make me breathe a little easier. Now the thing that i do - -

MR. LEHRER: How easy?

SEN. NUNN: Well, you always worry about weapons. I've worried more for a long time about accident miscalculation or a terrorist group getting control of a nuclear weapons, some third country that had a nuclear weapon trying to precipitate a war between the two super powers by attacking one of the super powers without letting the super power know who did it. That kind of thing has always bothered me. Now from that point of view, the instability in the Soviet Union, with all of the ethnic groups there in a state of great turmoil, that causes me more concern, and I would like to see the United States and the Soviet Union both have what I call a fail-safe review of our safety systems. That would have to be done unilaterally. We'd each do it ourselves. We would not share the information, but if we both sat down and internally for the next couple of years looked at every single possibility, that a nuclear weapon could be seized or that it could be in any way discharged without authority, I think that would be probably the most meaningful arms control agreement anyone ever entered into.

MR. LEHRER: Because the idea of the leaders of the United States or the leaders of the Soviet Union sitting down in a room and deciding to launch a nuclear attack against the other you think is all but gone?

SEN. NUNN: I wouldn't say it's gone. We still have to plan for it, we have to deter it, and make sure that no military leader ever walks in and tells a Soviet leader in a confrontation period it's to our advantage to strike first, so we can't write it off, but I think the chances of that happening are greatly diminished.

MR. LEHRER: Why then keep money in the budget, which you suggest, for SDI, the Strategic Defense Initiative?

SEN. NUNN: I think we have to take some action on SDI this year to make some sense out of it.

MR. LEHRER: It doesn't make sense now?

SEN. NUNN: No, it does not. It does not have a strategic rationale. The SDI program --

MR. LEHRER: Then why spend any money on it?

SEN. NUNN: Well, I think the research is a hedge against the Soviets moving in that direction. They already have a missile defense system around Moscow, not very effective, but they have one. And I think a hedge against that kind of technology breakthrough on their part is necessary. We had an SDI program under Carter and under Ford. The thing that changed was that Reagan put a lot more money in it and he described it as a way to eliminate nuclear weapons from the face of the earth. Well, that had a lot of appeal, but nobody believes that in this town that has any technical knowledge at all, and so we've got to go back and look and see what we're really doing with SDI. I believe we should continue some funding, but I certainly do not agree with the increase that the administration has requested.

MR. LEHRER: Quickly, two other things in your plan. Get rid of two carrier groups. Why?

SEN. NUNN: The Soviet Navy has gone more or less into a defensive posture. They've reduced at 15, maybe as much as 20 percent of their deployments around the world. So I think we can relax a little bit with our Navy. That means we should have more Navy ships in reserve. It also means I think we can have less time in terms of deployments. Six months at a time I think is not necessary any longer. I also do not believe we need to take Navy battle groups, meaning the carrier and all the other ships, and go everywhere in the world with those to establish a presence. I think we can establish a presence with less force than that. So for those reasons I think we can cut back some of the cost of the Navy, but the Navy's going to remain and I should emphasize this. One of the most important elements of the continuing American military security, we have interest all over the world, some of our dangers, Korea, Southwest Asia, Persian Gulf, do not relate to the Soviet Union directly.

MR. LEHRER: Now you also want more of our forces put in reserve, rather than an active status. Why?

SEN. NUNN: Well, because we have more warning time. Warning time drives everything. When we had only ten or fifteen days to get ready for a war, and that was based on intelligence assessments in Europe, we had a very hard time allocating very much of what we call the combat mission to the reserve because we simply couldn't get them there in the time. But now that you've got sixty, ninety maybe more days of warning time, minimum by our intelligence assessments, you can afford to put more in reserve. And having them in reserve is much more cost effective.

MR. LEHRER: Senator, your plan, while it calls for in money terms a reduction over what Pres. Bush wants, it's also more than what your Democratic colleagues want. In the Senate, on the Senate Budget Committee, Senate Budget Committee Chairman, at least, and in the House, the Budget Committee has already passed one that calls for deeper cuts. You're at odds with your colleagues. Are you going to fight over this? What's going to happen?

