The MacNeil/Lehrer NewsHour

MR. LEHRER: Good evening. I'm Jim Lehrer in New York.

MR. MUDD: And I'm Roger Mudd in Washington. After the News Summary we look first at the mounting damage caused by the Mississippi flood. We have an Elizabeth Brackett report from Des Moines and an interview with Budget Director Leon Panetta on the administration's flood relief package and on the congressional negotiations over the Clinton budget bill, and finally Charlayne Hunter-Gault reports on the pressures facing the United Nations peacekeepers. NEWS SUMMARY

MR. MUDD: President Clinton today promised the flood-ravaged Midwest $2 1/2 billion in federal money. He said he expected Congress to approve the relief within two weeks. Mr. Clinton was in Des Moines, Iowa, today for a look at the damage. He took a helicopter tour of the city and said he had never seen flooding on such a scale. He also visited with flood victims. About 250,000 in the Des Moines area have been without tap water since Sunday when a treatment plant was flooded. The President told people at a water distribution center to hang in there. Then he briefly joined volunteers who were filling sandbags for a new levee around the treatment plant. They hope to restore part of the water system within a few days. Later on a radio call-in program, he talked about what he saw today in Iowa.

PRESIDENT CLINTON: I talked to people who had lost everything in their houses. They've lost their businesses, people who obviously have had their farms flooded out. It was a very moving thing. I talked to parents who are worried about their children and even whether they can get adequate water and how they were going to that safely. And some of them had been able to send their children to relatives in other communities, some had not. But the spirit of the people seemed pretty undaunted. You know, several people broke down, and they were very choked up, but they were resolute. And I think that, that as terrible as these things are, in some ways they bring out the best in people. I saw an enormous number of people who had just stopped their lives and come in to, you know, volunteer and other people deal with their problems.

MR. MUDD: We'll have more on the story right after the News Summary. Jim.

MR. LEHRER: In economic news today, the Labor Department reported consumer prices were unchanged in June while the Commerce Department said retail sales rose .4 percent. It was the third straight monthly increase. Congressional leaders today formed a conference committee which will soon begin working out differences between the House and Senate versions of President Clinton's economic package. Members of the Congressional Black Caucus have openly expressed their displeasure for the President's handling of the plan, saying he backed down on commitments to them. Some have threatened to vote against it. Vice President Gore met with the Caucus today. Afterwards, the Caucus chairman spoke to reporters.

REP. KWEISI MFUME, Chairman, Congressional Black Caucus: We are all political realists and we recognize that commitment or not strange thing happen in conference committees. We also know that politics in Washington is a contact sport, and so we enter this to win and not to tie. And what we said to the Vice President was that we appreciated his pledge of commitment. We appreciated the pledge on behalf of the administration. It's just that we have to look out for our own best interests, and we'll be doing so and moving ahead as if nothing is certain and nothing is guaranteed in this process.

MR. LEHRER: We'll talk to Budget Director Leon Panetta later in the program about the budget talks and flood relief funding. The House Judiciary Committee today voted down a Republican-proposed congressional investigation of the White House Travel Office. The vote was 20 to 15, with only one Democrat voting in favor. Republicans on the committee said an internal White House investigation had been inadequate. But Democrats argued there are already two new investigations underway by the Justice Department and the General Accounting Office.

MR. MUDD: Fierce fighting broke out in the Somali capital of Mogadishu tonight. Somali militiamen carried rockets and small arms at U.N. headquarters and the airport. U.S. helicopters took off from the airport and returned the fire. There was no immediate word on casualties. The fighting came a few hours after militants had distributed leaflets in the city calling for attacks against U.S. targets around the world. Earlier today, there was another sign of trouble for the multinational peacekeeping mission when the U.N. removed the commander of the Italian contingent. We have a report narrated by Richard Vaughan of Worldwide Television News.

RICHARD VAUGHAN, WTN: The latest casualty of this war is Gen. Bruno Loy. The commander of the 2600 Italian troops is being sent home for failing to follow orders and not cooperating with his fellow commanders.

KOFFI ANAN, UN Undersecretary General: And that is unacceptable. If each contingent were to refer back to his capital to clear instructions given to them before they participate in an operation, it can be very dangerous for all the men on the ground.

