The MacNeil/Lehrer NewsHour

MR. MacNeil: Good evening. The Middle East leads the news this Friday. A U.S. Navy ship fired shots at and boarded an Iraqi tanker, Iraqi troops raided several Western diplomatic compounds in occupied Kuwait, Britain said it would send more troops and military hardware to Saudi Arabia. We'll have details in our News Summary in a moment. Judy Woodruff is in Washington tonight. Judy.

MS. WOODRUFF: On the Newshour tonight the crisis in the Persian Gulf is again our main focus. We have two News Maker interviews. First Charlayne Hunter-Gault talks with the [NEWS MAKER] foreign minister of Iraq, Tariq Aziz. Then we hear from the President's deputy adviser for national security affairs, Robert Gates [NEWS MAKER]. Next, David Souter's second day [FOCUS - MAKING A CASE] of confirmation hearings to become a Supreme Court Justice. Roger Mudd reports. And finally the budget talks and the rest of the week's political developments [FOCUS - GERGEN & SHIELDS] with our Friday analysis team of Gergen & Shields.NEWS SUMMARY

MR. MacNeil: Two events increased tensions in the Middle East today. U.S. and Australian naval ships halted an Iraqi tanker in the Gulf of Oman with warning shots across its bow. A joint U.S.- Australian boarding party inspected the vessel's cargo before allowing it to proceed. It was the third such confrontation since the imposition of a U.N. embargo against Iraq. Also today Iraqi troops in occupied Kuwait raided the diplomatic compounds of French, Canada, and Belgium. A U.S. diplomat was detained in one of the raids. French Pres. Francois Mitterrand called the Iraqi action an aggression and vowed to respond. Pres. Bush said it was outrageous. Speaking to reporters on the White House lawn, he was asked if today's developments brought the situation closer to combat.

PRES. BUSH: I wouldn't put it closer to a war situation. I still hope that this matter can be peacefully resolved, and the way for that to happen is for Iraq to comply with the sanctions. Yes, an American vessel did in accordance with the United Nations resolutions, in accordance with the sanctions, cause another Iraqi vessel to heave to and it has been boarded. But it did require a bit of a warning before the captain pulled over and permitted the boarding party to have a look. Yes.

REPORTER: What can you tell us about the U.S. consul that was detained in the Canadian ambassador's house? Any protest or any action about that?

PRES. BUSH: I don't have all the details on that one, but again I would lump that into the unacceptable action category. I don't have the facts on that. Do you?

SPOKESMAN: They've been released.

PRES. BUSH: They have been released. But any of these incidents, all of them add up to clear violations of international law, and they do raise tensions, they clearly do.

REPORTER: Are you rattling a saber?

PRES. BUSH: I'm not rattling sabers. You're trying to get me to sound like I'm rattling sabers. When I rattle a saber, the man will know it.

MR. MacNeil: The President also repeated his desire to see U.S. troops return home from Saudi Arabia as soon as possible. He said he wanted to quiet what he called mischievous speculation that the United States wants to maintain a permanent military presence in the Gulf. Judy.

MS. WOODRUFF: Britain today announced a major increase in its military involvement in the Gulf. The new deployment will include 120 tanks and 6,000 troops as well as more fighter jets. It is Britain's biggest deployment of heavy armor since World War II. Canada's prime minister, Brian Mulroney, said that he would send a squadron of jet fighters and 450 troops. They will join two Canadian warships and one supply ship which have already been deployed in the Gulf region. In Saudi Arabia today, U.S. troops began practicing with live ammunition. Today's test firings included tanks and heavy machine guns. Since the U.S. forces arrived their five weeks, the Saudi government had opposed the use of live practice rounds. Syria has also agreed to increase its support for the U.S. effort in the Gulf. The news came as Sec. of State Baker met with Syria's president. We have a report from Damascus by James Forlong of Independent Television News.

MR. FORLONG: As Sec. of State James Baker left his hotel in Damascus for talks with Syria's President Assad, it emerged that 15,000 more Syrian troops would shortly be leaving for the Gulf, the importance of Syrian participation underlined by these discussions, the first face to face meeting between an American Secretary of State and President Assad for two years and in a country the U.S. still lists among nations sponsoring terrorism. But despite 4 1/2 talks described as friendly, James Baker made it clear at a news conference afterwards that the issue of terrorism was still a stumbling block.

JAMES BAKER, Secretary of State: We share a common purpose with respect to the problems of the Gulf. But we make no secret about the fact that there are still problems revolving around this question of terrorism.

MR. FORLONG: But then in what appears to be a significant concession, Syria said it was prepared to reopen investigations into those suspected of responsibility for the Lockerbie bombing.

FAROUK AL-SHARA, Foreign Minister, Syria: You have to follow up the Lockerbie incident and whenever it is, it is found that there is genuine evidence or a hard evidence against Jabrille or any other Palestinian faction residing in Syria, then the Syrian government will take the necessary action and they will bring the persons involved to trial.

MR. FORLONG: The talks have shown Syria now wants improved relations with the U.S. and accepts that helping bring to trial those responsible for Lockerbie will be part of the price America demands.

