The MacNeil/Lehrer NewsHour

Intro

ROBERT MacNEIL: Good evening. Taxes and deficits dominated the political dialogue again today. Treasury Secretary Regan said the economy is poised for the best year in 30 years. He categorically denied that the administration plans a tax increase. In Rome, two Iranian hijackers surrendered and released more than 300 hostages aboard a jumbo jet. Vietnam veterans told a federal court that a $180-million Agent Orange settlement isn't enough. Jim?

JIM LEHRER: The hour tonight is built on and around three pro-con debates on the why and how to reform taxes, between a Republican and a Democrat who see it differently; on expanded funding for cleaning up toxic waste sites, between a congressman and a chemical company executive who see it differently; and on the wisdom of bringing the World's Fair to New Orleans, between two people in New Orleans who disagree. Also, some thoughts from Boston sportswriter Jack Craig on the great summer obsession, watching the Olympics on television.Tax Reform: Republicans vs. Democrats

MacNEIL: Treasury Secretary Donald Regan gave the Congress an even rosier picture of economic recovery today, but ran into another wrangle over deficits and taxes. Appearing before the congressional Joint Economic Committee, Secretary Regan said the economy was poised for the biggest year of growth since 1951. Revised estimates showed that the gross national product would grow by 7.2% rather than the 5.9% estimated earlier. Coupled with that, Regan said, the unemployment rate would fall to 6.8% by the last quarter of the year, with inflation running at 4.4% in the same quarter. he said interest rates would rise further toward the end of the year, but they didn't seem to be hurting the economy.

On taxes, the secretary added to the growing dialogue between the administration and the Democrats. He said more categorically than anyone else that the administration would not raise taxes next year.

DONALD REGAN, Secretary of the Treasury: There are no plans for tax increases in 1985. I'll repeat it again, Mr. Chairman. There are no plans for tax increases in 1985 by this administration. Any and all talk of tax increases by this administration, secret, open or otherwise, are untrue and uninformed.

MacNEIL: The administration has said it will focus its attention on spending cuts rather than tax increases. That brought about a partisan exchange between Secretary Regan and Congressman Lee Hamilton, a Democrat.

Rep. LEE HAMILTON, (D) Indiana: If it is the position of this administration that you're going to get us towards a balanced budget by cutting spending, then the responsible position, it seems to me, is to tell us exactly where you're going to cut spending, what programs you're going to cut, and how much you're going to cut them by so that the American people then can make a judgment in November between your program and the program put forward by the Democratic Party.

Sec. REGAN: As you know, the Grace Commission has made quite a few recommendations, and even if the -- some of theirs were based upon an inflation factor that was more prevalent in 1982 than is prevalent in 1984, nonetheless, those suggestions are out there. About 17% of their suggestions have already been adopted by this Congress and the administration, and a total savings of $40 billion. I would suggest there's a lot more right there in that area that can be done. And the second comment is more of a political one. If the administration is being asked, I think the same thing applies to the candidate of the other party, who is charging that he can cut deficits by two-thirds, to also indicate where and which taxes he would raise.

Rep. HAMILTON: He's been very specific about tax increases, but the point this morning --

Sec. REGAN: The burden falls equally on candidates.

Rep. HAMILTON: The point this morning, Mr. Secretary, is Mr. Mondale is not before us, and you are.

Sec. REGAN: I understand. And I indicated to you that at the appropriate time when budgets are called for annually, we'll come up and show you where the cuts are if we can get the Congress to go along with us.

MacNEIL: Secretary Regan also pointed the finger at the Congress for the growing federal deficit, and once again Congressman Hamilton took exception.

Sec. REGAN: The United States Congress has had the budget authority all these years, and they're the ones that have wracked up these deficits. And they will continue to --

Rep. HAMILTON: Mr. Secretary, now, wait a minute.

Sec. REGAN: They don't get --

Rep. HAMILTON: Now, wait a minute.

Sec. REGAN: -- It under control.

Rep. HAMILTON: Now, wait a minute. Not one dime is spent under the Constitution of the United States without the approval of the Congress and the president. Don't tell me it's only the Congress that wracks up the deficit.

Sec. REGAN: That's absolutely correct, sir, that the President has to accept these things or else bring a -- an entire government to its knees, because we have to carry on these essential functions.

Rep. HAMILTON: Well, then the president bears responsibility for those deficits. This President, past presidents, just as much as the Congress.

Sec. REGAN: But you'll also admit that the Congress accepts the first responsibility for them, because they originate them.

Rep. HAMILTON: I admit that the Congress accepts the responsibility. What I object to is your saying that it's the sole r sponsibility of the Congress.

Sec. REGAN: Well, then if the Congress would give the President the right to have a line-item veto so he could go through some of these things that he doesn't want and knock it out, but the Congress has consistently refused to use the line-item -- or allow the President to use the line-item veto.

Rep. HAMILTON: Now let's get back to my question on your spending cuts --

Sec. REGAN: I beg your pardon?

Rep. HAMILTON: -- Mr. Secretary. Let's get back --

Sec. REGAN: Well! All I'm suggesting is that by our very interchange here, opinions, that this is a complicated problem.

MacNEIL: Meanwhile, in another part of the Congress, Paul Volcker, chairman of the Federal Reserve Board, was uttering another warning about the deficits. He told the House Foreign Affairs Committee that the deficits were hurting the international debt situation. He said the single most important contribution Congress could make to easing the current world debt crisis would be further cuts in the budget deficit.

Walter Mondale continued his attack on the size of the deficit. Campaigning in Ashville, North Carolina, Mondale told several thousand people in a farmers market that the Reagan dificit had crippled American farm exports by raising the value of the U.S. dollar. "It's like giving foreign competitors a 30% subsidy," he said. He also charged that the Reagan administration had set out to destroy the farm subsidy program, and said. "That's exactly what they've done." Mondale also continued hammering at his claim that the administration plans to raise taxes. "It's not a question whether taxes will go up. They will. The question is, who will pay them?"

