The MacNeil/Lehrer NewsHour

INTRO

JIM LEHRER: Good evening. In the news this day, a major earthquake shook a large section of northern California late this afternoon. There are reports it caused much fear, but little damage or injury. The consumer price index, otherwise known as the inflation rate, remained calm and cool. President Reagan said he was going to China for help in holding back the Russians, while the Russians said they did not want to boycott the Los Angeles Olympics. And an American steel company sold out half of itself to its former competitor, the Japanese. Robin?

ROBERT MacNEIL: We'll be exploring the issues behind the Reagan trip with two former senior officials who dealt with China -- Zbigniew Brzezinski and Roger Sullivan. Also tonight, is American labor entering a more aggressive phase? A labor reporter examines the wage campaigns launched today by miners and postal workers. Kwame Holman has a documentary look at new war games to teach U.S. troops how the Soviets fight. Correspondent Charles Krause interviews Nicaraguan leader Daniel Ortega about the contras, the CIA and U.S. policy. We'll also see some unique pictures the astronauts took on their last trip from 300 miles up in space.

A strong earthquake shook northern California and parts of Nevada for about 20 to 30 seconds today. At least 10 people were reported injured in areas south of San Francisco. It caused tall buildings to sway in San Francisco, chipped plaster and rattled dishes over a distance of several hundred miles. Some elevators were stalled in San Francisco, and telephone service was interrupted temporarily in San Jose. The U.S. Geological Survey said the center of the earthquake was about 12 miles east of San Jose, on the Calaveras Fault. It was measured at roughly six on the Richter Scale, which is described as a "severe" earthquake, but not a major one. Bill Skane, the science reporter for public television station KQED, asked several San Franciscans what they felt.

1st SAN FRANCISCAN: It was very, very wavy for about 25 seconds. I was looking out the window and I could see the windows in the opposite side of the building quaking. I thought they were actually going to come out.

2nd SAN FRANCISCAN: I've lived here for 40 years.

BILL SKANE, KQED: How did it compare to other earthquakes?

2nd SAN FRANCISCAN: It's the biggest one I've ever felt.

SKANE: What was different about it?

2nd SAN FRANCISCAN: Well, it seemed to last longer. It slowed down for a little bit, and then it started jumping again. And then it just kept picking up.

SKANE: Did it make you apprehensive?

2nd SAN FRANCISCAN: It scared the hell out of me!

3rd SAN FRANCISCAN: At first it felt -- I thought it was the elevator shaking because we were in the elevator at first. When we got off it sounded as if somebody was playing volleyball all over the building. And I said, "What kind of games are they playing here?" Then we saw the door shaking, and then people all under desks and everything, and somebody said, "Let's get out of here!" Then I realized we were really having a real earthquake.

MacNEIL: The last notable earthquake in California, on January 22nd, shook a 200-mile stretch from San Francisco to San Luis Obispo, halfway to Los Angeles on the Pacific Coast.That one measured 5.25 on the Richter Scale. Jim? Hard Bargaining Ahead

LEHRER: Economic news was everywhere in Washington today. The Labor Department released new inflation figures showing the consumer price index for March rising only 0.2%. That's an annual 5% inflation rate, considered moderate and good by most everyone. The White House called it "very reassuring and further evidence the recovering economy is not overheating." And the Commerce Department said factory orders for durable goods last month increased a modest 0.8%, interpreted as another sign the economy is cooling off, not heating up.

That's apparently how Wall Street real it, too. The Dow Jones industrial average closed up more than 13 points today. But there were two other economic happenings here in Washington, which showed heat may be on the way -- heat at the bargaining table. Leaders of postal workers unions and the coal miners union opened separate negotiations for new labor contracts with strong words of warning to management.

MOE BILLER, American Postal Workers Union: The postal board of governors, the Postal Service board of directors, recently threw the opening pitch, a hardball, when it announced in a policy directive that postal workers generally are compensated too generously for the work they perform, a situation that must be corrected. This is the language of givebacks, and without discussing the details or our bargaining goals, let us say in no uncertain terms, there will be no givebacks.

LEHRER: Later in the afternoon, at another Washington news conference, the United Mine Workers took a similar hard line.

ROY TRUMKA, United Mine Workers of America: One resoundingly clear message has been delivered to us in all of our discussions with the rank and file. The UMWA will not accept any backward steps in contract negotiations.

LEHRER: Despite the tough words, a walkout is not expected from postal workers. As federal employees, they are prohibited from striking. But a walkout remains a real threat from the miners union. They have not renegotiated a contract without striking since 1964. Robin?

MacNEIL: Today's news conferences marked the opening salvo in the first major labor negotiations of 1984. They'll be closely watched by other big unions like the United Auto Workers, which have negotiations coming up. To tell us the mood of the unions this year and what they'll be asking for, we have Merrill Hartson, chief labor correspondent for the Associated Press. Mr. Hartson, what's at issue, first of all, in the postal workers negotiations?

MERRILL HARTSON: Well, the principal issue was articulated by Mr. Biller, when the Postal Service board of governors came in with this statement having to do with what they call pay comparability. Some of the union people are saying that this statement, which was arrived at by the board of governors of the Postal Service in Memphis only two or three weeks ago came as something of a blindside to the unions, which had been saying and telling reporters in this city, back in March and February, earlier this year, that they expected that labor negotiations would be fairly peaceful with the Postal Service. Then surfaced the postal board of governors with reference to the Postal Reorganization Act of 1970 and a reference within that act that calls on the managers of the Postal Service to retain the pay levels for their employees at levels comparable to, not necessarily above or below, to workers who do the same kinds of jobs in private industry. This has angered postal leaders. Mr. Biller's attitude as reflected at the news conference today is reflected by his negotiating colleagues. The same goes for the National Association of Letter Carriers, the second largest union. They tend to be, as I observed today, in a more militant posture than I observed these same two leaders when we discussed this situation in February.