MR. MacNeil: Pres. Bush asked Congress for an additional $1.9 billion to cover what are described as unexpected defense costs from Operation Desert Shield through the end of this month. The measure also includes a legal mechanism for the U.S. to accept financial aid from other countries to help pay for the U.S. military buildup. Japan today pledged an additional $3 billion for the effort. The government had previously promised 1 billion. The money includes emergency loans to Egypt, Jordan, and Turkey to ease economic problems created by compliance with the embargo against Iraq.

MS. WOODRUFF: Iraq has decided to add bread to the list of food items that it will ration. Each Iraqi citizen will be limited to three pieces each day. Rice, sugar, and cooking oil are already rationed. Late last night, the United Nations Security Council adopted an American plan to put tough limits on any foreign food shipments to Iraq. It requires that the food be distributed by the UN and by other international agencies. Iraq's foreign minister, Tariq Aziz, told Charlayne Hunter-Gault in Baghdad today that that was unacceptable. We will have the full interview right after the News Summary. Another planeful of American and British hostages left Kuwait today for London. About 400 Americans were on board. More than 6,000 Westerners remain stranded in Iraq and Kuwait. About half of them are from the U.S. and Britain.

MR. MacNeil: Higher oil prices from the Gulf crisis helped push the inflation rate up last month. Wholesale prices rose 1.3 percent in August, the largest increase in seven months. The government attributed most of the increase to the higher oil costs. Retail sales were down .6 percent in August, despite a big jump in the amount of money Americans spent on gasoline.

MS. WOODRUFF: Judge David Souter promised an open mind if an abortion case again came before the Supreme Court. His comments were made on the second day of hearings before the Senate Judiciary Committee on his nomination to the High Court. Souter refused to comment directly on the Roe Vs. Wade abortion case, but he said he had no personal agenda and that he would listen to both sides if the issue was again brought to the Court. We will have extended excerpts from today's hearing later in the program.

MR. MacNeil: Researchers at the National Institutes of Health just outside Washington began a revolutionary new medical procedure this afternoon. The doctors are using so-called "gene therapy" to treat a four year old girl whose body whose body cannot fight infection or disease. The researchers inserted disease curing genes into her cells. It's the first of what will be monthly treatments over the next two years. The results won't be known for several months. Researchers say if it is successful, it could be used in treating cancer, hemophilia, sickle cell anemia, AIDS, and other diseases.

MS. WOODRUFF: That's it for the News Summary. Just ahead, Iraq's foreign, Tariq Aziz, President Bush's deputy adviser for national security affairs, David Souter's second round with the Senators, and Gergen & Shields. NEWS MAKER

MR. MacNeil: We continue our coverage of the Gulf crisis with two News Maker interviews. The deputy national security adviser Robert Gates will be along in a moment. First we have Charlayne Hunter-Gault's interview from Baghdad with Iraq's foreign minister, Tariq Aziz. It was taped before Iraqi troops moved into several Western embassy compounds and before allied ships fired across the bow and stopped an Iraqi tanker.

MS. HUNTER-GAULT: Can you tell me what is Iraq's position on targeting terrorist attacks against the United States and its "friends" as was reported in the paper here?

TARIQ AZIZ, Foreign Minister, Iraq: Iraq never supported terrorism or terroristic attacks against any country, the United States or any other country, but there is a special situation now in the region thathas to be taken into consideration. The American government has deployed its forces in the region. Other Western countries have joined the Americans in that. And this has created a great popular resentment against it. Now the feelings of the Arab nationalists, the Arab political groups are strongly against this American deployment and people are anticipating that the American administration and its Western allies are going to wage war against Iraq. This has its reactions, psychological reactions, political reactions, and you cannot contain the feelings of the people within the limits the American administration wants to limit the situation here in the region. Therefore, if people fight in their own way against this American and Western presence, that in our interpretation would not be terrorism. It would be a certain sort of struggle against the American aggressive policy vis-a-vis the region.

MS. HUNTER-GAULT: But would Iraq condone or support such actions by its friends or people who are upset by the U.S. presence?

MR. AZIZ: If Arab individuals or Arab political groups struggle against the American military presence in the region, well, we are not going to condemn that because we are not going to condemn it.

MS. HUNTER-GAULT: So you condone it?

MR. AZIZ: Not necessarily. First of all, we have to see what kind of act is going to take place. If it is as we see it in the stream of the struggle against American aggressive policy, we will not condemn it. If people behave in a wrong manner against citizens or, of course, that's not our policy, that's not in conformity with our religious values and with the national values we believe in.

MS. HUNTER-GAULT: It was reported in your newspaper that Iraq feels that this issue of terrorism has been raised to give the United States an excuse for military action. Is that the view of Baghdad?

MR. AZIZ: Well, the American administration is trying to find a lot of executors for its presence. The first excuse was the big lie that Iraq is threatening Saudi Arabia. That was the first excuse that the administration used to deploy its forces in the Arab peninsula and the Gulf. And 'till now, they have not proven that there is such a threat.

MS. HUNTER-GAULT: In your newspaper, the government has been quoted as saying that Baghdad deserves the right to legitimate self defense. Does that include terrorism?