SEN. NUNN: I'm sure we'll have a good debate on the floor, and there will be a number of amendments. I will stick to my position on the floor and if the Senate comes to a different conclusion, then I will try to abide by that and we'll make the cuts that we're required to under the budget resolution.

MR. LEHRER: Did you --

SEN. NUNN: I think we have to have a rationale. I think there are a lot of people in town that are grabbing a number out of the air, and I think we need to have a rationale for what we do. We made a mistake, Jim, after every war. Every drawdown militarily we've ended up going too far and ended up spending more money later on to correct the problem, and more important than that, we've created vacuums that we do not want to create in the world. So we have to avoid I think and we have an opportunity to avoid past mistakes. The difficult thing, and I sympathize with Jim Sasser's position.

MR. LEHRER: He's Chairman of the Senate Finance Committee.

SEN. NUNN: Yes, Senate, and Leon Panetta, who's the House, because they've been told to come up with a budget that cuts 37 billion out. And the administration's budget is full of smoke and mirrors. And any time you have that situation facing you, you're looking for more cuts.

MR. LEHRER: Finally, let me read you a quote from Budget Director Richard Darman. He said it on the Hill today. "As it gets much more clear what it means for particular Congressmen's districts, you'll see the political system, independent of defense strategy start to put a bottom on that defense cut. He's right about that, isn't he?

SEN. NUNN: There's a grain of truth in that and that's the reason I think we have to have a rationale for what we're doing. We have to have a strategy that can help us overcome some of the parochial interests.

MR. LEHRER: And you think you have a better one than the administration?

SEN. NUNN: I don't think there's any opposition now. I think that's the only one in town and I hope it'll stimulate a lot of people, including those in the Pentagon.

MR. LEHRER: You mean, the administration doesn't have one?

SEN. NUNN: They have an '88 strategy, not a 1990 strategy, and things have changed since 1988.

MR. LEHRER: Senator, thank you very much.

SEN. NUNN: Thank you.

MR. MacNeil: Still ahead on the Newshour, the politization of earth day, Gergen & Shields, and a Paul Solman report on a new approach to saving jobs. FOCUS - GERGEN & SHIELDS

MR. MacNeil: It is Friday and that means it is time for our political analysts, Gergen & Shields. David Gergen is editor at large at U.S. News & World Report. Mark Shields is a syndicated columnist with the Washington Post. He joins us tonight from South Bend, Indiana. David, the environment obviously is big news this week, the global warming conference in Washington earlier in the week, Earth Day coming up. How is the environment playing politically in this country, and how is the so-called environmental Presidency playing?

MR. GERGEN: Robin, the environment Presidency is playing well with the general public in part because the public has some anxiety and the President says he's anxious too and in part because the President is not asking people to do very much, asking for many sacrifices, so that seems to go rather down rather well these days. The environment Presidency is not playing well with the environmental community. Increasingly, the activists, people who are going to be sponsoring Earth Day this weekend, are expressing disappointment with the administration and in fact, they are quite embarrassed about the international conference that was held this week with other nations where the United States seemed much less willing to take action on questions of global warming and climate change than were the Japanese and the Europeans.

MR. MacNeil: Mark, what's your answer to the question on how it's playing politically?

MR. SHIELDS: Well, Robin, I think just as Sen. Nunn spoke about the defense questions of 1988, that strategy of 1988 not being effective in 1990, I think the same thing is true. In 1988, it was a very effective political strategy after the Bush campaign to identify with the environmental issue which was of then paramount concern, New Jersey beaches were awash with hospital waste, to use the Boston Harbor against Michael Dukakis, to come out against offshore drilling in California. Important electoral states were at stake. But that translating into concrete leadership, specific proposals, has not followed, and I think the United States right now is a nation full of people who are deeply, genuinely, and in many cases passionately concerned about the environment, not optimistic about it, and yet while that collective concern's there for the sense of individual helplessness, I think it's crying for political leadership and strong leadership on this issue and I think George Bush, I just wonder when he's going to use the political capital that the nation is giving him in these polls.