MR. VAUGHAN: In Rome, the Italian foreign minister Andriata has described the move as an outrage. Along with fellow cabinet ministers, Andriata is considering a complete withdrawal from the former Italian colony. He says the United Nations has lost its way. Adding insult to injury, the UN. is demanding the redeployment of Italian soldiers to less volatile areas. Troops from the 20,000 strong international alliance have come under constant nightly attack in the capital.

MR. LEHRER: Running water was restored to about one-third of Sarajevo today. But Serbs reneged on a promise to turn on a natural gas line to the Bosnian capital. They agreed yesterday to the restoration of all utilities to the city. Sarajevo has been without tap water and electricity since last month. Repair crews had been unable to work because of Serb snipers. The U.N. High Commissioner for Refugees toured Sarajevo today, and she said a severe shortage of money was jeopardizing relief aid for the city. She said $200 million was needed for the next six months of operations.

MR. MUDD: The Mexican government today agreed to allow three ships carrying illegal Chinese immigrants into port. But Mexico intends to send immigrants back home immediately. The ships were stopped off the Mexican coast last week by the U.S. Coast Guard which was trying to block their entry into the U.S. The death toll passed 100 today in Japan's worst earthquake since 1960. The quake, which struck Monday, was centered off the northern coast of Japan. There have been 70 aftershocks since Monday, and more tremors shook the region today. Nearly a hundred persons also are missing and presumed dead. The quake unleashed tidal waves 36 feet high and started fires which devastated coastal fishing villages. Japanese Prime Minister Miyazawa who faces parliamentary elections on Sunday today toured the small island of Okushiru in the hardest hit region. That ends our summary of the day's top stories. Ahead on the NewsHour, fighting the flood, Budget Director Panetta, the next round for the Clinton budget package, and U.N. peacekeepers. FOCUS - BAILING OUT

MR. LEHRER: The lead story of the day continues to be the flood in the Midwest. Today there was more heavy rain in parts of the Missouri -- of the Mississippi River Valley. We have a report from Elizabeth Brackett in Des Moines.

MS. BRACKETT: River levels dropped in Des Moines today, but there was little other good news. This still remained a city of 250,000 people without water. Saying he wanted a persona look at the disaster, President Clinton arrived and took a chopper tour of the area, including the waterworks plant that had been overrun by floodwaters four days ago. Des Moines residents are now picking up their water at distribution centers across the city. One of those centers was the President's next stop. Soggy Des Moines residents greeted his arrival with enthusiasm.

PRESIDENT CLINTON: Hang in there, sir.

MS. BRACKETT: He promised the flood weary crowd that federal help was on the way.

PRESIDENT CLINTON: We will present today a bill to the Congress for emergency assistance based on our best estimates of the damage reports that have been filed to date, but we know there'll be several more in in the next few days, and I expect we'll have to revise all those numbers upward. We want to get the bill in today just to start movement on the bill. But as the damage reports come in over the next four to five days, I expect you'll see some revision upward in the numbers that the administration has asked for both in the House and in the Senate. And I want to say again I'm going to do my best to make sure that the full reach of federal assistance comes to the people of Iowa and to all the victims of this flood.

MS. BRACKETT: Clinton administration spokesmen later said the federal relief package had doubled from the estimates that were released last week. The President is now promising $2 1/2 billion in aid and said the numbers could still go higher. It is difficult to know just how much disaster relief will be needed here. Unlike a hurricane or an earthquake that does cause widespread destruction over a short period of time, the continuing cloudy skies here means this is a disaster that just keeps on happening. City officials do have a preliminary damage assessment of $253 million. That includes flood damage to 1,000 businesses and 1500 homes. In an afternoon radio interview, the President responded to more than just the damage assessments.

PRESIDENT CLINTON: This has been a particularly moving experience for me and for the Vice President and for our families, because so many of these towns that were hit were on a bus tour that we took last year and that when I have looked at these towns and I have seen what's happened at so many of them, you know, we were particularly along the river we were in St. Louis and Hannibal and Wayland and Keococh and Ft. Madison, Burlington in this state, and Muscateen, Davenport, Bettendorf, we visited all those places. We visited Prairie Du Chiens and La Crosse in Wisconsin, so I'm, I've met a lot of the people that have been hurt by this flood, and I just want you to know that we're going to try, we're going to do everything we can to be there and be a good partner.