MR. AZIZ: If we are going to be attacked by the American forces, by the Western forces, we would resort to any legitimate means to defend our country, to defend the lives of our people.

MS. HUNTER-GAULT: And terrorism is a legitimate means?

MR. AZIZ: You call it terrorism. You see there is a difference here in interpretation. You call an assault or struggle against an occupier, against an aggressor as terrorism, while people here in this region interpret the American policy as a terroristic policy. We interpret the American presence in the region as terrorism, terrorism to the Iraqi people. The embargo on the Iraqi people is a kind of terrorism when you deny people the right to have food, when you deny the children to have milk, isn't that some sort of terrorism? But you have your own definition of the world. There is a different definition in this part of the world.

MS. HUNTER-GAULT: Following your visit to Iran and the subsequent resumptions of relations between Iraq and Iran, there's a widespread belief in the West at least that this new resumed relationship between Iran and Iraq is a marriage of convenience so that Iraq can avoid or get Iran to break the embargo. What's your comment on that?

MR. AZIZ: We did not discuss those matters which you raised. We discussed the normalization, the political normalization of relations, the re-establishment of the reopening of our embassies in Tehran and Baghdad, and the resumption and continuation of talks and meetings.

MS. HUNTER-GAULT: The U.N. Security Council has voted to allow food supplies in for foreigners stranded in Iraq and Kuwait. Your position up to now has been that outside agencies could not come into Iraq and do that kind of distribution. Has it changed? Would you allow them to come in now?

MR. AZIZ: In this respect, we have always cooperated with international agencies, with the humanitarian agencies. We have very good relations with them, but when this kind of supervision is put in a humiliating manner, we would refuse it.

MS. HUNTER-GAULT: What would be a humiliating manner?

MR. AZIZ: I heard the draft that was prepared by the five last night and then --

MS. HUNTER-GAULT: Five members of the Security Council?

MR. AZIZ: Yes -- and then voted and I concluded that it was humiliating to the Iraqi people.

MS. HUNTER-GAULT: Why?

MR. AZIZ: It would not let any foreign agency to decide whether we are starving or not and therefore to give us food in a sense of charity, we will not accept charity. This --

MS. HUNTER-GAULT: Their argument has --

MR. AZIZ: They should remember that Iraq is Mesopotamia, and five or six thousand years ago, we were the first in the world to cultivate the land, to teach people how to make agriculture, so we are not going to behave as beggars to the humanitarian or to the international agencies in asking for food or for milk for our babies. We would not accept to be treated like that.

MS. HUNTER-GAULT: If the argument is that it is only through these agencies that the United Nations can be sure that the food isn't going to the Iraqi military, what's your response?

MR. AZIZ: Well, that's absurd. Food is a basic humanitarian necessity. Whether the one who consumes the food is a civilian or a soldier it makes in my opinion no difference. You cannot say I'm going to feed Mr. X and I'm going to let Mr. Y starve. This is absurd, therefore, this is not going to work and we will not accept such a kind of treatment. They might have a logical saying, is this kind of food stuff going to be used for human consumption or another purpose? Grain, milk, tea, sugar, et cetera, those basic elements and the Iraqi conception are for human consumption. They cannot be used, as I told jokingly to visitors here who came to discuss this matter, they will not be used in producing chemical weapons. Therefore, if they allow food, then that should be free. If they want to make limits, then this is humiliating to the Iraqi people and we shall not accept it.

MS. HUNTER-GAULT: The U.S. reports Iraq using increasingly hostile measures against Americans in Kuwait, and there are increasing reports from people coming out of Kuwait that the situation is really deteriorating there. Is there going to be any opportunity to have outside observers come in and look at the place anytime soon?

MR. AZIZ: To my knowledge, the situation in the city or the government of Kuwait is getting normal gradually. First of all, there is a change of government. This raises a number of difficulties, but those reports which I hear from a number of Westerners who have left the city are incorrect. They are biased. You know, they were in hiding for awhile and you can imagine that a person who was in hiding would always have negative impression about the situation aroundhim.

MS. HUNTER-GAULT: What about the reports that Iraqi authorities are increasingly pressuring Americans, continuing to round up American men to take to military sites, is that still going on?

MR. AZIZ: Yes, we made it clear, we made it clear that women and children can leave free. The men will stay, the men will stay.

MS. HUNTER-GAULT: Is there any new element or any third party that you would trust at this point to intervene between Iraq and the United States in this matter?

MR. AZIZ: We would prefer direct talks with the United States on the official level. If they would prefer a different sort of exploration we are not against that. It's up to them. Till now they have been making conditions or preconditions unless they do one, two, three, four, five. This is not going to work.

MS. HUNTER-GAULT: Finally, Mr. Minister, this conflict since August the 2nd has been on a roller coaster of ups and downs, close to war, backing away from war, and you've been involved in every second of it. What's your personal sense, your gut feeling at this point, about whether we are closer to war, or farther away from war?