MR. MacNeil: But, Mark, Democratic leader in the Senate, Sen. Mitchell, said on this program recently that unlike Pres. Reagan, Pres. Bush has agreed to a significant bill on clean air and that it is a major advance even though it isn't everything the environmentalists or even Sen. Mitchell wanted, that it's a significant advance.

MR. SHIELDS: Yes, I think measured against the standard that Ronald Reagan established on the environment that Short would look like a green in 1990 and I think George Mitchell --

MR. MacNeil: Tell us who Short is.

MR. SHIELDS: Short was one of David's early political heroes and inspirations, not a man known for his liberal sensibilities. I think in trying to understand George Mitchell's point of view, he wants to get a bill through. George Mitchell is committed to getting a bill through. The cooperation of the White House, which has been far more cooperative than it was during the Reagan years, the '80s, but I just think that there's a crying need for leadership. What is biodegradable? What is recyclable? I mean, there's a whole host of sort of Presidential questions looking for authority on these issues, and I admit, I think David is right in a very important element, and that is that the environmental issue was popular politically when you had these sort of identifiable villains, these belching smokestacks and these big companies that one could really work a ladder over, and now it does come down to us. I mean, the issue is moving how we ourselves treat our environment, and what we're going to pass on in the form of an environment to our children.

MR. GERGEN: Could I make this point. I think it's veryimportant. I think the President and the Congress do deserve credit for the clean air bill. That's broken an empasse that's been there for well over a decade as you know, but what's interesting and I think striking is to see the gap between where scientists are today, the bulk of scientists, mainstream scientists, about what needs to be done to protect the biased ear and the incrementalism that still exists in Washington.

MR. MacNeil: We had a couple of scientists on this program, both of them claiming to be mainstream, and we disagreed diametrically on whether the evidence is so conclusive that it would justify the kind of action which would be so expensive.

MR. GERGEN: There's no question that scientists basically agree that as we pour carbon dioxide and these other gases into the atmosphere at some point the earth is going to warm. There is disagreement over how rapidly that will happen. Now what the Europeans, in effect, came to Washington and said this week was, look, we don't care about the details, we don't want to wait for the scientific research, we think we ought to move on increasing those carbon dioxide levels. The Japanese came to Washington and said, we'd like to commit to a program of development technology and move right away without waiting for the scientists. The President said, and I think he's right, we need more science, but he said we don't want to act until the science is all in. Others around the world are saying that that's temporizing.

MR. MacNeil: Do you think with the American public that's going to hurt him and hurt the administration and Republicans lose congressional elections coming up?

MR. GERGEN: I don't think it's goign to hurt him politically. I think it raises an interesting question of whether we're even doing the minimum as a nation. I think most mainstream scientists would agree, for instance, that as a minimum it would be good for the country to have a gasoline tax for up to 50 cents a gallon and move gradually toward that area. Of course, the Europeans and Japanese have much stiffer gasoline taxes than we do. We are paying today in this country in real terms less for gasoline than we have at any time since 1918, I mean, our gas taxes are so low. And neither does the President, nor, I might add do the Democrats -- the Democrats haven't shown genuine leadership on that issue either from the environmental point of view, are willing to go that extra mile.

MR. MacNeil: Would you buy that, Mark, that the Democrats aren't way out front on this either?

MR. SHIELDS: I think the Democrats are seen, and accurately so, as a party that is more active and committed on the environment than are the Republicans. Certainly under Ronald Reagan and even under George Bush that remains in the polls. I think David is absolutely right, Robin, in his point about there being very little political risk here. I mean, I think what we're looking at is an opportunity for a real strategy on this issue for the President to assess it, and to say to the American people if we do the following eight, nine, ten things, it is going to be a cleaner, better, healthier world for our kids and for everybody in this American community and the world at large. And I think the American people are willing to follow that kind of leadership, but it's each issue on the environment comes up independently.