Jim?

LEHRER: And, on taxes, as was noted here last night and any other night the subject comes up, everybody is in favor of tax reform. The disagreement obviously is always over whose and what gets reformed. Tomorrow the Senate Finance Committee resumes hearings on several of the who's and what's. Two of the best-known and most-pushed being the so-called "fair tax" and the so-called "fast tax." Both eliminate many tax deductions and lower basic tax rates, but, as we're about to see, there are major differences. The fast tax is considered mostly a Republican proposal, and its key sponsor in the Senate is Senator Robert Kasten, Republican of Wisconsin. The fair tax is mostly a Democratic measure, and its House author is Congressman Richard Gephart, Democrat of Missouri. First to you, Senator Kasten, on the Capitol tonight. Give us the fast explanation of your fast tax, please, sir.

Sen. ROBERT KASTEN: Well, first of all, I think it's important to recognize that both the Bradley-Gephardt and the Kemp-Kasten proposal are trying to go in the same direction, and that is the tax system we've got today is just simply unacceptable. We've got 5,000 and some-odd pages of tax law, an additional 10,000 pages of interpretations of that law. Most people can't fill out their tax forms, and people are just fed up. So what we need to do is to have a simple tax system. Essentially what we're doing is we're saying cap the top rate at 25% across the board, have only a few very important deductions --

LEHRER: Like what?

Sen. KASTEN: Mortgage interest for your homes, for example.

LEHRER: All right.

Sen. KASTEN: And charitable contributions, state and local taxes -- a couple of key deductions. And then get rid of all the loopholes, all this junk that we've tacked onto the tax system. And I believe that this effort right now is developing almost a groundswell of support because we're seeing people that are fed up with the system that we've got right now and they're demanding change.

LEHRER: Well, Senator, the Joint -- the staff of the Joint Economic Committee of Congress says that your proposal that you just outlined would cut taxes for the upper-income people 15%, raise taxes for middle-income people two to three percent. Is that correct?

Sen. KASTEN: Well, we don't agree with those -- with those estimates. But I think in general you could say that any time we have a -- some kind of an across-the-board flat tax, whether it's at 30%, which is Bradley-Gephardt, or 25%, which is Kemp-Kasten, or 10%, which is Hall-Rabushka, out of the Hoover Institution, but we just got a letter today saying -- from the group that you quote in the Joint Economic Committee -- said, "We've been reluctant to publish anything more than very tentative estimates of the impact of these and similar bills because the data on such estimates would be based -- the data would be based on estimates which are very crude. So right now I think it's too early to -- we don't believe that the impact would be exactly as the Economic Committee points out. and one thing they didn't point out, which I think is important to recognize, that we knock off from the bottom, from the lower brackets, almost 1 1/2 million individuals who now pay taxes. Under the Kemp-Kasten program, we're trying to deal with the problems of working families, and particularly initial-entry jobs for working poor. Right now in our system we've got an almost an impediment for people to take that first initial-entry job. People today pay taxes after making roughly $8,500. Under our program, they'd go to an income -- a family of four would go to an income of $14,375 before they would pay their first dollar of tax. What we're trying to do, in other words, is to encourage that first job. We want to put the bottom rung on the ladder, if you will, and then people can go up. So we're also pro-family in that we double the personal exemption -- right now it's $1,000 -- double it to $2,000. It hasn't gone up for years, and clearly inflation has gone up. So we've doubled the personal exemption. We have the incentives for earned income, and we've put people into the working, rather than the welfare and government assistance group of people.

LEHRER: All right, Congressman Gephardt, First, what do you think of the fast-tax idea?

Rep. RICHARD GEPHARDT: Well, first, there are many similarities, as the senator said, between these proposals, but there are also some important differences. You've already touched on one of them, and that is the bracket or the rate structure. We both take out a lot of loopholes and go to a simpler rate system. Our rate system is three brackets, 14% for four out of five Americans, or for dollers between $0 and $40,000 a year of income for a husband and wife; we have a 26% rate on dollars between $40,000 and $60,000, and then a 30% rate on dollars above $60,000 a year. We feel this is a fairer tax because it really keeps everybody where they are now. It keeps the level of progressivity we have in today's tax system. I feel that Kemp-Kasten would, as you pointed out, hurt the middle class, would be better for people at the top end of the ladder and, as the Senator just said, it would be better for people at the lower end because they start people paying taxes at about $14,000 a year; we start them paying at about $11,000 a year. So we feel we're better for the middle class.

LEHRER: What do you do about deductions?

Rep. GEPHARDT: We essentially keep the same deductions.We keep the charitable deduction, the deduction for home mortgage interest and for real property taxes, for individual retirement accounts and for municipal bonds. There is an important other difference, though, on capital gains. They index the property in capital gains, and we do not. So we wind up taxing capital gains exactly as you would earned income, which we think is an important change to make in our tax system.

LEHRER: How were you lucky enough to get yours labeled a fair tax? Why is it fairer than the fast tax?

Rep. GEPHARDT: Well, it's always in the eye of the beholder, but we really feel that we've tried to write a fair tax system, one that retains progressivity, but most importantly one that puts taxpayers earning a more or less equal amount of money on equal footing. We just think it's wrong that two taxpayers making the same amount of money under today's code can pay very different tax bills. And so we think this is a better way to go about it.

Sen. KASTEN: I think Dick is right.I'd like to just point out that we talk about these names.We got FAST, F-A-S-T, by saying "fair and simple tax." So neither one of us are giving up on fairness or on simplicity. But I think what's important when we look at the differences is that we have preserved a number of the incentives for savings as well. In other words, the IRA accounts, the Keogh accounts. And I think it's important that when you look at these programs you look at the incentives for savings in this country. That's something that we want to encourage.

LEHRER: Congressman, from your perspective, from the Democratic perspective, is Walter Mondale committed to the fair tax as you just outlined it that you and Senator Bradley are sponsoring?