MR. AZIZ: War is an American decision. I haven't been to Washington. I haven't talked to the American officials. The American officials are deliberately vague about that. When they are asked about the military option or the political option, they say let us not limit ourselves with this or that option, which means that they would like to keep the military card in their hands, so it is their decision. Nobody is going to answer your question. Nobody is capable of answering such a question, not in Baghdad, not in Moscow, not in Paris, not in any other capital except Washington, but in this respect, the American administration has to know if it thinks that this is going to be as some commentators or experts said on TV, on the American TV, that that's going to be a surgical operation, an operation of few hours or few days, they are mistaken. This is not going to be a Rambo-like movie or an adventure like that of Panama or Grenada. The situation here is different. Iraq is a very powerful country. Iraq is 18 millions of population. Iraq is strongly determined to fight against aggression, and you should not forget the Arab world. You should not forget the Islamic world. You should not forget the reaction of the people. You started the interview asking about what people might do. There will be a great resentment in the Arab world, in the Islamic world, against such an aggression. There will be a great outrage against it, so this is not going to be a vacation. This is going to be a bloody and very long and very destructive war.

MS. HUNTER-GAULT: Well, Mr. Foreign Minister, thank you for being with us. NEWS MAKER

MR. MacNeil: Now an official American perspective on the crisis in the Gulf. It comes from President Bush's Deputy National Security Adviser Robert Gates. He served as the No. 2 official at the Central Intelligence Agency before assuming his responsibilities in the White House. Mr. Gates, thank you for joining us.

MR. GATES: My pleasure.

MR. MacNeil: Is the Iraqi foreign minister right? Is war an American decision?

ROBERT GATES, Deputy National Security Adviser: Well, I think that the United Nations have placed the unconditional requirements on Iraq to withdraw their forces from Kuwait, to allow restoration of the legitimate government there, and the United Nations have imposed sanctions to try and achieve that goal peacefully, and I would say that we are satisfied that the effort to impose the embargo is going well, and I think that there is the hope that this can be settled in a peaceful manner, that it's the United Nations that are involved in this matter, not just the United States.

MR. MacNeil: The Iraqi foreign minister looked and sounded awfully confident. You and your colleagues in the NSC must be assessing Iraqi morale every day with all the intelligence information you can gather. What does your intelligence say is the real situation in Iraq now?

MR. GATES: Well, most of the information that we have is fairly anecdotal. We have information about bread lines, about shortages of certain kinds of staples, tea, sugar, olive oil and so on, rice. We have reports of significant increases in prices for many other goods. It's hard to assess morale. I think part of the problem is that Iraqi people have not been allowed the opportunity to know exactly what is going on. I think they may not know the number of nations that are arrayed against them. They may not realize the degree of condemnation of the Arab League and the United Nations against them. I think this is one of the reasons why we wanted to take advantage of the opportunity for the President to speak to the Iraqi people to try and bring these facts to them. I think that they are perhaps operating in a vacuum at this point.

MR. MacNeil: What is the longest your experts now figure Saddam Hussein can hold out?

MR. GATES: Oh, I think that no one is in a position really to accurately assess that with any accuracy at this point. As I say, I think we've been pleased at the progress of the implementation of the sanctions. We here in this government, for example, have developed a very intensive effort to monitor these sanctions. We have the capability to identify countries, companies, even individuals who may be trying to evade these sanctions. So the firmer we can make these sanctions, the more effective we can make these sanctions, the more likely we think the chances of a peaceful outcome here. So it's hard to say how long Saddam Hussein can hold out. The real issue is how long it will take Saddam Hussein to come to grips with reality with the number of nations that are arrayed against him and the fact that as the President said the other evening he is going to fail.

MR. MacNeil: The President must be asking you all the time based on the latest information, give me your parameters. What's the soonest you think he'll be forced to give in, and what is the longest you think he could hold out? I mean, are we going to be sitting here six months from now perhaps saying, when will he get out or nine months? What kind of parameters do you give the President?

MR. GATES: Well, I think one of the things that a number of people have been trying to determine are the time lines for various decisions and when Saddam Hussein will fall or when our military buildup may be complete, or when this decision or that decision may come. And first of all, I don't think it's very useful to talk about those time lines. Part of the reason for that is that I don't think people have a precise notion of that. We are constantly evaluating the situation. As I say, the sanctions have really only been in place for two to three weeks. They are beginning to bite. We do have some indications of that. I think we will be watching them over the next several weeks to see how effective we're able to keep them in place and I think that we'll be making decisions as we go along, depending on the circumstances right on the ground.

MR. MacNeil: The U.S. stopped with Australia today, stopped the third ship. There are reports, in fact, the Iraqi foreign minister told Charlayne that Morocco and Algeria were going to send a food ship. Now if that isn't provided for by the United Nations, will U.S. ships stop unauthorized food ships to Iraq?

MR. GATES: Yes, we would.

MR. MacNeil: You would?

MR. GATES: The United Nations early this morning put in place procedures for the U.N. Sanctions Committee to receive applications from countries and charitable groups to send humanitarian food stuffs into Iraq for children and others, and the United Nations will evaluate those requests. The Sanctions Committee and the United Nations Security Council will then decide whether that's warranted and then they'll have the opportunity to monitor the distribution of those goods on the ground in Iraq to make sure they're not going to the Iraqi army. So if they're not complying with the United Nations procedures, yes, they would be stopped.