MS. BRACKETT: Those in the Des Moines area who had struggled through the flood were appreciative of the President's visit. Things had calmed down around the Perkins house in the Valley Junction area of West Des Moines. Two days ago the water was four feet high here. Last night, there was time to try and find a fish in the basement.

MS. BRACKETT: Does it make any difference to you that President Clinton cut short his vacation and decided to come to Des Moines?

CHRIS PERKINS: Oh, I think it's really wonderful, because it means that the little people mean something to him, you know, that we're in trouble and we need help, and he's going to come and see what needs to be done, help.

MS. BRACKETT: Chris Perkins knew there was a chance her home would flood when she bought it. Still, she said she would not feel a bit guilty about taking federal help.

CHRIS PERKINS: I've paid my taxes all these years. You know, I've been employed. I've always paid my taxes. I don't see why I can't get a little bit of money back when I need it.

MS. BRACKETT: Perkins' friend, Jeff Tuttle, was hoping for help to clean up the garage that he owns down the street. He had already called FEMA's 800 number and registered his request.

MS. BRACKETT: When do you need that money to help in the cleanup? And if it doesn't come for several months, will it do you any good?

JEFF TUTTLE: It might make Christmas nice, but now is when you need the money. And I did hear on the TV today, I don't know who it was, some head of this FEMA deal, said it's time to cut the red tape and go with what the people need now. And that's what he needs to do.

MS. BRACKETT: The FEMA liaison officer for the state said quick help should be possible.

BILL TRAUGH, Federal Emergency Management Agency: Initially, and this can happen within four or five days, applicants could get a check for ultimate housing to keep them going if they can't get back into their homes. If it turns out to be a long range thing, our people in Davenport now are doing what we call a housing asset survey. They're finding all the empty housing in all the counties in Iowa.

MS. BRACKETT: Have any checks been cut yet for Iowa?

BILL TRAUGH: Not yet, not yet. I expect that to happen in just a few days, because we have had some disaster assistance centers open already, and we've taken almost 700 applications.

MS. BRACKETT: Are any open in Des Moines?

BILL TRAUGH: Not yet. The Des Moines disaster application center will open on Friday.

MS. BRACKETT: So far, FEMA has moved faster here than in previous disasters. And as President Clinton left town today, he said his first priority was to meet with Congress and ask for immediate action on the $2 1/2 billion flood relief package. NEWSMAKER

MR. LEHRER: The official Mr. Clinton has designated to come up with the relief money is his budget director, Leon Panetta. Mr. Panetta is also a key administration player in the House- Senate Conference Committee's search for a budget compromise. It begins tomorrow in Washington. I talked with Mr. Panetta earlier this evening about both challenges beginning with the flood.

MR. LEHRER: Mr. Panetta, welcome.

MR. PANETTA: Nice to be with you, Jim.

MR. LEHRER: Flood relief legislation has been drafted, is that correct?

MR. PANETTA: Not only drafted but actually sent to Capitol Hill. We sent it this afternoon, a bill asking for a supplemental appropriation to assist the disaster victims in the Midwest flood.

MR. LEHRER: How much money?

MR. PANETTA: The proposal recommends that we do about two point, very close to 2.5 billion. And it has to be made clear that this is all based on preliminary estimates of the damage. Obviously, even as we speak, there's continuing damage from the floods. There are continuing problems that we're going to see over these next few days, so we're going to have to continue to reassess it. But what we did here is basically presented a package based on the most accurate assessments we have to date, plus, we've built in a contingency fund so that as we get new estimates of damage the President will be able to release funds from those contingency areas in order to help those victims.

MR. LEHRER: You mean a contingency fund in addition to the 2.5 billion?

MR. PANETTA: That's part of the 2.5.

MR. LEHRER: I see.

MR. PANETTA: Of the 2.5, roughly 800 million is in a contingency fund for several agencies that may be needed to respond to damages that are occurring.