MR. MacNeil: David, doesn't think they're willing to follow.

MR. GERGEN: Mark, I would like to agree with you but I have to tell you I think the public is not yet as sensitive to the overall challenge as we need to be. If you talk to the environmental scientists, many of them are now raising alarms and saying we have now a short window, it's a matter of urgency and we have to take very large steps. I think the public is willing to take modest steps. They're willing to stop using disposable diapers. They're willing to turn off the lights, but if you ask the people are they willing to put 50 cents a gallon on a gas tax, there's strong opposition. If you ask them should we give more money to the third world for population control, there is strong opposition to that. If you ask them should we do more to help the third world with deforestation in stopping the cutting of the tropical forest, people aren't willing to put a lot of money into that yet. I think that neither our politicians nor our public are anywhere near as alarmed as a lot of people in the environmental movement.

MR. MacNeil: Let's move on, speaking of strategies, Sen. Nunn said he was the only one to come up with a rationale for cutting, a strategic rationale as to what weapons systems and what personnel you could cut. Mark, what are the politics of that at the moment? Is there any political mileage in being the faster cutter of defense or the slower cutter of defense?

MR. SHIELDS: Well, in Sam Nunn's case, Sam Nunn is chairman of the respected caucus in Washington. The respected caucus are those people about whom anything is written, their name is considered with respected and I always thought it was Sam Nunn's first name for a while, "respected" Sam Nunn, and he just scares the living daylights out of the administration because Sam Nunn is respected. He carries credentials on this issue that supersede and transcend anybody else in Washington, including the respected Les Aspin, chairman of the House Armed Services Committee. When Sam Nunn --

MR. MacNeil: Including the respected Sec. of Defense Dick Cheney?

MR. SHIELDS: Including the respected Sec. of Defense Dick Cheney who is respected genuinely, but when he did, in fact, move on John Tower a year ago, it changed the political dynamic of that nomination of Tower to be Secretary of Defense. Sam Nunn I think was personally responsible for the Democrats winning back control of the Senate in 1986 by offering the credential, sort of an innocence by association, in appearing in behalf of liberal Democratic candidates and saying these guys are okay on defense. So it comes with a real momentum and a real significance and it changes the terms of the debate. It is dealing strategically as opposed to a litany of individual changes that we talked about previously.

MR. MacNeil: How do you feel about that, David?

MR. GERGEN: Let me very quickly put Dick Cheney in the circle of respected.

MR. SHIELDS: I did put him in the circle of respected.

MR. GERGEN: Mark, I think that Cheney, who stood for the idea of caution in regard to the Soviets, there is always a chance that Mr. Gorbachev has iron teeth as we heard some years ago. He's proving to be right in Lithuania and I think he looked pretty good these days, and I would argue that what Cheney has generally done, and what the President had done on defense has been wise. I would argue that changes have occurred since the President submitted his budget. I think Mr. Nunn's right about that. And the new standard in Washington is clearly going to be the Nunn proposal. I think that Washington will now move toward what Sam Nunn has proposed.

MR. MacNeil: Okay. We'll pick this up another time. Mark and David, thank you both for joining us. Jim. FINALLY - FACTORY FIGHT

MR. LEHRER: Finally tonight we look at a most important labor battle, the one over keeping U.S. manufacturing jobs from going abroad to low wage third world countries. Business Correspondent Paul Solman reports on a new tactic in Chicago.