Rep. GEPHARDT: I think he's committed to this kind of a tax system. He's not endorsed any bill. There are a number of bills out there, and they have difference in their specifics, as we pointed out.

LEHRER: You asked him to? Do you expect him to?

Rep. GEPHARDT: No, I don't think that's important. I think what's important is that before the election he tell us what kind of a tax system he'd like to move to, and I would hope the President would do the same thing. I think it's unfortunate the President has put off his tax study until December of this year. I think the voters really need to understand what he intends to do.

LEHRER: Is he right about that, Senator?

Sen. KASTEN: Well, I think we're going to see, first of all, in the Republican platform, I believe we're going to endorse something very close to the FAST tax, to the fair and simple tax. The Democrats had this discussion in their platform, and for one reason or another it was dropped out, although there are references.

LEHRER: What about President Reagan, though? Is he going to endorse your FAST tax?

Sen. KASTEN: I think the President is already talking about the necessity for a fair and simple tax, and I think he's just a -- just a step away from a flat-out endorsement of this particular program. I think we're going to see something very close to an endorsement of a fair and simple tax by the President during the campaign. But first we're going to write it into the platform.

LEHRER: Congressman, is it all just talk of a summer of a presidential election, or do you really expect there to be reform this time?

Rep. GEPHARDT: I think the American people really want reform in their tax system. It's the most powerful issue --

LEHRER: Yeah, but that wasn't the question. Do you think there really is going to be --

Rep. GEPHARDT: I do, because of that reason. I think there is tremendous grassroots support for it. I also think that when you get into the budget next year that whoever is elected president will have to have a tax increase along with expenditure cuts in order to solve the deficit problem. So I think you've got a procedural context in which tax reform can actually be a reality as part of that whole budgetary fix.

LEHRER: Do you agree, Sanator?

Sen. KASTEN: I think we clearly have the atmosphere now, not necessarily in Washington yet, but out in the neighborhoods -- I know in Wisconsin, across the country, for a fair and simple tax, for some kind of basic reform. I think the atmosphere is right, and I think it's important to point out, as we talk about the deficit, we don't need tax increases; we need spending reductions. But if we adopt either Bradley-Gephardt or Kemp-Kasten, or some kind of a compromise, we are going to see more people complying, more people paying taxes. Treasury has come before Dick's committee, the Ways and Means Committee, and said that there are roughly $100 billion of unpaid taxes out there because people are using loopholes, aren't reporting, etc., etc. If we had a fair and a simple system that people agreed with, we would pick up in the neighborhood of $100 billion, said the Treasury, of additional tax revenue, simply by having a system that works.

LEHRER: But, gentlemen, beginning with you, Congressman, behind every loophole there is a special interest. That's the reason that loophole is there in the first place. Are you suggesting that all these special interests are going to go away and let you all reform the bill and do away with their goodies?

Rep. GEPHARDT: They're going to fight, and they're going to fight hard. And I expect that, but I also believe that there is tremendous grassroots desire for this to happen. I also believe that many of the people that have enjoyed loopholes also view the interests of the whole and the need to have a tax system that people can have faith in again. And I've heard from taxpayers who said, "I hate to give up my deduction, but if you can lower my rate in the process of doing this, then I can do it because --

LEHRER: But you're really not going to end up lowering their rate. People aren't going to pay that much less in taxes. There's just going to be a simpler process, correct?

Rep. GEPHARDT: Well, under Bradley-Gephardt we feel that four out of five individual Americans would have some kind of a tax cut.Now, obviously that means that one out of five are going to have a tax increase. They are the people that are most heavily sheltered and leveraged under the present tax system. But the majority of people will experience some kind of a tax cut.

LEHRER: What about under Kemp-Kasten?

Sen. KASTEN: We're trying to make our program roughly revenue-neutral.Revenue-neutral in terms of the total dollars raised, and also revenue-neutral among income groups, except for the very lowest group, where I pointed out before we're trying to work with the working poor. But I think that the key to this is the concern and the understanding that the American people have. Washington reacts, and I think right this minute people out there are angry and they're mad. They're tired of a system that they don't trust, and they're tired of all these special advantages for these different groups of people.So I think we've got a great opportunity. It's important that this debate continues throughout the presidential campaign, and then next year we're going to get to work and we are going to have some kind of a fair and simple tax, a flat tax system.

LEHRER: All right, Senator Kasten, thank you; Congressman Gephardt, thank you. Robin?

MacNEIL: Going overseas, in Rome two Iranian hijackers freed over 300 hostages and surrendered to Italian police today. After the government of France refused permission to land in Paris. The Iranian Airbus jet was diverted last night during a flight carrying Muslims from Teheran for the annual pilgrimmage to Mecca in Saudi Arabia. The plane arrived in Rome near midday after stops at the island of Bahrain in the Persian Gulf and at Cairo. Shortly afterwards, the hijackers released 129 passengers, including 44 children and a number of women wearing black Muslim robes. These passengers said there were two hijackes armed with a pistol and a hand grenade. Two other groups were released as the day went on, and finally all the remaining passengers came off the plane with the two hijackers mingling with the crowd. Eventually they turned themselves over to the police, who began to question them to find out if anyone else on the plane had been involved. There were no injuries to the passengers or the crew.

In Israel, Prime Minister Yitzhak Shamir's Likud bloc was reported to have insisted that he continue as prime minister if a national unity government is formed. Likud came in second in the national election last month, and Shimon Peres, whose Labor Party finished first, has been asked to form a government. However, neither Labor nor Likud has enough votes in Parliament to form a majority, and neither has been able to create a majority by linking up with smaller parties. Today delegates for both groups met for four hours to discuss the conditions for forming a government together. But there was no sign any progress had been made.

Jim?