MacNEIL: Does that apply to the mine workers, too?

Mr. HARTSON: The mine workers have stated that they will not accept givebacks in the unionized sector of the coal mining industry. Yes, there is a militant posture there, although the new leader has been untested in this territory. Mr. Trumka came in; he was a successful insurgent in ousting the previous president, who was voted out by the rank and file of the traditionally militant militant United Mine Workers, even though he won pay raises and economic benefits averaging 37 1/2% over three years.

MacNEIL: Do you sense on your beat this new militancy that you've described going right across the labor movement in negotiations that are coming up this year?

Mr. HARTSON: I think it is true. One thing we have to remember is that these two parties, the postal workers and the coal miners, these two sets of workers and their unions, who commence negotiations today, the last time they met was in the spring and summer of 1981. By then, or at that time, we were only in the first stages of a deep recession. The mine workers, as I noted, got a very healthy and lucrative settlement. The postal workers got a more modest settlement. But in both cases, they got pay raises. Now they have been on the sidelines while the contract has been in force -- or their various contracts have been in force over the last 2 1/2 years -- and they've been watching what's going on elsewhere across the frontier of labor relations in the United States, and they seem to be saying, in no uncertain terms today, "Look, this isn't going to happen to us."

MacNEIL: Would it be putting it too strongly to say that with recovery well underway in most sectors of the economy that labor is no longer on the defensive in negotiations this year? Would that be right?

Mr. HARTSON: Alfred Kahn, the former chairman of what was then called the Wage and Price Stability Council, I believe, and also of President Carter's Council of Economic Advisers, refers to what he calls the so-called "basket-case industries." When you isolate some of those industries, such as airlines, the trucking industry, industries particularly that have been deregulated by the government in recent years, it is generally true, I think, that improving economic conditions should signal a greater willingness by unions to resist cutbacks, and perhaps a slack in demand by management for those givebacks. That remains to be seen, though.

MacNEIL: What kind of level of settlements do you expect on the average this year compared with the last couple of years?

Mr. HARTSON: In 1983, in settlements affecting union workers, the average first-year wage gain was 3.3%. That was the lowest in the 15 years the Bureau of Labor Statistics has tracked this kind of trend in labor-management. It also, by the way, was below the even modest, or, what most economists agree was a modest annual rate of inflation of 3.8%. I would suspect this year that you will see some increase in that, but it will not be, I would not think -- they will not be the kind of wage settlements that most economists would call inflationary. Probably settlements in the range of 5%.

MacNEIL: So, do you and your colleagues think that 1984 is going to be a big and important year, a kind of turning-point year, in the cycle of labor negotiations?

Mr. HARTSON: 1984 will be a crucial year in many respects, because several things are at play in the market, several seemingly conflicting things are at play in labor relations. One is, as a result of the long recession of 1981 and 1982, when literally millions of people were laid off, there was a renewed interest expressed by both management and labor, and some of these concepts that have been talked about for years were practiced very little -- concepts such as stock ownership, quality of life, labor-management committees, giving workers a greater say about how the company operates, even electing representatives of workers to boards of directors. That trend has taken hold to a certain extent, although not to a great extent across the spectrum of the economy. The seeming conflict in 1984, given the fact that we've been in what most economists say is a state of economic recovery since the end of 1982, is the extent to which unins will moderate their wage demands and the demands for cost of living formula, other kids of provisions in contracts that prove costly to management, the extent to which they will be willing to moderate that and defer it in exchange for some of these other concepts that have developed which give workers a greater say in how the company runs.

MacNEIL: I see. Well, Mr. Hartson, thank you for joining us.

Mr. HARTSON: Thank you.

MacNEIL: Jim?

LEHRER: One last economic story before we move on to other things. One half of the nation's seventh largest steelmaker, National Steel, has been sold to a Japanese company, Nippon Kokon. National's owner, the National Intergroup, made the announcement in Pittsburgh. They had tried to sell National to U.S. Steel last month, but the deal was called off when the Justice Department objected on antitrust grounds. National was in financial trouble partly because of competition from steel made in Japan by companies like Nippon Kokon, its new partner. Robin? The China Card

MacNEIL: President Reagan flew from Hawaii to Guam today, continuing his gradual progress across the Pacific to China, where he arrives on Thursday. Today, in a speech before leaving Hawaii, the President said his visit represents an opportunity to check Soviet expansionism.

Pres. RONALD REAGAN: We must work with our friends to keep the Pacific truly peaceful, an ocean for commerce, not conflict. Together, we can go forward in a mighty enterprise to build dynamic growth economies and make the world safer by working for peace and opposing expansionist aggression.And that's what our trip to China is all about. We journey to China in a spirit of peace and friendship, realistic about our differences, but desiring to build upon our common interests.

The American people have always held the achievements of Chinese civilization in the highest esteem, and we have the warmest feelings of friendship for the Chinese people. Last January, when Premier Zhao traveled around America, he said he was struck by the warmth the Americans feel toward the Chinese. Well, we go to China to convey this respect and friendship directly to the Chinese people, to hear their hopes and concerns, and to express our readiness to cooperate with China in its ambitious efforts to modernize its economy.

MacNEIL: The President's talks in Peking will be aimed at expanding markets for U.S. goods and discussing what Washington and Peking see as Moscow's threats to stability in the Pacific region. Mr. Reagan said his trip symbolizes "the maturing of a process begun by President Nixon's visit in 1972 and carried on by Presidents Ford and Carter." Jim?