MR. MacNeil: You heard Mr. Aziz say that Iraq wouldn't obey that, wouldn't let monitors come in.

MR. GATES: Then that's Saddam Hussein's decision, it seems to me. If they want to, provisions have now been put in place to make available humanitarian assistance to those who are truly in need of food, babies, women and children, and so forth, and if Saddam Hussein chooses to fly in the face of the entire United Nations and the procedures that they've set in place, then it's his decision that those people will go without food, not the United Nations.

MR. MacNeil: Would the United States be able to detect with its allies and would it stop under the U.N. embargo any shipments of oil from Iraq to Iran which have been largely reported in the last couple of days as probable?

MR. GATES: Well, I don't think that we have reached that conclusion at this point. We have detected no significant non- compliance by Iran at this point with the sanctions. Their leadership has over the past several weeks indicated its inclination to go along with the U.N. sanctions, so I just think we'll watch the situation on the ground. There's a lot of rhetoric flying around in the region. We'll just keep an eye on what's going on on the ground.

MR. MacNeil: How are you, how do you evaluate the significance of all the warnings and counter warnings about terrorism which Mr. Aziz just added to? What was the U.S. motive in raising it in the first place? Was there something particular that worried you?

MR. GATES: Well, Iraq has had a long relationship with a number of terrorist groups in the Middle East. Several years ago or two or three years ago there was a pause in this. There seemed to be a drawing back from these relationships, but in the last few weeks we have seen these groups once again gravitating to Baghdad. We've received general information that they are considering acting against the United States and others that may be involved in the multinational force in the region, and so we wanted to make sure that the Iraqis understood first of all that we knew this was going on and second that we would hold them accountable.

MR. MacNeil: Do you regard entering the embassies in Kuwait today as a really significant and important turn in events, or just another piece of the harassment of Westerners there?

MR. GATES: Well, I think the important thing is that the Iraqis have shown from the very beginning of this process, of their invasion, a complete disregard for all of the rules of international diplomacy and behavior. They have treated diplomats badly. They have treated the citizens of other countries badly. They have taken hostages. They have attempted to knock down the walls of one or another embassy in Kuwait City. They've cut off power and water and food supplies to most of these embassies. These intrusions clearly are a serious matter. As the President said this afternoon, it's an outrageous behavior on their part, and we clearly are concerned about it. As the President said, it does raise the tensions, but we will be consulting very closely with our allies and looking at the situation in the days to come.

MR. MacNeil: President Mitterrand called it an aggression and called an emergency meeting of his cabinet tomorrow and said he would respond. That suggests the French take it a bit more seriously than you do, is that correct?

MR. GATES: Well, the President talked with President Mitterrand today, they had a good conversation about it, and I think as the President indicated earlier, we will be supportive of the French.

MR. MacNeil: Gen. Schwarzkopf says the force is building up more slowly than planned or expected there. Would you comment on that.

MR. GATES: I think the first thing that needs to be said is that I think the world has never seen anything like the speed and efficiency with which this military deployment has taken place to Saudi Arabia. I think frankly that most of us who have been involved in national security affairs for a number of years have been impressed by how few problems there have been in getting this. If there have been some delays in finding lift capability, I think it's really more in the nature of the size of the buildup than particular problems that may have cropped up.

MR. MacNeil: He says an adequate force instead of early October, more likely middle or late October, is that calculation in Washington, do you --

MR. GATES: Well, I would defer to Gen. Schwarzkopf on that.

MR. MacNeil: Okay. Before, even before this buildup is complete, Gen. Powell yesterday said rotations would be considered as soon as they could, and everywhere he went yesterday, according to press reports and the television film we saw, the troops were saying, when do we go home. Are the conditions there going to require faster rotation than in other theaters?

MR. GATES: I think in some respects I know that we have to take into consideration the concerns of the troops, obviously. The fact remains that most of them have been there a very short time at this point. The buildup, as Gen. Schwarzkopf indicated, is not yet even complete, but we are looking ahead and I'm sure that the Department of Defense will be making plans to have whatever rotations that are necessary to make sure the conditions are all right for the men.

MR. MacNeil: Are there going to be unusual morale problems in this operation? Do you detect those already? I mean, isn't it a bit unusual for ordinary soldiers to be telling a four star general three or four weeks after arrival, when do we go home?

MR. GATES: I think that's a particular characteristic of the American army. I think, in fact, this is not really a problem. We've talked to not only our own officers who have been in the area, but also congressional delegations who have come back to talk to us. And they say morale is just terrific among the troops.

MR. MacNeil: Well, Mr. Yates, thank you for joining us.

MR. GATES: My pleasure.

MS. WOODRUFF: Still ahead, Day two of the Souter hearings and political analysis from Gergen & Shields. FOCUS - MAKING A CASE

MS. WOODRUFF: Next tonight David Souter's second day of testimony before the Senate Judiciary Committee which is considering his nomination to the Supreme Court. Roger Mudd has our extended report.

MR. MUDD: Compared to what the Committee went through with the Robert Bork nomination three years ago, this hearing seems more like a mutual admiration society.

SPOKESMAN: The morning papers, of course, kind of confirm how well you did yesterday.