MR. SOLMAN: Bet you haven't heard militant union songs like this for a while, but in the basement of a Chicago church, workers from a 76 year old local firm, Stewart-Warner, which manufactures industrial instruments, have come to make a desperate last stand. They're trying to prevent BTR, the British conglomerate that Stewart-Warner two years ago, from closing their plant down. Among those in attendance are members of Joanna Sullivan's family. These people work at one of Stewart-Warner's two Chicago plants. BTR intends to move the work to Texas and Mexico. Local investors say they want to buy the factory to keep the work in town, but BTR won't sell. So the only hope of keeping the jobs in Chicago seems to be new legislation recently proposed by Alderman Bernie Hanson.

BERNIE HANSON, Chicago Alderman: We have learned that the old methods of saving factory jobs just doesn't work. This time has come to create a new approach.

MR. SOLMAN: The new approach is a legal technique known as eminent domain, which simply means the City of Chicago would seize the Stewart-Warner plant slated for shutdown. Then the city would sell it to local investors. Taking over a plant by eminent domain to keep it in town is a new tactic in the struggle between business and the community. But the struggle, itself, is an old one, pitting two very different economic perspectives against each other. On one side is the company, which shuts a plant because it views the economics narrowly in terms of maximizing its profits, cutting its losses. On the other side is the community. From its larger perspective, closing a plant is a total loss for its employees, for other local businesses, and even for taxpayers like you and me. By using data from previous plant closings, it's possible to calculate what the Stewart-Warner shutdown is likely to cost the community. So first let's look at the loss to employees through the eyes of Joanna Sullivan's clan.

JOANNA SULLIVAN: My sister got everybody in our family a job, cousins, sisters, brother, husband, everyone. My sister got all of us jobs at Stewart-Warner.

MR. SOLMAN: How many of you people altogether?

MS. SULLIVAN: We have here, it's now 47.

MR. SOLMAN: But of the 47 family members who've worked at the plant only 14 are left. Five of them are here at the table. BTR has laid off more than a thousand workers since it took over in 1987.

PATSY ABSTON: Some of them have went to GA, General Assistance and welfare, and some of them are just doing day work or just working day by day on whatever from the Job Corps.

MR. SOLMAN: We asked Joanna Sullivan how many people had found jobs.

MS. SULLIVAN: Not too many. My son, he have a job, but it's not like this.

MR. SOLMAN: It certainly isn't. These people average nearly $10 an hour plus benefits, and how much does Sullivan's son make?

MS. SULLIVAN: I don't know. I didn't ask.

MR. SOLMAN: Well, we asked. Forty-five hours a week as a janitor in this Southside apartment house, no pay at all. He just gets a small apartment to live in and survives on food stamps courtesy of the taxpayer. But afraid of losing even this job and winding up homeless, he backed out of an interview. But at least he has some options, unlike his aunty, Patsy Abston.

MS. ABSTON: Because if I leave Stewart-Warner, if they lay me off today, I cannot go anywhere and get a job.

MR. SOLMAN: Why not?

MS. ABSTON: Because I've had one surgery in January and I've had four on one hand for the past four years, so I have tried to look for jobs and I cannot work because my hands don't work.

MR. SOLMAN: What can you do with your hands, can you move them like this?

MS. ABSTON: Mmm mmm. I can turn them just like that [illustrating]. That's it.

MR. SOLMAN: And that's from Stewart-Warner?

MS. ABSTON: That's from being a press punch operator at Stewart- Warner for the past 24 years.

MR. SOLMAN: And as a result of that, you can't get a job?

MS. ABSTON: I cannot get a job.

MR. SOLMAN: Greg LeRoy has been studying plant closings for years. Some of the most substantive information on laid off workers comes from his Midwest Center for Labor Research.

GREG LEROY, Midwest Center For Labor Research: Effectively all you have among a lot of the senior workers especially is that they not never significantly reenter the work force. Maybe they get casual labor, maybe they go to the underground economy. Maybe they just have defacto retirements and live off the income of relatives and family members.