LEHRER: A former U.S. foreign policy maker who sought to balance Soviet power with improved U.S.-Chinese relations was Zbigniew Brzezinski, national security adviser in the Carter administration. He's now a senior adviser at the Georgetown University Center for Strategic and International Studies, and he was in China last month and met with Chinese leaders, including the number-one Chinese leader, Deng Xiaoping.

Mr. Brzezinski, are the United States and China natural allies against the Soviet Union?

ZBIGNIEW BRZEZINSKI: Well, yes, I would say basically so. The Soviet Union is potentially the dominant Eurasian power, the power that could and wishes, perhaps, to dominate the Eurasian continent. And therefore follows that those nations on the extremities of the Eurasian continent, be they in Western Europe or in the Far East, desire to have some counterbalance to Soviet might, and the United States is a logical associate of a China that wishes to be secure and strong and increasingly modernized.

LEHRER: And China, based on the conversation you've had just a few weeks ago, do they see it that way? What kind of role do they want? Do they want to be an ally of the United States? Do they want to be known as pro-American, the whole bit, or what?

Dr. BRZEZINSKI: Well, I have to be precise about that, and let me differentiate a little bit. Several years ago, when Mr. Deng Xiaoping came to the United States, in that historic meeting in the White House with President Carter, he clearly then was seeking an alliance with the United States against Soviet hegemony, which he saw as moving forward, as being very assertive, and the United States excessively passive. Now the Chinese take a more qualified position.When I spoke to him a month or so ago, he stressed to me that China is a leader of the non-aligned world, that of course China does not maintain an equidistance from the United States or the Soviet Union, that it wishes to be closer to us and that it fears Soviet hegemony, but that we, too, are responsible for some of the tensions in the world, for some of the threats to world peace.

LEHRER: What do you say to those who suggest that what the Chinese are actually up to is playing an American card against the Soviet Union? In other words, they really want to make a big deal with the Soviets, and the way to do that is to use the United States' potential alliance as a threat.

Dr. BRZEZINSKI: Well, you know the term, "the China card," which initiated the subsequent term "the American card," is a Soviet invention. And essentially designed to convey the impression that the American-Chinese relationship is tactical, expedient, ephemeral, non-lasting. I happen to believe that China and the United States have continuing, enduring interests in having a good relationship. The Soviet Union is one of these reasons, but not the exclusive reason. China needs to modernize; China has tried to modernize on its own. That did not work too well. China tried to modernize on the Soviet model; that did not work too well. China, I believe now, is seriously committed to a long-term process of modernization in cooperation with the United States, with Japan, with Western Europe. And that creates, I think, a very important bond between us because we, clearly, have a very major stake in stability in the Far East and in China playing a constructive and helpful role.

LEHRER: Is it the kind of thing that could eventually end up in a military alliance of any kind?

Dr. BRZEZINSKI: Well, to put it very bluntly, I think there is a kind of the facto military alliance between the United States and China --

LEHRER: Already?

Dr. BRZEZINSKI: -- already, because if we look at some of the concrete security problems, we are collaborating. First of all, China is threatened by the Soviet Union. Roughly 20% to 25% of the total Soviet defense budget is directed at China. One hundred and thirty-five of the new, triple-warheaded SS-20s are directed against China. Fifty-two Soviet divisions are deployed on the Chinese frontier. So the Chinese need us. But by the same token, we benefit by the fact that China drains that Soviet deployment. The Chinese are opposing actively Vietnamese efforts to expand southward, to deminate Cambodia and to threaten Thailand. We share an interest in that. We and the Chinese, and I'll put it euphemistically, have a tangible interest in the fate of the Afghan freedom fighters, and that, of course, is of importance to us and to them in preventing a Soviet sweep down to the Indian Ocean and the Persian Gulf. So we do have, immediately, now, strategic interests in common.

LEHRER: But you used the word de facto. If, for instance, there was an overt military confrontation of some kind between the Soviet and China on that border, that long border of theirs, the United States is not obligated in any way to come to China's assistance, is it?

Dr. BRZEZINSKI: That is quite true. We are not obligated. But I think we would take a very grave view of any very major Soviet threat to China's security and independence. The Chinese have the wherewithal to handle any frontier affair, any frontier clash. They have the wherewithal to resist a Soviet conventional attack. But I should think that we would not be indifferent if the Soviets tried to subordinate China by force on a large scale.

LEHRER: Thank you. Robin?

MacNEIL: Another major theme of the Reagan trip will be improved trade and economic relations with China. For a preview of that we have Roger Sullivan, executive vice president of the National Council on U.S.-China Trade. Mr. Sullivan served in the Carter administration as deputy assistant secretary of state, and later on in the National Security Council. Mr. Sullivan, how important is this visit from the point of view of trade?

ROGER SULLIVAN: Well, I think it's a very important visit because you cannot separate trade and economic relations from political relationships. We've certainly seen over the past 10 years that our trade and economic relationship rises and falls with the political relationship. And this trip is qualitatively different from any of the previous trips in that it's not just any president going to China; it's Ronald Reagan. Which means this is the end of the China issue as a domestic political issue in the United States.

MacNEIL: You mean even Mr. Nixon didn't end it? And --

Mr. SULLIVAN: No, I don't think he did. I think the whole China issue has been a difficult political issue in the United States, and this trip, symbolically, ends that. I would say, also, that it ends the contention in China over America policy.

MacNEIL: But to spell out a little bit further how it ends the China issue in the United States, do you mean that it removes any lingering political sting from the relationship with Taiwan?