LEHRER: Vietnam veterans and their lawyers expressed themselves today on the $180-million Agent Orange settlement. They appeared before federal judge Jack Weinstein in New York, one of five hearings he's scheduled on the much-debated agreement. Lawyers for veterans and seven chemical companies reached it last May. It would end the class-action suit against the companies brought by veterans charging Agent Orange, a herbicide used as a defoliant in Vietnam, caused them serious permanent health problems. Today's hearing was closed to television cameras, but here is a sampling of opinion we did outside the courtroom.

JAMES BURDGE, Vietnam Veterans of America: It's not enough money. Figure with $180 million divided between all the veterans, each veteran will wind up with about, approximately $2,000 per veteran. And I've spent more than that on gas and traveling expenses and newspapers since this started. And it's not enough to take care of my three birth-defected children.

DAVE MARTIN, Vietnam Veterans Coalition: We want our side of the case to be told, and we want Dow Chemical and the rest of them to try and repudiate our claims and our allegations, and yeah, we want this evidence to come out. We want the scientific and medical community to listen to whatever Dow Chemicals lawyers present as evidence that it doesn't cause any ill effects, and we just want it to come out in the light of day instead of being locked up in vaults, you know, for eternity.

ROBERT SUTTON, veteran: I'm against the settlement. I think it stinks. Quite frankly. It stinks! One hundred and eighty million dollars is a drop in the bucket. It is not going to cover anything. Never mind -- it won't cover one generation, $180 million. Watch how they start cutting it up.

FRANK McCARTHY, Agent Orange Victims International: The settlement is the best possible deal we could have made, for one. For two, $180 million in a public trust fund is going to save lives of veterans. It's going to be able to help them with programs and services that directly affect their lives. When somebody tells me that this is chump change, I get enraged, because it's $180 million, and you put that $180 million to work to help the people that are affected, you're going to save a lot of lives. You're going to help a lot of kids. You're going to get out medical information to stop the guys from getting cancer before they get it and it's too late for them.

FRANK ROXBY, Veterans of Vietnam War: I have a son, he's 14 years old now. He was born with birth defects. And by settling now I figure maybe I could give him a couple more years on his life with scientific tests, medical help or whatever you have. For myself, I have mine. I've already been told that if I live to the be the age -- to the age of 40 I'll be lucky. I'm 38 years old now.

REPORTER: Do you think that the settlement was fair, though?

Mr. ROXBY: I think it's about as fair as we could get right now.

REPORTER: Procedurally, what happens, sir, if the judge does overturn the settlement.

DAVID DEAN, veterans' attorney: Then we'll go to work and we'll try the case. We're ready to try the case. This case was settled, as you recall, on the very day -- very day that a jury was selected. And of course we are ready to try the case. As we were then, we are now.

LEHRER: The other hearings will be in Chicago, Atlanta, Houston and San Francisco. Then Judge Weinstein will decide whether to approve the settlement, and if he doesn't it will be tried incourt. The chemical companies, while agreeing to settle, deny Agent Orange was responsible for illnesses more serious than skin rashes. Robin?

MacNEIL: Still to come on tonight's NewsHour, are Democrats playing politics with the Superfund? We have a debate between Congressman James Florio and the president of Exxon Chemical Company. The New Orleans World's Fair: why is it such a big disappointment to its host city? And we close with an essay by Boston sportswriter Jack Craig on television coverage of the Olympic games.

[Video postcard -- Florelce Junction, Arizona]

MacNEIL: Nine Northeastern states today asked a federal judge to force the Reagan administration to take action on the acid rain issue before the November election. The states asked Federal Judge Norma Johnson in Whshington to order the Environmental Protection Agency to make a decision on reducing sulphur dioxide emissions from coal-fired power plants in seven Midwestern states. The Northeastern states filed a petition with the EPA in 1981. Today New York state's Assistant Attorney General David Wooley said, "We've waited more than two years. I think it's clear that only a court order will prompt him to do it."

Jim? Raising the Ante on Toxic Clean-Up

LEHRER: The House of Representatives votes on funding for the Superfund tomorrow, and the word is out that much more than simply cleaning up toxic waste dumps is involved this time. Judy Woodruff has more. Judy?

JUDY WOODRUFF: Jim, the House vote is on legislation that expands and toughens the Superfund. The bill raises the toxic waste clean-up fund from its current $1.6-billion level to $10.2 billion by 1989. Most of that $8.6-billion increase would come from a tax on the chemical industry. The proposed legislation would also put the Environmental Protection Agency on a strict timetable for cleaning up hundreds of what it considers the most dangerous chemical dump sites in the country. So far the EPA has only cleaned up six sites completely. We hear now from the chief architect of the new Superfund bill, Democratic Congressman James Florio of New Jersey. Congressman Florio joins us tonight from Capitol Hill.

Congressman, first of all, why such a big increase in money? Why is that much more needed for the Superfund?

Rep. JAMES FLORIO: Well, I don't think anyone had a full appreciation of the magnitude of the job four years ago. As you point out, only six sites have been cleaned up out of 22,000 that exist in the country. Over and above that, the record of EPA has not been good in enforcing the law, so this increase is designed to provide more money, but it's also designed to tighten up on some of the looseness of the procedures that has allowed EPA not to go forward in a very expeditious way.

WOODRUFF: But now all of this money, as we've pointed out, is not federal tax dollars. In fact, it's, what, only 20%. It has been, as I understand it, until now just 12 1/2%. Why are you increasing the federal tax dollar share of the Superfund?

Rep. FLORIO: Well, what we're doing is increasing, as you point out, from $1.6 billion over a five-year period to about $10.1 billion. So there's a fairly substantial increase on industry that pays the lion's share, and there's also a proportional increase in the general revenues share as well.

WOODRUFF: But, again, it's a six-fold increase. Why so much more?