JUDGE SOUTER: They make me very nervous.

SPOKESMAN: Well, if there's any one thing in this town that a politician respects, if not, in fact, envies, of course, it's very good press. So you passed a very important test.

MR. MUDD: Make no mistake about it, David Souter is getting good reviews, because he and his staff have learned from the Bork hearings. They watched the Bork tapes last summer and this is what they learned. Answer the question without rephrasing the question, never play games with words, show some heart, and never forget that the Senate hearing room is really a TV studio. And when the questioning began today with Sen. Grassley, a fifth Souter rule emerged. Give away as little as possible.

SEN. CHARLES GRASSLEY, [R] Iowa: Judge Souter, those who advocate a greater activist role for the courts say that the broad and spacious terms of the Constitution lend themselves to court made solutions when the political branches fail to act. What is your sense of this perception that the courts rather than the elected branches should take the lead in creating a more just society?

JUDGE SOUTER: I think the proper way to approach that is that courts must accept their own responsibility for making a just society. One of the things that is almost a fact or a law of nature as well as a law of Constitutional growth is that if there is, in fact, a profound social problem, if the Constitution speaks to that, and if the other branches of government do not deal with it, ultimately it does and must land before the bench of the Judiciary. If, in fact, the Congress will face the responsibility that goes with its 14th Amendment power, then by definition there is to that extent not going to be a kind of vacuum of responsibility created in which the courts are going to be forced to take on problems which sometimes in the first instance might better be addressed by the political branches of the government. I guess the law of nature that I'm referring to is simply the law that nature and political responsibility, constitutional responsibility, a poorer vacuum. I've spoken to this point before and I think I alluded to it yesterday.

SEN. GRASSLEY: Are you saying that the Supreme Court should act because there's a vacuum there, or because there's a cause within the Constitution for the Courts to act as opposed to because the political branches have not acted?

JUDGE SOUTER: The Supreme Court should only act and can only act when it has the judicial responsibility under the 14th Amendment or any other section of the Constitution, but the Supreme Court is left to act alone when the political branches do not act beforehand.

MR. MUDD: Republican Sen. Specter of Pennsylvania brought up the War Powers Act, but his specific question was whether Souter thought the Korean War fought without a congressional declaration of war was constitutional.

JUDGE SOUTER: I do think that in approaching the Korean War question, we have to face the fact that it was undoubtedly within the power to commit troops to some degree, in some instance without congressional approval, that, in fact, congressional support was expressed throughout that period by congressional appropriation and by the authorization which Congress thereby expressed, and it's difficult for me to see, although I will rethink this when I have some time to be quite, it's difficult for me to see how the combination of the President's power with that degree of approval and support from Congress could raise a genuine issue of unconstitutionality that would be subject to adjudication.

SEN. ARLEN SPECTER, [R] Pennsylvania: When you talk about appropriations, it isn't realistic for the Congress to stop appropriations at a time when a war is being fought. And if you follow through the logic of your last answer, if you take that kind of implicit approval, then we've read out of the Constitution the congressional authority to declare war.

JUDGE SOUTER: You make the assumption that Congress never has a funding option. Not being a member of Congress, I can't second guess you on that, but that is a position, you never has an option once the troops are committed and engaged, that is an assumption that I would be loathe to make.

MR. MUDD: And finally the case no one seems able to avoid, Roe Vs. Wade, establishing as constitutional the right to an abortion. Leading the questioning, certainly to the dismay of the White House, was not only a Republican but a Republican from Judge Souter's home state, Gordon Humphrey.

SEN. GORDON HUMPHREY, [R] New Hampshire: Judge, you were a member of the board of trustees at the Concord Hospital from 1971 to 1985. In 1973, the trustees voted to begin performing abortions in that hospital. Have you said for the record how you voted on that issue?

JUDGE SOUTER: I think I have. But I voted for the resolution, and my recollection is that the specific terms of the resolution allowed abortion consistent with what was then the new legal era inaugurated in the terms of Roe V. Wade, and if abortions are going to be performed as by law they could be performed, it was appropriate in a non-sectarian hospital to allow the full range of backup services for the safety of the mother and, indeed, for the safety of all participants. And we felt, and I do now feel, the hospital had an obligation to do that.

SEN. HUMPRHEY: So you did not feel in that case that it was appropriate to bring to bear any moral judgment, is that what you're saying?

JUDGE SOUTER: I did not.

SEN. HERBERT KOHL, [D] Wisconsin: Is it fair to state even though you're not prepared to discuss it, understandably, that you do have an opinion on Roe/Wade?

JUDGE SOUTER: I think it would be misleading to say that. I have not got any agenda on what should be done with Roe V. Wade if that case were brought before me. I will listen to both sides of that case. I have not made up my mind and I do not go on the court saying I must go one way or I must go another way.

MR. MUDD: After a lunch break and what must have been a strategy session, Judge Souter returned anxious to explain especially to the TV audience why he has been so unwilling to take a position on current cases.