MR. SOLMAN: Leroy has been calculating the costs of plant closings to the community for years. We asked him to run the numbers for the Stewart-Warner plant. The work force here is mostly female, largely black. Given the past history of similar workers, you can make statistically reliable predictions of how much layoffs here will cost the community over a two year period. First there are the increased costs of maintaining the social safety net. For example, unemployment compensation is likely to cost the government and hence, the taxpayer, an additional $11.18 million. General Assistance or welfare will add another million or so, and then there's the predictable rise in food stamps, another 424,000. In addition to more government spending, layoffs also lead to less government revenue, less local tax revenue, for example. There are fewer and fewer workers to patronize local businesses like the recently defunct Capricorn Beauty Salon or the local bar, Mark & John's.

JOHN CORTOPASSI: Yeah, every time the people get laid off, everybody get hurt, all the businesses get hurt, not only us, around the area, everybody get hurt.

MR. SOLMAN: Like who?

MR. CORTOPASSI: Like the gasoline station, there was another restaurant down the street, there was another tavern down there, and we are the only one left.

MR. SOLMAN: But even Mark & John's is up for sale, it's demise just a matter of time. An old, once vital neighborhood that depended on Stewart-Warner for its economic survival is essentially going out of business. Now according to our tally sheet, the drying up of local business will cost city and state government $6.6 million in decreased revenues over the two year period, and add to that the loss of Illinois state income taxes, 1.9 million and federal taxes, about 13.7 million, since people don't pay income taxes when their income's gone. Emanuel Rhodes is Joanna Sullivan's ex-husband. After 24 years at the plant, he was laid off in November, and his fortunes have sagged dramatically ever since. Rhodes can't find a job and has racked up more than $5,000 in medical bills.

EMANUEL RHODES: Where my bills are going to get paid, I really do not know how because I'm not able to pay 'em.

MR. SOLMAN: Rhodes had to move in here with his daughter when he developed diabetes. Medicare and the Cook County Hospital supported by the government are footing the bill and medical expenses like this corrolate with unemployment.

GREG LEROY: It's typical to have higher rates of stress related diseases, stress related diseases like cardiovascular problems, heart attacks, high blood pressure, ulcers, alcoholism, sirosis of the liver, all those have been shown in higher incidence among chronically unemployed, dislocated workers. You've got higher rates of suicide, spouse abuse, child abuse, mental health admissions, crime.

MR. SOLMAN: Now it's awfully hard to quantify human suffering, but it's clear that all this trauma costs the community and medical costs at least can be translated into dollars. So add Medicaid to the tally, 286,000, and now we can finally sum up. An increase in social safety net spending of 12.9 million, a loss of 22.2 million in taxes, and so the layoffs at Stewart-Warner in the first two years could be estimated to cost the community about $35 million or about 20,000 per worker. But of course the company looks at the economics of moving from an entirely different perspective. For years, Stewart-Warner has been keeping a low media profile, consistently ducking interview requests, afraid to enflame the debate, since a company's always on the defensive when it's leaving town.

ANNOUNCER: [WBBM-TV News Program] The company today announced a long awaited decision to close the plant down.

MR. SOLMAN: But in November, Stewart-Warner issued a press release, explaining in a nutshell the economics of closing its Diversy Street plant.

STEWART-WARNER STATEMENT: Because most of our competitors obatin their products from lower cost areas of the world, we have to move our operations in order to survive.

MR. SOLMAN: And when company president Wes Kiley finally agreed to talk to us, he emphasized the same calculation.

WES KILEY, President, Stewart-Warner: The average rate in our Chicago factory, hourly rate, is approximately $10 an hour. In Texas, we would be paying a couple of dollars an hour less than that and for our assembly operations in Mexico, we'd be paying substantially less than that.

MR. SOLMAN: In fact, Stewart-Warner has for years been moving work from Chicago to the duty free Maciadora region of Mexico along the Texas border. Wages here are about $1 an hour. Since buying Stewart-Warner two years ago, British conglomerate BTR has simply continued the process, because when the company runs the numbers, it figures wage rates plus the cost of running an old plant compared to starting anew in cheaper climbs, and the bottom line is that moving will save the company $17 million a year.