Rep. FLORIO: Well, what we're talking about is cleaning up. There wasn't expectation there were going to be 22,000 sites when this bill was passed some four years ago. We have now found out the job is much more significant and is much more difficult to achieve. And, over and above that, we've effectively wasted four years, that we have this $1.6 billion that jas bought us, as you indicate, only six clean-ups. Now, we're hopeful that a new EPA, and with some new people in it, will not experience the same problems that we had when Mrs. Burford was there and Mrs. Lavelle was there. But the fact of the matter is we've wasted four years, and time has resulted in the problem being more accelerated.

WOODRUFF: As you know, though, EPA officials are going around saying that they can't possibly use up as much money as you're talking about giving them.

Rep. FLORIO: Well, I just wish that EPA officials would spend as much time out cleaning up waste as they are up lobbying against this bill. I'd feel a little more sympathetic to EPA if they hadn't worked to cut their own resources over the last four years. And then, of course, they come forward and say, "Well, we haven't got the resources to utilize these amounts of monies that you're talking about." I think it's important that we get these monies for clean-up, but then we restore the purchasing power of EPA to utilize these monies effectively.

WOODRUFF: You're saying you really know more about what's going on in the agency than they do?

Rep. FLORIO: Well, I don't think anybody acknowledges the fact that EPA has done a very good job in the last four years. So the answer is, yes, I think we do know what it is that they need to do, what the law is requiring them to do.

WOODRUFF: What do you think the most important changes in the law would be if this bill were passed?

Rep. FLORIO: Well, I think there's two. One is the question of a schedule, that we put EPA on a fairly rigid schedule to ensure that we're not here four years from now saying they've only cleaned up another six. So we're providing them with a schedule, and then we're spelling out some standards with regard to the question of how clean is clean, that we don't want them spending all this money and then acknowledging that this is supposed to be clean under their somewhat subjective standards. What we are doing is spelling out the standards so that we can be sure -- the taxpayers can be sure -- that when we've put this money into the sites and the sites are now clean that they are really clean, up to some objective, measurable standards.

WOODRUFF: All right, you know the bill -- as we know, the bill doesn't actually expire. The law doesn't expire, rather, until next year. What's the rush? Why are you in such a hurry to have it reenacted now?

Rep. FLORIO: Well, everyone, almost without exception, says that there's going to have to be an extension and a substantial expansion. And to wait until, as the administration wants to, to wait until next year when the bill actually expires, on the first of October, 1985, is then going to call upon EPA to be geared up, ready to have a much more expanded program. And we think that, in the interest of efficiency and good management practice, we should pass the bill now. EPA then will have a full year to gear themselves up to get the resources to be able to spend this money in a cost-effective way.

WOODRUFF: Congressman Florio, we'll come back to you. Robin?

MacNEIL: Aside from the Reagan administration, the leading opponent of the new Superfund bill has been the chemical industry. Their fight on Capitol Hill has been led by the Chemical Manufacturers Association, whose chairman is Edwin Holmer. Mr. Holmer is also president of the Exxon ChemicalCompany.

What are your main objections to the new bill?

EDWIN HOLMER: Well, as you may know, the chemical industry for the last several years has been a strong supporter of a vigorous clean-up of the waste sites in this country, and it's very natural that we take that position. Because, although we are accountable for less than half of the hazardous waste put in these sites, the public feels that we are responsible. And when the public feels that way, it's incumbent upon us to get moving and to get these things cleaned up. We have also been for a reauthorization, consistently. And we have testified before the Congress repeatedly --

MacNEIL: Which the Reagan administration is not at the moment.

Mr. HOLMER: I won't talk for the administration. I will now talk for our association.

MacNEIL: Sure.

Mr. HOLMER: We have felt that reauthorization is absolutely necessary. It's very obvious that more time will be required to clean up these sites. And we have advocated doubling the current fund. We have advocated spreading the tax base more equitably, because it's very narrowly based now.And since the EPA under Mr. Ruckelshaus' leadership have demonstrated increasing momentum during the 14 months that he's been leading this organization, we feel that the law, which is very complex already, should remain unchanged in all respects. Now, this law, this bill proposes to increase the taxing by sixfold over the current level. We see no logic whatsoever in such a huge increase. We are convinced the EPA cannot nearly effectively spend that money. It'll have two effects. One, it'll have a serious economic impact on that narrow segment of the chemical industry that is bearing these taxes. And part of the industry is just now coming out of a very difficult period, and just getting on its feet. And, secondly, we feel EPA activity will be slowed rather than sped up. And I would like to quote just a brief quote from testimony that EPA gave to the House Ways and Means Committee the other day. They said, "It is imperative that any legislation designed to reauthorize Superfund be crafted in such a way as to build on the momentum already achieved. Unfortunately, this would not be the case with HR 5640. I am concerned" -- still quoting -- "that the bill currently before this committee could actually bring to a halt the progress we have been achieving."

MacNEIL: What about the burden that this bill would place on the chemical industry? You mentioned that some parts of it would be financially hurt. Do you think it is fair for the chemical industry to pay for the clean-up when, as you pointed out, the chemical industry only deposits half of the contents of these dump sites?

Mr. HOLMER: Yes. In fact, we feel that the deposits under landfills, which is the most serious part of this whole very serious situation that we'd all like to get cleaned up, the industry -- chemical industry accounts for about one-third of that total. So it's very broadly based. It's been going on for 40 or 50 years with many industries participating.Yet the tax falls not only primarily on the chemical industry, but on a very narrow segment of the industry -- the petrochemical industry because this is a feed stock oriented tax.

MacNEIL: What does feed stock mean?

Mr. HOLMER: Feed stocks are the basic building blocks of all chemicals that are made by cracking or converting portions of petroleum to these reactive elements that are then combined --

MacNEIL: The raw materials, the chemical --

Mr. HOLMER: The chemical raw materials.

MacNEIL: Some people who oppose this bill in your community, in your side of the industry, charge that this is really just politics, this rush to get it done now. What is your view of that?