JUDGE SOUTER: Is there anyone who has not at some point made up his mind on some subject and then later found reason to change or modify it? No one has failed to have that experience. No one has also failed to know that it is much easier to modify an opinion if one has not already stated it convincingly to someone else. And with that in mind, can you imagine the pressure that would be on a judge who had stated an opinion or seemed to have given a commitment in these circumstances to the Senate of the United States and for all practical purposes to the American people? You understand the compromise that that would place upon the judicial capacity.

MR. MUDD: But that did not deter Democrat Kennedy from giving Souter a series of hard pushes on Roe Versus Wade.

SEN. EDWARD KENNEDY, [D] Massachusetts: As a matter of your own individual and personal moral beliefs, do you believe that abortion is moral or immoral?

JUDGE SOUTER: Senator, I'm going respectfully to ask to decline to answer that question for this reason, that whether I do or do not find it moral or immoral will play absolutely no role in any decision I make if I am asked to make it on the question of what weight should or legitimately may be given to the interest which is represented by the abortion decision.

SEN. KENNEDY: But you were willing to express about the morality in the application of the death penalty for individuals who had moral beliefs, and you were willing to express your own moral belief when it came to the questions of white collar crime. Why can't you share with us your view about whether it's moral or immoral or perhaps moral in certain cases and maybe immoral in other kinds of cases? Obviously, you've given a great deal of thought to this. Sandra Day O'Connor responded to that question, Judge.

JUDGE SOUTER: With respect, sir, I do not believe I could do so without creating the impression that I could not give a fair hearing to people whose views might differ from mine on that and I have, I am not familiar with Justice O'Connor's answer on that subject. It may have depended upon prior opinions that she had given. But what I do believe, Senator, is that for me in this forum to start in the most serious discussion even with you to an expression of my views of the morality on that subject would be taken by a substantial number of people as the beginning of a commitment on my part to go in one direction or another.

MR. MUDD: Such testimony caused both Planned Parenthood and the National Abortion Rights League, as expected, to announce this afternoon their opposition to the Souter nomination. The hearings resume on Monday. FOCUS - GERGEN & SHIELDS

MS. WOODRUFF: And now for analysis of the past week's political events, we have our team of Gergen & Shields. That's David Gergen, Editor at Large for U.S. News & Worlds Reports, and Mark Shields, Syndicated Columnist for the Washington Post. One major topic this week is the ongoing talks on the budget between the administration and Democrats and Republicans in Congress. Today Republican Leader Robert Dole went on the floor of the Senate to criticize Democrats for leaking to the press details of the closed talks.

SEN. ROBERT DOLE, Minority Leader: The Washington Post says, "GOP's Tax Proposal Said to Favor the Wealthy.". Then it goes into great detail that the whole question's been about fairness. I mean, they want fairness and we don't want fairness. Every day we complain, every day they apologize, and then the same thing happens, so there's no doubt in my mind there's a deliberate effort by some on the other side, staff or somebody on the other side, in the House and the Senate, to cast this as Republicans for the rich and they're for everybody else. I'm not certain we ought to continue to negotiate on this basis.

MS. WOODRUFF: David Gergen, is that what's going on, there's a deliberate effort on the part of the Democrats to throw something out there that isn't happening?

DAVID GERGEN, U.S. News & World Report: There's no question, I think there have been a lot of harsh words. We saw that in public today. There have been a lot of harsh words in private in the sessions. There've been talks about Sen. Byrd for instance blowing up at some of the people there in the Committee, but Judy, I have totell you, the important thing was that several Senators took the floor today to bash each other over the leaks, particularly the Republicans were very angry about it, but when they got through the criticism, they said, let's go back to work. They went back to Andrews, continuing to negotiate, and what that suggests is I think we're going to get an agreement. I think there are going to be some problems with the agreement, but I still think we're heading toward an agreement.

MS. WOODRUFF: Mark, you predicted a week ago here that you thought we were going to have an agreement. Do you still think so, after all --

MARK SHIELDS, Washington Post: I was a hundred percent right fourteen percent the time, Judy.

MS. WOODRUFF: I don't want to put you on the spot.

MR. SHIELDS: It's good to be reminded of that and it's an exercise in humility to be here. I'll tell you I think that what we saw in Sen. Dole is sort of proof positive of the difference between Ronald Reagan and George Bush. Ronald Reagan was a real revolutionary. He had a radical tax proposal reform in 1986, which was to equalize capital gains tax rate, to lower the tax rates for everybody and to close loopholes. George Bush is a conventional, orthodox Republican, and he's back on the position he wants to cut the tax rate on capital gains below where it was in 1986 law that Ronald Reagan sponsored, which is seen, and rightly so, the direct beneficiaries, Judy, 90 percent of the benefits go to the richest 10 percent of Americans. And that's what the Republicans, Bob Dole, are reacting to are the stories that they're defending this.

MS. WOODRUFF: So you're saying that the leaks are correct, that that's what's going on.

MR. SHIELDS: The leaks are correct. They're accurate on what the proposal has been. To me it's fascinating, because what you have now is the Republicans very much on the defensive, because that sense, the proposal on the board that was reported, on the table, had $50,000 American families paying more in taxes, all right, those families earning $50,000 or less paying more in taxes and those families making $50,000 or more paying less.