Mr. SULLIVAN: No, I think what I'm saying is that we have now had four presidents, four presidents, with very different constituencies and very different views of the world, and when they have faced the responsibility of running the foreign policy of the United States, they have all concluded that a close relationship with China, both politically and economically, was in the United States' national interest.

MacNEIL: It's been widely rumored -- and Robert MacFarlane, the national security adviser, confirmed this afternoon -- that a nuclear cooperation agreement is all but concluded, and may well be concluded during this trip. How important would that be economically?

Mr. SULLIVAN: That's probably the single most important forward step we could take this year. Most important in the sense that this would have more tangible benefit than any other single agreement I could think of. The reason for that is simple. The Chinese have already said that over the next several years they will spend $8 billion on nuclear plants. In 1984 alone, they will spend $1.8 billion on nuclear plants, so the issue comes down to this. Since the United States has stricter conditions for selling nuclear technology and equipment than any of our allies, that if we sign that agreement -- and if we don't sign it at this top level, I don't think we could sign it at all -- then the United States stands a very good chance of selling $1.8 billion-worth of nuclear equipment to China. If we don't sign that agreement, then those sales will go to France and Japan.

MacNEIL: What other expanding markets for the United States can China offer that could now be exploited, do you think?

Mr. SULLIVAN: Well, there are a number of areas. The Chinese have set a number of priorities in their economic development plan. And, of course, off-shore oil, which is already going forward, electronics, which is going forward, telecommunications, the whole range of high-technology areas, which have become very important to the Chinese. These all happen to be areas in which American industry is highly competitive, and so we expect to see now, particularly since the decision of last June, to move China into the friendly country category for export licensing purposes, that we will see a rapid expansion of that kind of trade with China.

MacNEIL: To what extent could this assist the United States at a time when its balance of trade with the rest of the world is very adverse?

Mr. SULLIVAN: Well, it's helped us a lot already. We are now running a cumulative favorable balance of trade with China of $8 billion, and that certainly helps.

MacNEIL: What else do you expect to happen in this direction during the trip in terms of opening up more and better trade relations?

Mr. SULLIVAN: Well, I don't expect any very specific things to happen on this trip. We know that the President is going to sign a double-taxation agreement, and that's important. But what is really important is that the trip took place at all, that both sides now have agreed that the relationship is on a sound footing and we are now at a high plateau ready to begin again the process of expanding the relationship, not just rebuilding a damaged relationship.

MacNEIL: Well, thank you. Jim?

LEHRER: Dr. Brzezinski, how would you assess the importance of President Reagan's trip?

Dr. BRZEZINSKI: I would agree with what Roger said. I think we are entering now a third major phase in that relationship. Mr. Nixon opened the door; Mr. Carter walked through that door; Mr. Reagan now is building a comprehensive relationship with China which has a political, a strategic and an economic component, and all three are important.

LEHRER: Do you agree with Mr. Sullivan when he says that symbolically, at least, the fact that it's Ronald Reagan ends the China issue as an issue?

Dr. BRZEZINSKI: Well, up to a point, but I would have a qualification rather than a quarrel. It seems to me that on the right there's still going to be opposition. Senator Helms, for example, is organizing difficulties insofar as technology transfer is concerned, and that will continue.But there is something new happening, which is potentially disturbing, and that's on the left. There is now developing a fascination in some sectors of the Democratic Party with the Taiwanese independence movement. And I think there is the potential for a growing interest in the Democratic Party -- on the left, in other words -- in aseparate Taiwan as Taiwan, no longer a government on Taiwan which claims also to be China which we do not recognize, but an independent Taiwanese republic. And any American political interest in that would immediately greatly complicate the American-Chinese relationship.

LEHRER: Do you agree, Mr. Sullivan?

Mr. SULLIVAN: Well, I agree it would, but I think there are two points I'd make. One, I don't think Taiwan will cooperate in that because it's just as important to the people on Taiwan to say there is only one China as it is to the people in Peking.

LEHRER: You mean you don't think the people in Taiwan want to be an independent nation?

Mr. SULLIVAN: I don't think they do.

LEHRER: Even if the Democrats say they should be?

Mr. SULLIVAN: No, I think the people who want to be -- the Taiwanese who say they want to be independent are the students in Japan and the United States. I know a lot of Taiwanese and they say, "If we're not Chinese, what are we?" What they want is -- they want an agreement with China, but what they worry about is the terms of that agreement, and they would like to -- they would like to do the negotiating themselves and not leave that negotiation to the mainland as who'll run the government.

LEHRER: But you don't see this out on the horizon as the same problem that Dr. Brzezinski sees it?

Mr. SULLIVAN: Well, no, and I think that the other point is that, as I said, we've had four presidents and each of them has, when he has faced the responsibility of power, come to the conclusion that a sound relationship with China is important. I think the Democrats would feel the same way once they get back into office again.

LEHRER: Gentlemen, let's look ahead from the China point of view. Most people say -- and I will ask you first of all if you agree -- that Deng Xiaoping is really the man behind a lot of these changes that have brought this new relationship with the United States. Is it a permanent policy, Dr. Brzezinski, or does it go when Dr. -- Deng Xiaoping goes? I started to say "Dr. Brzezinski goes"! But you get the drift.

Dr. BRZEZINSKI: Well there's no doubt that Deng Xiaoping is the preeminent person, and I have been very struck, particularly in the course of my last visit to China, by the extraordinary personal deference with which he's being treated. Much more so than the previous visits. There's no doubt that he is now the dominant political figure.

LEHRER: By whom? Who's doing it?

Dr. BRZEZINSKI: His associates. His semi-peers, who are now are supposed to go and meet with him. They almost kind of rose in their chairs and they said, "You're now about to have a special privilege. You'll be talking to Chairman Deng," and so forth. You know, ephemeral things, but you feel them much more so than in the past. The man is almost 80 --

LEHRER: Excuse me. More so than when Deng Xiaoping was actually here after the Carter visit?