Mr. HOLMER: We have been, as an association, indifferent as to whether the bill be reauthorized this year or next year, because we're more concerned with the content of the bill. But it was the intent of Congress, in all its wisdom, in 1980, that charged EPA with carrying out a serious study of the performance and the future funding and methods of funding, and to have that study available for the Congress on December 11, 1984, in order to provide plenty of time for due deliberation in the Congress before this thing expires on the first of October of 1985. Obviously the House is in a huge rush. I'm not a political expert, you understand, but it does seem rather politically motivated to me.

MacNEIL: Congressman Florio?

Rep. FLORIO: Well, the CMA, as I understand it, is on record now as supporting reauthorization this year. I trust they haven't changed their mind recently. Over and above that, the studies, for the most part, are finished. EPA has conveyed to us their position that $8- to $16 billion will be necessary in the next five years. There are some other studies that we have had access to. There isn't any question about the fact that this is going to be needed. We know what it is that's going to be needed. Is it a large increase? Of course it's a large increase. The question then is whether it's going to cost us much more not to address this problem, and I think the answer is clearly yes. I think when we point to the record under the new administration of EPA, when we use this figure os six sites being cleaned up in the last four years, it's interesting to note those six sites were cleaned up under Mrs. Burford. There haven't been any sites that have been cleaned up in the last year under the new administration.

MacNEIL: What about Mr. Holmer's point that, among his several points, first of all that's it's unfair to put such a large burden on part of the chemical industry? You heard his argument.

Rep. FLORIO: Yeah, well, we heard those arguments, and the fact of the matter is the chemical industry signed off four years ago on this whole allocation with 88% of the Superfund to be assessed against the chemical and the petrochemical industry. The rationale is that all of our chemical wastes come from the feed stocks, as was indicated. The building blocks of all of our chemical wastes. And that in fact that is an appropriate place to put the greatest burden because that is where the problem has come from.

MacNEIL: Mr. Holmer?

Mr. HOLMER: Well, the economic impact on the industry -- Mr. Florio feels this is probably mere rhetoric. The rhetoric has been that we've lost 50,000 jobs in the last two years in our industry. We have suffered a $5-billion deterioriation in foreign trade. We are convinced that the quadrupling of this tax on feed stocks are going to have serious impacts on both our local domestic industry and on our foreign trade. So it's not a academic, rhetorical thing.

MacNEIL: Congressman?

Rep. FLORIO: Well, the only point I can make is that the 12 companies that we've made reference to are doing extremely well, if someone wants to take a look at the profit margins. Likewise, the last study I saw was that there was a 17% negative tax rate at the federal level for those companies. That's to say that they really don't pay federal corporate tax, and in fact get something like a 17% return. So I'm not -- I'm not here at this point to be arguing the well-being of those companies. I think it's something that we have come to appreciate -- that those companies have contributed to the problem. They are, commendably, not doing at this point, from this point prospectively.

MacNEIL: What about Mr. Holmer's point that the EPA, which also says it can't spend that much money?

Rep. FLORIO: Well, the fact is that what they're saying now is that they don't support the bill. They don't support any bill. Then they come forward and say that they can't utilize the money effectively and they're going to slow down. First of all, they can't slow down any more than they are now. They're at inertia.But over and above that, As I said. I would feel much more sympathetic if they hadn't caused these problems on themselves by cutting their own budget over the last four years to the point where, in terms of absolute dollars, they are at a funding level at EPA that is below the last Carter administration funding level in terms of their capability to enforce the environmental laws. This is the first step of having this Superfund expanded, and then the next step -- and this is the purpose for dealing with it this year rather than next year -- is to increase the budget allocation to EPA so that they have the resources and the personnel to implement this law.

MacNEIL: Mr. Holmer?

Mr. HOLMER: I don't think that's a fair representation of what the EPA is doing at all under the administration of Ruckelshaus during the last 14 months. The "only cleaned up six sites" issue is a distortion of the true facts. The fact of the matter is that every site is complex, every site is individual. It takes on the average of 3 1/2 to four years to thoroughly analyze and get site clean-up in progress. Since this program has only been going 3 1/2 years, how could anybody expect more than six sites to be cleaned up? The fact of the matter is that literally hundreds of sites are now under investigation. Every one of the curves of EPA that talks about assessment, feasibility studies are sweeping up like this, and the progress is actually very commendable.

MacNEIL: Well, gentlemen, we'll have to leave this tonight, and see how the vote goes in the House tomorrow. Congressman Florio, thank you for joining us; Mr. Holmer, thank you. Jim?

Mr. HOLMER: Thank you.

LEHRER: A Chicago official caught in the FBI's Operation Greylord received a 10-year prison term today. Associate Judge John Murphy was convicted of mail fraud, racketeering and extortion. At today's sentencing, U.S. District Judge Charles Kerkoris[?] said, "Murphy became an infidel to the cause of justice." Murphy maintained, as he had throughout his trial, that he was innocent. He told the court, "I can show no remorse when I've done nothing to be remorseful for." Operation Greylord was an FBI probe of the Chicago criminal justice system, the nation's largest. So far there have been 17 indictments.

And now it's the jury's turn in the John DeLorean trial in Los Angeles. Deliberations started today after the judge told the jurors to consider the law and their common sense in deciding if the former automaker is guilty of charges he dealt in cocaine. In his instructions to the jury the judge said that if they found DeLorean did it but that he acted as a victim of government entrapment, then they should find him not guilty.

Robin?

MacNEIL: Here in New York, the head of a city agency that supervises daycare centers resigned today in the midst of a growing scandal over alleged sexual abuse of children. Commissioner James Krauskopf resigned from the city's Human Resources Administration less than 24 hours after the resignation of the director of the agency's Division of Special Services for Children. The resignations came after at least 30 children at one daycare center said they had been molested by members of the staff. At another center nearby, six parents have filed complaints.

[Video postcard -- Wahweap, Arizona] World's Fair: Unfair to New Orleans?

MacNEIL: Our next story comes from our urban beat and concerns the controversy over this year's World's Fair being held in New Orleans. For almost 10 years the city's business and civic leaders have been anticipating the fair's opening and hoping it would give a boost to tourism.