MR. GERGEN: I just disagree on a couple of points. First of all, I think the leaks were reprehensible. They agreed to go in and have private talks. Secondly, I think the Republicans are making the right plan. There is no "Republican plan" as such. For the Democrats to take and run with it --

MS. WOODRUFF: Are you saying that the Republicans didn't propose --

MR. GERGEN: The Republicans have put forward capital gains from the beginning. This isn't what this story was all about in the Washington Post today. It's a much broader story, cobbling together a series of ideas that have come forward from a variety of people which do not represent a comprehensive plan. I think the critical thing is this is the kind of issue if you're not careful, if they get too partisan, they will blow this thing up and they will ruin any chances for a negotiation. The Republicans put forward a number of ideas which have been helpful to a lot of people, but the critical thing the Republicans are saying is, look, if you simply put a lot of burden on this economy, you're going to increase the chances of recession. They see the capital gains as a way to help economic growth.

MS. WOODRUFF: And the Democrats say you're helping the rich.

MR. GERGEN: And the Democrats say, look, if you want to do that, let's increase the tax level on the upper income. I think that happens to make a lot of sense, but nonetheless if we're going to try to run with this and try to make partisan points at it, we will not get an agreement.

MR. SHIELDS: The central element in George Bush's economic plan has been capital gains. I mean, that's the point here, and the proposals that the President made the other night in his joint Congressional speech were five new tax cuts which totaled $32 billion according to the Congressional Budget Office over the next five years in lost revenues to the Treasury. So I think it is legitimate. The leaking has been bipartisan. It has not been on one side or the other. We both know that, but what we're talking about is dismantling the Reagan revolution in terms of economic -- to Bush's credit, he ran on this when he was seeking the Republican nomination, he ran on it as the nominee, and it has been his one unyielding, relentless idea. He has championed lower capital gains.

MS. WOODRUFF: Capital gains.

MR. SHIELDS: Well, I want to go back to some other points, because I think we can get lost in the underbrush here if we're not careful, and that is it does seem to me that while we're going to get an agreement, the chances are the agreement will be smaller than what they're talking about. There is a lot of pressure now coming from lobbyists and coming from the back benches and both parties about some of the elements that are being now discussed such as Medicare.

MS. WOODRUFF: Yeah, well, that's what I was going to say, because a week ago there was some optimism they might come out with a 50 billion dollar plan over a year, 250 over five years.

MR. GERGEN: And a 500 billion dollar plan over five years.

MS. WOODRUFF: I'm sorry, 500.

MR. GERGEN: And they did, for instance, begin to reach agreement within the negotiations on some fairly stiff increases in Medicare premiums and payments that would basically fall on a lot of upper income people, people with over $50,000 of income, let's put it that way, and there is a lot of opposition to that, because the people, the Democrats, the liberals who went through the catastrophic problem last time, remember when Congress passed a catastrophic bill, there was huge opposition from the elderly that they rolled it back.

MS. WOODRUFF: So you're saying that same sort of pressure --

MR. GERGEN: That same pressure is building up again. A lot of people see this as another catastrophic plan without the benefits of the catastrophic plan. There is a lot of pressure for instance against not allowing deductions for state and local to be eliminated.

MS. WOODRUFF: Mark, how do we determine whether they're successful or not in whatever they come up with? How do we determine what's a success?

MR. SHIELDS: Well, I think October 1st, if it goes to October 1st and we really do face those automatic, legally imposed threats then I'd say it's been a failure. I don't think there's any question about it. I think that's the consensus on both sides. I mean, Tom Foley --

MS. WOODRUFF: So any package.

MR. SHIELDS: Tom Foley, the Speaker, has said the 28th of September is what he's shooting for. That's only two weeks.

MS. WOODRUFF: So any size package is a success?

MR. GERGEN: No, no.

MR. SHIELDS: No, no, not any size package but I mean, a package - - and what David touched on is very real, Judy, because what you have is sort of a short cutting and a real thwarting of the normal legislative process. What they've done now is say you are representing me and you are representing dozens of me, and the back benches on both parties, and also some of the front benches who aren't there in the budget are really starting to get restless that they are going to get this package that they are going to have to swallow whole.

MR. GERGEN: Briefly, the Government Accounting Office put out a report this week saying our real need is to cut $1 trillion over the next six years from the deficit. This package only will get us there halfway. If they get the package, I think both Mark and I would argue they're going to get a package but it may get us a lot less there than 500.

MS. WOODRUFF: Thank you, gentlemen.

MR. GERGEN: Thank you.

MS. WOODRUFF: David Gergen, Mark Shields, thank you both.

MR. SHIELDS: Thank you, Judy. RECAP

MR. MacNeil: Again, recapping Friday's major stories, a U.S. Navy ship fired on and boarded an Iraqi tanker, but then let it proceed, Iraqi troops raided several Western diplomatic compounds in occupied Kuwait, Britain, Canada, and Syria, announced increases in their military presence in Saudi Arabia. Japan pledged an additional $3 billion to help pay for the Gulf force. And Iraq will begin bread rationing tomorrow. Good night, Judy.

MS. WOODRUFF: Good night, Robin. That's our Newshour tonight. We'll be back Monday night with more on the Souter confirmation. Have a good weekend. Thank you and good night.