Dr. BRZEZINSKI: Yes, yes.

LEHRER: Is that right?

Dr. BRZEZINSKI: And more so when I saw him twice before in Peking.

LEHRER: Excuse me. Go ahead.

Dr. BRZEZINSKI: The man is almost 80. He looks very well. He seems to be in very good health. He speaks articulately, effectively, with intensity and strength. But there is no doubt that being so strong and so dominant, once he's gone, there is going to be some uncertainty. The people who will succeed him are almost two decades younger -- a decade and a half younger, and they are untried as top leaders. And hence there may be a period of uncertainty. But I would still argue that on balance China's commitment to long-term modernization by opening to the world is an enduring one, and I would say that it is historically as important a development, even more so, as Japan's opening to the world. This is a really profound transformation in China's total relationship with the outside world, and because of that, even if there are some zigzags, I think it will endure.

LEHRER: How do you read that?

Mr. SULLIVAN: Well, I'd agree with that, I think. Certainly Deng is very important, but Zhou Enlai was very important, and Zhou Enlai died and the policy has continued. And I think we should remember that, really, this policy was Zhou Enlai's policy, going way back into the '60s, before it became accepted policy in the government. But it became accepted policy in his lifetime that, first of all, China needed to develop its economy. That had to be its major national goal. Secondly, that that had to be accomplished through trade and technology transfer with the capitalist world and, third, that because the United States is so important in the capitalist world, that that required good relations with the United States. And I think that is so imbedded in the heritage of Zhou Enlai that it will survive Deng's death.

LEHRER: But do both of you agree that we would not be where we are without Deng Xiaoping?

Dr. BRZEZINSKI: Oh, I feel very strongly so.

LEHRER: Do you, Mr. Sullivan?

Mr. SULLIVAN: Oh, I think that's true.

LEHRER: Thank you both very much. Robin?

MacNEIL: Soviet and Afghan troops today overran major guerrilla groups and claimed to have captured the strategic Panjshir Valley. The claim, broadcast by Kabul Radio, could not be independently confirmed. The Soviets have tried unsuccessfully six times in their four-year occupation of Afghanistan to wrest the Valley from guerrilla forces. The Valley controls vital supply routes inside Afghanistan. In Washington the Reagan administration said the latest Soviet offensive for the first time included high-altitude saturation bombing of the Valley. The administration also reported that the rebels had blown up a major bridge on the highway linking Kabul and the Soviet Union.

Preparations for what appeared to be the biggest Soviet campaign of the war indicated that they'd employed 60 to 80 helicopter gunships, hundreds of tanks and armored vehicles, and up to 20,000 soldiers. Such massive Soviet ground attack tactics are the focus of a new method of training the American army here in the United States. We have a report on that training from Kwame Holman. Practice Makes Perfect: War Games

KWAME HOLMAN [voice-over]: On a Saturday morning in March an enemy regiment of 1,200 troops and 130 armored vehicles launched a major attack on a battalion of U.S. forces dug in at the end of a mountain pass. It was a classic Soviet maneuver. Smoke and dust obscured an endless column of tanks and armor rolling relentlessly toward its objective. Mass and speed: the doctrine of Soviet attack.

Lt. Col. JOSEPH STULL, OPFOR Commander: I'll try to maintain the momentum of that attack at all times, and once I establish contact with him, I intend to never release him. I'll either destroy him or run him all the way to Las Vegas.

HOLMAN [voice-over]: The commander of the Soviet army, Lt. Col. Joseph Stull, is also a member of the U.S. Army, and fortunately for the world, his attack took place on a California desert.The U.S. Army was just playing games -- war games; realistic, but not deadly.

Capt. JERRY FARLEIGH: I think this is some of the best training the United States Army has ever devised. It is the most realistic. I would say this is the closest we could get to combat without really firing live bullets at each other.

SOLDIER: That enough? Wrap it one more time around.

HOLMAN [voice-over]: Captain Jerry Farleigh[?] is a tank commander from Ft. Polk, Louisiana. His division was on maneuvers here at the Army's national training center at Ft. Irwin, California. Units training here must fight a resident garrison of GIs who dress like Soviet soldiers and try to fight like they would. They are called the OPFOR, or opposing force.

Lt. Col. STULL: We feel that probably the best thing we can do for our country's Army is be the toughest enemy that the U.S. Army will ever face, regardless of location. If we do that, we figure we have improved the fighting capability of our country's Army.

HOLMAN [voice-over]: Sixteen months ago, the Army issued a grim report concluding that its troops were not fighting very capably. From training observed at Ft. Irwin the report said there was a significant shortfall in important go-to-war skills. The report did cite obvious positive trends, but still showed too many soldiers who couldn't shoot straight, too many officers who couldn't read maps or issue simple commands.

Lt. Col. LARRY WORD, Ft. Irwin staff: The initial reports were accurate. We, as an Army, just had not ever been in a situation like this where task forces were forced to do every single thing that you have to in combat simultaneously. In the past we've had to train piecemeal.

HOLMAN [voice-over]: The Army spent $300 million at Ft. Irwin to end piecemeal training. These comprehensive conventional war games were designed to take the guesswork out of training and to help soldiers learn from their mistakes. Sixty million dollars went into this facility, which can plot every battlefield maneuver on a computer screen. The opposing force, the enemy, in red.The visitors, U.S. forces, in blue. The high-tech training aids of the modern Army. Mountaintop TV cameras scan the battlefield; mobile video vans taped isolated encounters. Squawk boxes relayed the orders of commanders under fire.