[voice-over] Tourism, after all, is big business in New Orleans. Everyone has heard of Mardi Gras, but the biggest party this side of Rio only lasts a few days of the year. The World's Fair was needed, supporters said, to keep hotel rooms occupied, to pump fresh money into other area businesses, and to remind the world that New Orleans is a great place to visit. So far the world doesn't seem to be getting the message. Attendance is far below the break-even mark. Tourists are spending money, but local merchants aren't seeing the profits they anticipated. High admission prices -- $15 for adults and as much as $14 for children -- have kept many potential customers away. And although attendance has improved lately, there's little chance the fair will ever make a profit. The fair itself, built on the city's waterfront, has certainly been expensive to mount. The official price tag is $350 million, with most of it coming from private sources.But private money wasn't enough. The state has twice had to bail the fair out with multimillion-dollar loan guarantees.

[on camera] The state bailout added fuel to the controversy of whether the fair was ever a good idea for New Orleans. Neighborhood groups say the fair has diverted resources from solving the city's real problems, but business leaders say the city as a whole has benefitted from the fair. It's a debate that we hear more of now. Jim?

LEHRER: And we're going to hear it from two people with strong differing opinions about it, Mike Valentino, president of the Greater New Orleans Hotel and Motel Owners Association, and Geraldine Bell, president of the Louisiana chapter of ACORN, the Association of Community Organizations for Reform Now. They're both with us tonight from New Orleans.

Ms. Bell, is the fair a failure in your eyes?

GERALDINE BELL: Yes, it is, as far as financial reasons go.

LEHRER: Is it a failure -- even if it had made money would it still have been failure to you?

Ms. BELL: No, I don't think it would have been a failure if they had made money.

LEHRER: What is your objection to it, just the fact that it didn't make money?

Ms. BELL: My objection to it is that the taxpayers' money is being spent on it without acknowledgement or without any representation from any of the taxpayers on the amounts of money that's being fed into the fair.

LEHRER: Mr. Valentino, do you agree that the fair has failed?

MIKE VALENTINO: No, the fair has been a tremendous success and a tremendous boon for the city. And the effects of the fair economically and in many other areas will be felt for many, many years to come.

LEHRER: Well, what do you say to the fact that the attendance is down and that the state had to come in with some money? You see those as bad things, but not necessarily bad things overall, is that it?

Mr. VALENTINO: Well, if you look at the long-range effects of the fair and the big picture of where we are right now, it is unfortunate, and there was never a plan to bring tax money in to bail the fair out. You've got a $350-million-dollar project which is almost completely funded by private funds. You've got an attendance level of about 42,000 people a day, which is about 20,000 fewer than is required to have the fair break even at the end of the six months. What you do also see here is that the fair has proved to be a catalyst for the development of our riverfront area. Old, abandoned warehouses which had -- if had been left to disrepair would never have been a source of tax revenues for the city. In the long run you're seeing a development which, on its own books will not make money, but which will cause a tremendous number of tax revenue, tremendous number of business commitments to remain in the downtown area, as opposed to fleeing to the suburban areas, keeping our tax base in the greater New Orleans area at a rather healthy level.

LEHRER: Ms. Bell, what do you say to that argument?

Ms. BELL: I would say that there's not much -- there is not going to be much left of those things that's at the fair once the fair has done its time. The only thing that I know that will be left is one great big center which is going to be the convention center, which that will not profit any New Orleanians. The only thing it's going to attract is tourists.

LEHRER: You don't think --

Ms. BELL: I can't --

LEHRER: Yeah, excuse me. Go ahead.

Ms. BELL: I'm sorry. I can't see where New Orleans is going to benefit.

LEHRER: Mr. Valentino, tell Ms. Bell how New Orleans is going to benefit.

Mr. VALENTINO: Well, we see the convention center as the future of the city's tourism economy. With oil and gas and port revenues becoming more difficult to get every year, tourism will surpass those two industries as the largest economic revenue-producer for this town of New Orleans.

LEHRER: Ms. Bell?

Ms. BELL: Yes?

LEHRER: What do you say to that?

Ms. BELL: Well, so far we're in trouble. Now, the mayor is saying that there is going to be a big deficit. If all of this is true, why is there going to be such a big deficit in New Orleans after the fair leaves?

LEHRER: What is your feeling, that the money that's going to keep the fair alive now is going -- would have been spent elsewhere, on other things? Is that your point?

Ms. BELL: It could have been spent on a lot of things.

LEHRER: Like what?What is being hurt as a result of this?

Ms. BELL: Let's use ambulance service.

LEHRER: All right.

Ms. BELL: There is a vast shortage of ambulance service right here in New Orleans, and probably in the rest of the parishes in Louisiana, too. There is not enough paramedics on these ambulances. They just don't have it. And I can see some of that money being spent for that, or for health care, or for the elderly.

LEHRER: Mr. Valentino, competition for fairs like this was, as you know, is very fierce. Would you from your perspective, based on the experience thus far in New Orleans, would you recommend other American cities to have a World's Fair like you all are doing?

Mr. VALENTINO: Well, I think it's becomming much more difficult to host World's Fairs using private revenues only. There are about four World's Fairs in progress right now -- Osaka, Japan; Vancouver, Canada; Chicago, Illinois. And those -- each of those three cities is using massive amounts of tax dollars in order to attain -- to build their site and to make surethat it runs at a profitable level. We approach the fair trying to use all private industry money.

LEHRER: In retrospect that was a mistake, you think?

Mr. VALENTINO: Well, if the fair attendance would be at 68,000 to 72,000 people a day, it would have been a wonderful scenario because the gate admission would have paid the price of the development of that $350 million site. Hindsight tells us now, because of the poor attendance figures, that it was an ambitious undertaking. However, even with the poorest attendance figures and the facts that tax dollars had to be brought in, the big picture dictates that this was a very wise move for the city and one that, years down the road, will prove to be an excellent direction that the city took.