MR. LEHRER: And the rest of it is earmarked for specific purposes?

MR. PANETTA: That's correct. The largest amounts really are for FEMA, the Federal Emergency Management Agency, which is obviously the primary agency trying to provide benefits and assistance with regards to the disaster. It's almost about 550 million, plus we're providing about 250 million in contingency funds for FEMA. And the next big area is obviously agriculture. We've had tremendous loss on agricultural crops. It's very close to about a billion dollars. About 600 million dollars are provided for trying to deal with the replacement on the crop damage that has taken place, plus we have about 300 million in addition to that as a contingency fund.

MR. LEHRER: Now the President said this afternoon in Iowa that in addition to the 2.5 there was another 1 billion of money that was already in the pipeline. What was he referring to there?

MR. PANETTA: Well, obviously, again, I think everybody needs to understand this is a supplemental request, which means that these are monies above and beyond what currently is being spent. Many of these agencies do have some reserve funds that they're now expending. Obviously some of the crops could be covered by funds that are currently in the agricultural budget, and that roughly approximates what the President said.

MR. LEHRER: I see.

MR. PANETTA: So we're looking at those funds literally being exhausted sometime as we approach the end of July. We need to have these additional funds in order to make sure we can continue to have relief for the victims.

MR. LEHRER: All right. Now where is this new money going to come from?

MR. PANETTA: It's provided under the emergency declaration provisions that we have under the budget act that was passed in 1990, and we recommend the same provision as part of the President's economic plan which basically allows him to present this package under an emergency declaration. And as a result, it does not have to be paid for. It basically is added to the deficit for 1993.

MR. LEHRER: So it -- there is nothing in the federal government or in your budget that's going to have to be given up in order to fund this, is that correct?

MR. PANETTA: That's correct. It's treated in the same fashion as the packages on disaster assistance that were provided for Hurricane Andrew, for Iniki, for Hurricane Hugo, as well as the disaster in California, the Loma Prieta, all of them provided aid under this emergency declaration, and we're using exactly the same provision here with regards to the Midwest floods.

MR. LEHRER: Now you've been in consultation with the congressional leadership. What's the legislative schedule for this legislation?

MR. PANETTA: The members that I talked to, both the Republican leadership as well as the Democratic leadership, were very sympathetic, obviously, to trying to move assistance to those victims as quickly as we can, and as a consequence, I think you're looking at a fairly rapid timetableon the House side. The Chairman of that Committee has indicated that he would like to perhaps mark up as early as next week. A lot of it depends on making sure we have the most accurate assessments on damage. And obviously, as you know, this flood crest continues to work its way downstream. We want to make sure that we've got as full an assessment of damages before we move this package out of both the House and Senate.

MR. LEHRER: Well, is speed a problem here? I mean, are any, is FEMA or any other branch of government in danger of running out of money that's needed on an emergency basis?

MR. PANETTA: Well, the one that's probably closest to the line would be the Federal Emergency Management Agency. And they are providing direct grants to individuals, and they're sending out checks even as we speak. And so that's the one area where I think we've got to be very careful that we don't run out of money, because that means immediate money in the pockets of victims who are being displaced from their homes.

MR. LEHRER: So it is an element?

MR. PANETTA: That's true.

MR. LEHRER: I mean, the quicker, the better, in other words?

MR. PANETTA: That's correct. That's the reason really the President wanted to move this legislation on a rapid timetable, get it up to the Congress, and as we get new assessments, we'll try to build in the new numbers, but we've got to move this legislation.

MR. LEHRER: Speaking of new assessments, there were figures mentioned this afternoon that this could go as high as $5 billion or even higher before it's over. Does that make sense to you?

MR. PANETTA: Again, we have to be careful about what assessments we make on damage until we see exactly what has happened as a result of the flood, how damaged are the buildings and the businesses that have been affected here and try to get the best assessments. It's obvious that it will probably be larger than the 2.5 billion that we sent up.

MR. LEHRER: But does 5 billion sound reasonable to you?