COMMANDER: Okay, here comes another [unintelligible]. Take him out. Take him out! Lock on and tail him. Lock on, lock on!

HOLMAN [voice-over]: Opposing force commanders try to give visiting training units a ruthless dose of Soviet-style military maneuvers, the kind U.S. forces could expect if the Soviets invaded Western Europe, where the allies would be outnumbered three to one.

Lt. Col. CLAUDE ABATE, OPFOR commander: The Soviets believe in mass momentum and fire power and echeloning forces into the battle. And they just keep ramming more in. If the first echelon gets annihilated or traded, they don't care; in comes another one. They keep doing that until they affect a penetration in the line.Once they do that, then they call for the horde to come in and bust through and go to the rear.

SOLDIER: We've got one piece through, headed your way. He's coming right by you. He's hit right down in front of me, Victor.

HOLMAN [voice-over]: The battle simulation was made more realistic by a laser-beam targeting system called MILES, the Army's acronym for multiple integrated laser engagement system. If the laser beam on a tank's cannon was aimed accurately, it scored a direct hit, setting off a yellow light on the opponent's tank and taking it out of the battle.

Brig. Gen. THOMAS COLE, Ft. Irwin commander: If two tanks are on the battle-field, we don't have to argue about whether which one shot the other. If he hits him, he's dead. What it really does for us is it gets the soldiers' attention to the battle. We don't have to have somebody come up and say, "Bang, bang," you know, "you're dead." What this does is, if the enemy really shoots you, you really die. You don't die really, but you go down, and it's because the enemy shot you.

HOLMAN [voice-over]: Critics of the MILES approach have said it makes soldiers too cautious, less daring. The commander of the visiting blue force said the criticism is partially justified.

Lt. Col. RANDY HOUSE, visiting force commander: MILES has taught us how to move to keep from getting killed, and that's good, because no longer do soldiers make those -- you know, those John Wayne attacks. There is a tendency, if the commanders let them, into moving too slow, into being so concerned with being killed that they don't get out and move like they have to.

HOLMAN [voice-over]: A senior officer at the national training center said seasoned troops soon learn to hustle again.

Lt. Col. WORD: In combat that's what happens with new troops as well. The first time they get fired at, their tendency is to survive, is to get down. And what we have to teach them, both in combat and in training, is that safety lies in continuing to suppress, continuing to move and continuing to operate as a unit.

COMMANDER: What's your casualties?

SOLDIER: One, sir. Jensen, he's got a lower back wound.

COMMANDER: What? Wounded or what?

SOLDIER: Wounded, yes sir.

HOLMAN [voice-over]: As the units took losses, the surviving and the dead were tabulated in the command and control center. Marksmanship was measured by a computer that recorded every shot fired by a tank or armored vehicle. Commanders' errors became painfully evident. All the data were assembled for playback to the field commanders in what's called an after-action review.

Lt. Col. ROBERT HENDERSON, Ft. Irwin staff: Three hours later the task force auditing the advance sees and hears everything that we saw and heard in here. And we show it right back to them, and then we take the whole battle, the planning, the preparation, the execution, and take it right down the line on the after-action review.

HOLMAN [voice-over]: Lt. Col. Robert Henderson is chief of the command and control center. His staff produced a computerized instant replay of the war game, and relayed it by microwave to blue force commanders in the field. After the post-game show, there were some frank discussions that were off-limits to our cameras.

Lt. Col. HENDERSON: We tell them before they come and when they first get here, "You better have thick skin," but it's good. Ninety-nine percent of the people are willing to listen and learn, and that's our whole mission out here. We've had very good success with it so far.

HOLMAN [voice-over]: On this day the Soviet tactics had failed. The opposing force ran out of mass and momentum, but usually it's the more experienced opposing force that prevails. Still, the emphasis at Ft. Irwin is not on winning.

Brig. Gen. COLE: Winning on the real battlefield is the only thing. Winning and losing is not what we're particularly concentrating on here. We're concentrating on attention to doctrine, learning it the right way. And if we make -- if we depart from or we violate those sort of time-tested principles of war here or anywhere else, that would cause us to lose.

MacNEIL: Regarding a different kind of contest between the U.S. and the Soviet Union,Soviet President Konstantin Chernenko said today that Moscow does not want to boycott the summer Olympics in Los Angeles. At a special meeting of the International Olympic Committee in Lausanne, Switzerland, the Soviets formally charged the U.S. with violating the Olympic charter.They repeated claims that the United States is conducting an anti-Soviet campaign, not providing adequate security and commercializing the games. U.S. representatives said the charges were unfounded. The Russians left the meeting without saying whether they would attend the games or not, but in Moscow, in a meeting with Italian Foreign Minister Giulio Andreotti, President Chernenko said the Soviets did not want to boycott the games if it could be helped.

[Video postcard -- Cedartown, Georgia] Junta Leader: Daniel Ortega Interview

LEHRER: Nicaragua is again in the news today, and our special Central America correspondent, Charles Krause, is again just back from there. Judy Woodruff will handle both developements. Judy?

JUDY WOODRUFF: Jim, in Nicaragua the government is reinforcing its troops near the Honduran border. The Sandinista leadership expects new attacks by the U.S.-supported rebels known as contras. Last week, government troops fought two major battles with the contras, and, according to the Nicaraguan Defense Ministry, 120 rebels and 19 Sandinista soldiers were killed in the fighting. The Nicaraguan government has been pressing its claim that the United States is trying to destroy the Sandinista revolution. Reporter Charles Krause, on assignment for this program, talked Sunday night with the head of the Sandinista government, Commandante Daniel Ortega. Krause asked about American activity directed at Nicaragua, including aerial spying by the CIA.