LEHRER: Ms. Bell, what would be your advice to other cities about the advisability of bringing in a World's Fair?

Ms. BELL: My advice to other cities would be to study, make a -- use New Orleans and Tennesse -- Knoxville, Tennessee, as an example. Study all areas, every last area, all the way through before they take a step into something this big where the city -- where it's -- how that it's going to suffer.

LEHRER: Let me ask you, Ms. Bell, have you been to the fair there in New Orlenas?

Ms. BELL: No, I haven't.

LEHRER: Why not?

Ms. BELL: I haven't been able to afford to go to the fair.

LEHRER: Mr. Valentino, have you been there?

Mr. VALENTINO: Yes, sir.

LEHRER: What do you think? How would you judge your own fair?

Mr. VALENTINO: I think the fair on its own merits is absolutely spectacular. I would challenge you to find one person leaving the fair site at the end of the day who doesn't feel that way about it. I agree, in a sense, with Mrs. Bell's earlier comment. The initial admission fee of $15 and $14 for children may have been a bit too high. The fair recognized that, and instituted an after-6 p.m. $8 admission fee, which has allowed the fair's admission to be within grasp of many, many people that it wasn't prior to this time.

LEHRER: Ms. Bell, do you believe that it's the high admission is what's kept the attendance down?

Ms. BELL: As far as myself and a lot of other low-to moderate-income people, yes. And in reference to what Mr. Benson just said, the fair is charging this price. Yes, they raised their prices down, but as of now they are studying ways to come up and make you pay for a lot of the things that's supposed to be paid for under this $15 fare. You're going to have to pay a dollar to ride the monorail so that the monorail people can get paid. You're going to have to pay to go into some of the things that you didn't have to pay for before.

LEHRER: I see. Well, Ms. Bell, Mr. Valentino, in New Orleans, thank you both very much.

Ms. BELL: Thank you.

Mr. VALENTINO: Thank you.

LEHRER: Robin?

MacNEIL: Once again, the main stories of the day. Treasury Secretary Regan told Congress the American economy is heading for its biggest year of growth in more than 30 years. He also denied that the administration plans a tax hike. Walter Mondale charged that federal deficits during the Reagan administration have crippled farm exports by raising the price foreigners pay for dollars.

Two Iranian hijackers freed over 300 hostages and surrendered to police at an airport outside Rome.

And, in Chicago, a Cook County judge was sentended to 10 years in prison for mail fraud, racketeering and extortion.

Jim? Watching the Games

LEHRER: It was back in front of a television set again today for Day 11 of the summer Olympics, bringing it to just five more to go in America's magnificent summer obsession. According to Nielson and other counters, record millions of Americans are hooked on ABC's blanket coverage, the watch rate being comparable to such blockbusting series of the past as "Winds of War." One of the millions has been Boston Globe sportswriter Jack Caig, and here are his opinions of what he's seen.

JACK CRAIG, sportswriter: Have you noticed lately when you turn the dial of your TV set the Olympics are always on? That is because ABC is devoting 180 air hours to coverage of the games. How much time is that? If you watch every play of every regular season NFL game available to you next season, you will have watched 171 hours of the NFL between Labor Day and the Chistmas season. ABC is cramming nine more Olympic hours than that into only 17 days and rights.

The pinnacle of this Olympics TV deluge took place last weekend when ABC poured 39 hours of coverage into 63 hours between 11 o'clock Friday morning and 2 o'clock Monday afternoon. If an Olympic junkie allowed himself eight hours of sleep each of the two nights and another four hous all told for meals, he ould have been left with four hours to call his own over the entire long weekend.

Why is ABC Sports boss Roone Arledge doing this to us? I mean, for us? Is it because he wants us to become more familiar with fencing, equestrian, canoeing and bike races? Even the ones that have the big, funny wheels? The answer, I'm afraid, is no. The enormous coverage is designed to offer as many opportunities as possible to attract mass television audences for advertisers. During prime time, when the ads sell at their highest price because their audience is then largest. A two-minute break containing four 30-second messages generates $1 million for ABC. The netwok stockholders need all of that money and more because they must retrieve $400 million just to break even after spending $225 million in rights fees and another $175 million on production.

Ah, yes. Those messages. My favorite is one by the nation of Saudi Arabia. "Our people are our greatest resource," the ad man says at the end. All the while I thought it was oil.

Then there are the huge number of ABC progam promos. "Call to Glory" stands out because it's been aired so often. The series seems to promise sex and murder taking place in airplanes, I think, involving beautiful pople. When I become discouraged at so much Olympics watching, I take consolation in the fact I will not see "Call to Glory."

The need to intrude so many commercials onto the broadcast actually dictates the manner in which the Olympics are being covered. ABC goes frequently from one sport to another, or venue, as Jim McKay calls them, in order to create a break for another ad. The on-going action in basketball makes it tougher to wedge in commercials, which is why so little of this competition has been seen. For the same reason, soccer has been almost non-existent on Olympic television.

But the audience surely has been turned on, with no sign of TV burnout. From the hardened Red Sox fans at Cory's Bar in Boston to the Olympic Village itself, more than 50 millions persons have been tuning in every night.

A large part of the attraction is patriotism, which ABC promotes unblushingly. It's America versus the world, and we're winning. The real origin of this goes back to the 1976 Olympics and to cast-in-gold medal flagwaver Bruce Jenner. It was reinforced in spades in the 1980 winte games, when U.S. hockey goalie Jim Craig wrapped himself, literally, in an American flag while skating around the ice after the gold medal game. The Olympics on television were never to be the same.

But genuine heros and heroines have been created for America. Retton, Ashford, Lewis, Moses, and Vidmar. These are the names that will call up pictures in our mind long after the cameras in California have gone black. But as for me, I have to go now because the Olympics are still on.

LEHRER: Jack Craig of Boston. Good night, Robin.

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