MR. PANETTA: Well, you know, I'm kind of a veteran of disasters. In California, I had the Loma Prieta earthquake affected my own district, and the consequence that you normally find in these disasters is that damages go up. And I wouldn't be surprised if it reached that number.

MR. LEHRER: All right, fine. Now let's go on to the search for a budget compromise. And please don't go away, Mr. Panetta. We'll be right back to you after this set-up report by Kwame Holman.

MR. HOLMAN: During its first run through Congress, the President's economic package did not attract even one Republican vote.

REP. JOHN KASICH, [R] Ohio: You're economic program is a job killer. Your tax increases on the energy in this country will affect people from the automobile to the schoolhouse, to the grocery shelf.

MR. HOLMAN: But just enough Democrats banded together to give a slightly altered version of the President's plan a narrow six vote victory in the House of Representatives.

VICE PRESIDENT GORE: The Senate being equally divided, the Vice President votes in the affirmative.

MR. HOLMAN: And with Vice President Albert Gore casting the tie- breaking vote, the Senate passed a more radically altered version of the President's plan.

PRESIDENT CLINTON: What will happen now is you'll see a negotiation, and they'll try to bridge those gaps. I don't think they are particularly large. I think it's quite encouraging.

MR. HOLMAN: But the bills passed by the House and Senate, though similar most respects, have some substantial differences, and so selected members of Congress sit down this week to begin their so- called conference committee in an attempt to shape those differences into one budget plan. The conference will be led on the House side by Dan Rostenkowski, who as chairman of the Ways & Means Committee refused to allow any significant changes to the President's economic package. Senate conferees will be led by Daniel Patrick Moynihan, who as Finance chairman could not prevent Democrats in his committee from rewriting major sections of the House-passed bill. Melding the two versions of the economic plan won't be easy.

REP. CHARLES RANGEL, [D] New York: I don't ever remember even hearing about two bills being so different coming into a conference.

SEN. JOHN CHAFEE, [R] Rhode Island: I think he's right. I don't know how they're going to solve this thing in the conference.

REP. CHARLES STENHOLM, [D] Texas: I honestly say I don't see how we're going to get a conference and get 218 votes, 51 votes and the presidential signature as we sit and talk right now. But I know we're going to, because we have to.

MR. HOLMAN: The major differences between the two bills are the House version contains an expanded earned income tax credit for the poor, empowerment zones to encourage investment in urban areas, and to help pay for it all a broad-based BTU energy tax, a complicated levy based on the heat content in fuel. The BTU tax was the big revenue raiser expected to produce $72 billion over five years. President Clinton lobbied hard for it when it reached the House.

PRESIDENT CLINTON: It is a fair, balanced plan, and I'm going to try to pass it.

MR. HOLMAN: Charles Rangel, representing some of the poorest sections of New York City, said he was convinced to vote for the tax.

REP. CHARLES RANGEL: Now nobody really likes to pay more taxes, but the way the bill was created that the maximum tax would hit those people in the highest income tax bracket and the others, you know, would be a broad-based tax so that hardly anyone would feel it, and even the working poor would have a cushion with the earned income tax credit, so it would balance out.

MR. HOLMAN: In the Senate, however, Democrats vowed to pivotal members from oil producing states and rejected the BTU tax, turning instead to a less intrusive 4.3 cents per gallon tax increase on transportation fuels, expected to raise only $24 billion.

SEN. JOHN BREAUX, [D] Louisiana: People in Louisiana told me that they would rather pay a little bit and have a good job than have to pay a so-called BTU tax and perhaps lose their job. But I think that we have done what is needed.

MR. HOLMAN: The Senate also drastically reduced the House version's expansion of the earned income tax credit, eliminated the empowerment zones, and cut $8 billion more out of Medicare expenditures. Those changes angered many liberals in the House, especially members of the Congressional Black Caucus.

REP. KWEISE MFUME, Chairman, Congressional Black Caucus: We have a great deal of concern that the Senate of the United States is prepared to undo in many respects things that we have fought very hard for here in the House, things that all of us have had a chance to work on and to some extent compromise on, thing that are in many respects also non-negotiable.

MR. HOLMAN: Congressman Rangel focused his criticism on senators who insisted on substantially reducing President Clinton's energy tax.