DANIEL ORTEGA, Coordinator of the Nicaraguan Junta [through interpreter, April 22, 1984]: There has been a continuity of the flights from the bases the United States has in Panamanian territory, flights also which leave from Honduran territory and from Salvadoran territory. These have been continued. We know that the North American government, more specifically the Pentagon, has completely measured to the very last bit of territory for their military purposes, which they can use both for CIA agents and their terrorist activities, such as mining, or they can use for broader actions, such as an invasion by the United States of Nicaragua. That's the point and the goal of these flights, and they intend to keep the information up to date by continuing the flights.

CHARLES KRAUSE, NewsHour correspondent: Well, now, the Reagan administration has justified mining your ports because it says that you are transhipping arms from Nicaragua to the guerrillas in El Salvador. Is your government involved in shipping arms to the guerrillas in El Salvador and providing other assistance to them?

Com. ORTEGA [through interpreter]: We've been very clear so far as affirming that it is not the policy of the Nicaragua government to carry out activities like this transhipment of arms. And our support has been limited to the political areas. In fact, we've been very, very assertive in presenting internationally, both in the United Nations and to the United States, specific proposals to try to find a political solution to the problems of El Salvador.

KRAUSE: What is the Reagan administration's objective with regard to your government?

Com. ORTEGA [through interpreter]: They're trying to destroy the Nicaraguan revolution; that's what they want. Why? Because they do not understand the changes which are being gone through in Nicaragua. These are errors which have been carried out by different administrations, and now this administration is carrying it out again. They do not understand in Latin America the desires of the people, and that's what leads them to carry out an erroneous policy, as in this case. One day the pose one thing, another day another thing. One day they say the problem is the arms trafficking into El Salvador; the next day they say, no, now it's these alleged centers of transmissions. They themselves say publicly that there no longer are arms trafficking, or at least it's diminished considerably. They then say it's not the arms trafficking problem, or the communications the next day, but the Cuban-Soviet presence in Nicaragua. And other times they say it's not the Cuban-Soviet presence in Nicaragua, but another problem. So there is no coherence, and there is no coherence because there's no interest in finding a solution, because what they really have in mind is to destroy the Nicaraguan revolution. The rest are all pretexts. In fact, we even see a chaotic image of the U.S. foreign policy towards Central America.

WOODRUFF: Charles Krause, who conducted that interview with the head of the Nicaraguan government, is with us in Washington. Charles, first of all, they say they're not shipping arms to El Salvador. The U.S. says that they are -- our government says that they are shipping arms. How do we know who's telling the truth?

KRAUSE: Well, Judy, I don't know that we do. It's very hard for a reporter, for an independent observer to know whether or not they are shipping arms. What I can say is that we have talked with representatives of the Salvadoran guerrillas, and they have told us that in fact Nicaragua is one of the countries -- one of the countries in Central America through which they are receiving arms. But Daniel Ortega said, when I asked him about this, that it is not the policy of the government to allow arms to be sent through Nicaragua. So there you are.

WOODRUFF: There was a report today that church leaders in Nicaragua have once again asked the government to sit down and negotiate with the rebels, and that once again the government has said it will not. How can they justify that position?

KRAUSE: Well, the Sandinistas do not recognize the rebels as a legitimate opposition force. They believe that they are purely a creation of the United States and of the CIA. Therefore, it is their position that they won't negotiate with them, and in fact they have said on many occasions that they will negotiate with the United States because it's the United States that has created the contras. I don't think that that's entirely true. I think that some of the contras are legitimate. I think that there is some -- there are sectors in Nicaragua which support them; not many, not the majority, but they have some support.

WOODRUFF: What do you think the Sandinistas would do if the Congress, as it now appears it just might do, decides to cut off aid to the contras fighting the Sandinistas?

KRAUSE: Well, Sunday night I asked Daniel Ortega that question. I had thought maybe he might tell me that they would be willing to make some reciprocal conciliatory gesture if Congress in fact did cut off aid to the contras. He said no, they won't. They've done all that they're going to do, at least for the time being. They feel that in the past, when they have made what they considered to be conciliatory gestures, they were misinterpreted, they were seen as signs of weakness by the administration to justify increased pressure.

WOODRUFF: So you don't think they'd change their policy at all, their attitude?

KRAUSE: At the moment they're watching very closely what Congress will do, and Daniel Ortega would be the first to say that it would be very positive if Congress would in fact cut off aid to the contras. What they will do if that happens remains to be seen. I think one thing that maybe I should point out, at least from my observations in being in Central America, is that I think that the Reagan administration's policy, to some extent, has worked in that I think that the Sandinistas probably have not done some of the things that they might have done had there not been this kind of pressure.

WOODRUFF: For example?

KRAUSE: Well, I think that they certainly at one time were sending arms to the guerrillas in El Salvador. I think even the administration has said at various times over the past couple of years that that has diminished significantly. I think they haven't taken, perhaps, some measures internally that they might have had there not been this kind of pressure on them. But what I want to say is that I think maybe now is the time, based on my conversations with people there, to consider a little bit more of a carrot rather than the stick, because I think that they are worried. I think they're concerned about the possibility of a direct U.S. military intervention in Nicaragua. I think they are kind of in their own way trying to find a way out of this problem, very serious problem that they've got.

WOODRUFF: Are they watching our presidential elections this year, and might a change in leadership have an impact? I know that could be pure speculation on your part, but how much do you think the leadership in the White House has to do with that?