MR. KILEY: I think that just as American industry has to adjust to world competition so society has to adjust to those changes. The idea that we're going to do everything in 1990 the way we did it in 1960 in the same locations, we're kidding ourselves.

MR. SOLMAN: To Kiley & Company, you keep the business competitive by moving, but to the community you preserve jobs by reinvesting by what you've got. And there's now an offer to buy the plant from a corporate lawyer who used to run Chicago's Economic Development Commission, Tim Wright.

TIM WRIGHT, Entrepreneur: They figure that they can milk the company probably all the way up until there's nothing left and then simply dismantle it, and it's gone. And I see a different future before Stewart-Warner. I see a future of new markets. I see a future of new contracts. I see a future of new areas that they have not focused on. I see a dedicated work force and it's going to do all it can to make it work.

MR. SOLMAN: But BTR has refused even to talk to Wright for two reasons.

MR. KILEY: First of all, there's no reason for us to sell the business. We know how to run it to make a profit. But secondly, this man has, I still don't feel it's a legitimate offer. He has no track record in any of this. It's easy to say all those things for publicity in the newspapers.

MR. SOLMAN: BTR won't sell. And that gets us back to the Stewart- Warner rally and the community's current hope, seizing the plant by eminent domain and selling it to a local investor. To Mark Miller, however, editor of Crain's Chicago Business, eminent domain would be economic self-destruction.

MARK MILLER, Editor, Crain's Chicago Business: To me the trouble with eminent domain is that it sends a very negative signal about the business climate of Chicago to the rest of the country and to the world. It says that in Chicago if we don't like the decisions that a company makes, we seize the assets and sell them to somebody else. That is not going to be good for bringing future jobs into Chicago, not only for those who lost their jobs at Stewart-Warner but in Chicago broadly.

MR. SOLMAN: In fact, while we were at his office, Miller was just correcting the copy of his latest editorial, arguing that with eminent domain what you seize is what you get, an old factory on land the free market could put to better use, better to let the plant close.

MR. MILLER: What's going to happen to this property now? The real estate will be sold and redeveloped to some purpose, either industrial, or residential or commercial and likely will go back on the tax rolls.

MR. SOLMAN: Take the Clybourn Corridor in a renovated factory district not far from Stewart-Warner. A shopping mall has moved in, restaurants, there are even some small manufacturers down the block. In other words, goes the argument, a free market economy must clean out the old to make way for the new. The process may be brutal, even unjust, to the community and especially to the employees who lose their jobs, but according to the business argument, that's the price you sometimes have to opay in the difficult process of adaptation to a new world. The community of course disagrees, arguing that adaptation doesn't happen soon enough if it happens at all. This old food processing plant, for example, just a few miles from Stewart-Warner, is still rubble four years after it closed. The change, says the community, is too wrenching, renewal too slow, the price to society just too high. In the final economic analysis, however, it's simply a judgment call. Does the market produce so much more efficiently in the long run that it justifies its short-term brutality, or can people in community manage the economic process more fairly while preserving the dynamism that keeps any economy alive. The analysis varies case by case, but the answer in general reflects basic beliefs, not numbers. RECAP

MR. MacNeil: Once again, Friday's main stories, Soviet troops forcibly took over a Lithuanian printing plant as Moscow's economic blockade of the Baltic republic tightened. The White House called the latest hostage demand of a Beirut terrorist group a smokescreen. In Lebanon, a Muslim leader said the release offer still stands but the U.S. has to make a positive gesture, and former Cincinnati Reds Manager Pete Rose pleaded guilty to filing false income tax returns. Good night, Jim.

MR. LEHRER: Good night, Robin. Have a nice weekend. We'll see you on Monday night. I'm Jim Lehrer. Thank you and good night.