REP. CHARLES RANGEL: You know, those senators are really a work of art, because normally the Senate passes things over there because they have a more relaxed parliamentary procedure, they have open rules, open debate, and so they are able to just trim the tree with the glistle and the tinsel, but they know when we go to conference that they're going to yield to the House. So under normal circumstances, what the Senate does is of no serious consequence, but here they have substituted the engine for the revenue raiser and, and slashed it to a fraction of what the President requested.

SEN. GEORGE MITCHELL, Majority Leader: I understand and share the concerns of Congressman Rangel and others, but it is an inevitable result of the constitutional frame work in which we operate.

MR. HOLMAN: Although Senate Majority Leader George Mitchell had hoped to work the President's plan through the Senate intact, he defends the changes made by his colleagues.

SEN. GEORGE MITCHELL: I told some of the House members who complained about the Senate changing the bill if they would like to amend the Constitution to give the Senate the right to originate tax measures, we will gladly accept that and give them the right to change it when they get it.

MR. HOLMAN: And Congressman Rangel gets little sympathy from fellow House Democrat Charles Stenholm of Texas who supported the President's package in the House, despite the presence of the BTU tax.

REP. CHARLES STENHOLM: I knew it was gone when it left the House, but we want to make sure that no one's even thinking about reviving the BTU tax at this time. Now replacing that revenue is going to be our challenge, but the Senate replaced all but 23 billion of it. Some of us say that 23 billion ought to be replaced with some additional spending cuts to get the ratio of taxes and spending in a little better shape. That's where we're going to have differences between Charlie Rangel and Charlie Stenholm, and they're going to have to be worked out in a democratic fashion.

MR. HOLMAN: For his part, Rangel says he'll insist that expansion of the earned income tax credit and creation of empowerment zones be retained in the final bill.

MR. HOLMAN: No investment zones, no vote from Charles Rangel?

REP. CHARLES RANGEL: No, no, no. No, the investment zones are really hope. If you shatter that, then I, I would say that we have to go back to the drawing table.

MR. HOLMAN: It will be in that atmosphere that Democrats will sit down with Democrats and try to work out what to tax, what to cut, and what to spend. Republican members of the conference will continue their role as observers. Republican John Chafee of Rhode Island has been selected as a Senate conferee.

MR. HOLMAN: You're going to be there. You're a conferee. You're saying that you won't be involved.

SEN. JOHN CHAFEE: I'm prepared to be involved. I just say I need an invitation to come to the dance. The invitations haven't been out there.

MR. HOLMAN: Republican participation in the budget process has been so limited some GOP members of the Senate Finance Committee resorted to name tags.

SEN. ROBERT DOLE, Minority Leader: The Democrats may not remember us. We are on the -- [laughter in room] -- we are members of this committee, and Sen Danforth thought it might be well to identify ourselves.

SEN. JOHN CHAFEE: That is how true it is that the Democrats have lost the input of some very reasonable people who are in the middle, if you would, who aren't totally against all taxes, who just want to see more spending cuts and fewer increases in taxes and want to get on with doing something good for the country, and we were left out.

MR. HOLMAN: But Majority Leader Mitchell says he's resigned to the fact that Republicans choose not to participate.

SEN. GEORGE MITCHELL: This is a case where they're clearly going to vote "no" no matter what. Their position is very simple, if President Clinton is for it, they're against it. If President Clinton sent up a budget here that included a statement that apple pie and motherhood were good things, I guarantee you the Republicans would have an amendment that would say apple pie is evil and motherhood is insidious. Whatever President Clinton is for, they're against.

MR. HOLMAN: What also makes this conference so difficult for Democrats is President Clinton's insistence that the final combination of taxes, spending, and spending cuts add up to $500 billion in deficit reduction over five years.

REP. CHARLES STENHOLM: I think the financial markets have reacted very positively to the idea that we're going to reduce the deficit by 500 billion. I think that's a very key point.

MR. HOLMAN: But Congressman Charles Rangel says he's ready to sacrifice deficit reduction in order to restore spending for social programs.