KRAUSE: Well, I think it's not entire speculation, because in fact, after the tapel interview we did with Daniel Ortega, we got into a conversation. He was very curious, asking questions about what's happening politically in the United States. I think they've basically given up on the Reagan administration. They don't think that they're going to be able to reach any kind of understanding. And I think that they would view any of the Democratic candidates as probably an improvement from their point of view. And I think they hope that Central America will become an issue in the presidential campaign.

WOODRUFF: Okay, good. Thank you, Charles Krause.

KRAUSE: Thank you.

WOODRUFF: Robin?

MacNEIL: In the Dominican Republic mobs looted and burned food stores in at least 16 cities in the second day of rioting against higher food prices. Workers from five labor federations walked off their jobs, and sugar cane workers left the big plantations. Eleven people have been killed; more than 100 have been injured, and more than 1,000 have been arrested.

In London, the police siege of the Libyan Embassy went into its second week today. The Libyans sent three officials from Tripoli to help the embassy staff prepare to leave by Sunday, the deadline set by the British. The leader of the Libyan Revolutionary Student Committee was expelled from Britain, and eight other Libyan students were detained for questioning when they tried to enter the country at Heathrow Airport. Philip Hayton of the BBC has a report on what's going on around the Libyan Embassy in St. James's Square.

PHILIP HAYTON, BBC [voice-over]: This evening we were the first journalists to be allowed a peep behind the barricades into St. James's Square. It's still very much as it was when the shooting erupted last Tuesday, although police have strengthened their defenses at the key vantage points facing the embassy. Many people who work in offices around St. James's returned to work today, although beating a path to the office door often took an unorthodox route. Police escorted secretaries and businessmen up ladders and over roofs to avoid using doors which face the embassy. All office workers were warned to stay well away from windows overlooking the Square.

MacNEIL: And authoritative British publication that reports on weapons said today that Iran is in the final stages of making a nuclear bomb. The publication, Jane's Defense Weekly, said the bomb is likely to be ready for use within two years, when West German experts finish building a nuclear power plant in southern Iran. However, United Press International quoted a knowledgeable source in Washington as casting doubt on that timetable. This source said it would take several years to complete the power plant, and several more years to build a bomb.

In Beirut, ceasefire observes completed their movement into a buffer zone along the Green Line separating the Muslim quarter from the Christian quarter after some delay because of sniper fire and shelling. Several disagreements were settled by negotiation in what's hoped to be a first step in setting up a new government of national unity.

Jim?

LEHRER: And, once again, the main stories of the day.An earthquake shook northern California and parts of Nevada, injuring at least 12 people in areas south of San Francisco. The consumer price index showed inflation still in check with the economy not overheating. President Reagan said China could be a big help in thwarting the aggressive ambitions of the Soviet Union. And National Steel, thwarted in its attempt to sell out to U.S. Steel, sold half of itself to a Japanese company.

And, finally, the astronauts of the space shuttle Challenger got together in Houston today to talk about their recent seven-day flight. Like all good tourists, they took pictures while they were away, and today they showed their home movies. The five astronauts took turns narrating. They began with the April 6th launch. Astronauts' Home Movies

ASTRONAUT: The engine is starting. You can see the shock waves come out of the throats of the nozzles; the nozzles vibrate; the engines get up and stable in about six seconds.Solid rocket motors fire, and we're off. And for a new guy doing this the first time it's really a thrill. And that thing feels like being on a rough train while the solid rocket motors are firing. If you all have been on a rough railroad track, that's about what it feels like. And it's a very interesting ride. You can function normally, and right before we lifted off Crip said, "Get ready for the ride of your lives," and he was right. It's the ride of your life.

ASTRONAUT: It's a big thrill on your third time, too. Going through our little activities and getting squared away. That shot shows Doc's with the Linhoff camera we had on board. It's the first time we've flown that. It's got a five-inch by four-inch square format that really makes some nice pictures.

ASTRONAUT: This is letting the bees out of their little house there, kind of -- we did this, oh, a couple of times a day. It was good entertainment, if nothing else, and we were watching their progress on their honeycomb.

ASTRONAUT: We made sure that there was no way there were going to get out of there.

ASTRONAUT: I checked that first thing.

ASTRONAUT: This is a little bit of in-flight repair with the EVA power tool. We weren't programmed to use it inside the vehicle, but it turned out it was a really good way to take off and put on panels so that we could get at some filters inside the vehicle and clean them. And Pinky did most of the work with -- this is just me doing some -- putting some on just for practice.

ASTRONAUT: Well, you know the government runs on paper, and we have to have our teleprinter on board. This is just taking a message out of the teleprinter for the day.

ASTRONAUT: Had to do our daily exercise, like we always do, so we had a treadmill on board and we all spent 10, 20 minutes a day on the treadmill whenever we could find time. This is the guy we called Oscar. This was the third spacesuit we had on board to show you what -- it's kind of a demonstration here of just how easy it is to move things around. This weighs about 375 pounds.

ASTRONAUT: This is where the guy said, "Oh, that feels good, keep --

ASTRONAUT: The spacesuit comes in, basically, about four pieces there. You take his pants off and he's got two gloves and a hat.

ASTRONAUT: This is a bank shot by Crip.

CRIP: Trying to get my eggs in my mouth.

ASTRONAUT: You do tend to eat in space like you do on the ground. Almost.

ASTRONAUT: Almost.

ASTRONAUT: Some of us do.

ASTRONAUT: Land shark. This guy's got all the dried fruit in the pantry.

ASTRONAUT: Nobody else seemed to like it. It was very good.

ASTRONAUT: At least I ate -- in space I ate like I do on the ground.

ASTRONAUT: So did I, too.

LEHRER: Good night, Robin.

MacNEIL: Good night, Jim. That's our NewsHour tonight. We'll be back tomorrow night. I'm Robert MacNeil. Good night.