REP. CHARLES RANGEL: The Major Leland stamps, food stamp bill has been dramatically reduced. I mean, we're talking about in our bill raising $500 billion, cutting $500 billion, and then to our hungry, we say, well, we want to cut taxes back so we're cutting you back. You know, for 12 years, I said we'll win and things will be different. And I want to make things different.

MR. HOLMAN: This afternoon, Vice President Gore was back on Capitol Hill to assure Rangel and other members of the Black Caucus that the Clinton administration would stand by the principles they shared during the conference. All along, the administration has said the conference was where it would get aggressively involved in the negotiations, and now that time has arrived.

MR. LEHRER: And once again back to Leon Panetta, President Clinton's budget director. Mr. Panetta, how involved will you and others in the administration actually be in these negotiations?

MR. PANETTA: Jim, we're going to be very much involved. We've already had a number of discussions with the committee staffs and committee members, with the chairmen that are going to be involved in the conference. This is very much going to be a team operation at this point in order to meet the challenges of the conference. There are differences obviously between the House and Senate versions, but there are an awful lot of similarities. This is essentially the President's plan that's now in conference, and the President and the administration intend to be very much involved in fashioning the final package.

MR. LEHRER: But as a practical matter, whatever that final package is, if it passes the House and Senate, the President will sign it, right?

MR. PANETTA: Well, obviously, our hope is that it is going to reflect the President's plan, and we think it will. I don't think it's going to be a problem whether or not the President signs it, because I think the package we put together will have our support and hopefully, again, the support of the Democrats we need on the House and Senate side to get it done. I think the bottom line here is everybody recognizes that this is fundamentally necessary to turning around our economy and to trying to deal with the problems we've seen the last 12 years. Everybody understands the bottom line. We have got to do this for purposes of restoring strength to our economy and not continuing to walk towards the cliff we're walking on in terms of the size of the debt and the size of the problems that are currently afflicting our economy.

MR. LEHRER: But speaking of the bottom line, is the bottom line for you and the President as long as it adds up to that $500 billion deficit reduction in five years, the details of how it's actually done are not that important?

MR. PANETTA: No. It's not quite that simple, Jim. I think the President feels very strongly not only that we get in the vicinity of $500 billion in deficit reduction, which has always been the primary goal here of developing this economic plan, but that we also set aside that money in a trust fund for purposes of ensuring that it goes to deficit reduction, that it also be fair in terms of the burden that's carried here, and that everyone carry their fair share, including the wealthiest in the country. We have those provisions on the House side and on the Senate side. Almost 80 percent of the tax burden is carried by those who earn over 200,000. I think the President wants to try to protect that kind of fair share. And thirdly, as you heard from the discussion that preceded this conversation, we intend to try to work to restore some of the key investments here that were very important to the President and that are very important to the jobs aspect of this whole package, restoring some of the business incentives that were knocked out on the Senate side, also restoring some of the human investments that the President feels are particularly important to the overall fairness of this package.

MR. LEHRER: Have you given Chairman Rostenkowski and Sen. Moynihan your list of what you want to come out of this package, want in this package when it comes out?

MR. PANETTA: We have had conversations with both Sen. Moynihan as well as Chairman Rostenkowski in talking about the various elements that are on the table now and where a possible resolution can be passed. I mean, obviously, they've got to work through it. They've got to resolve their differences as they work through it. We've got to be in constant communication with the rest of the members of the Democratic Caucus on the House side and on the Senate side. I regret that we don't have Republicans as part of this effort, but Republicans decided a long time ago to basically take a walk on this package, and so it's pretty clear that Democrats are going to have to carry the responsibility of putting this economic plan in place.

MR. LEHRER: I don't want to -- I know you don't want to reveal too much here, but just as a practical matter, how is this going to work? I mean, are you going to, you in the White House, you and the others at the White House, going to let conferees work out let's say a, a compromise position on an energy tax, and then they will then come to you and say, okay, here's what we worked out, will you and the President accept that, or will you be involved in the discussions between the two of them from the very -- in other words, they will know going in whether or not the President will accept this before they ever reach a compromise between the two of them?

MR. PANETTA: I think, I think this is clearly at a stage where everybody needs to know where everybody's at --

MR. LEHRER: Okay.

MR. PANETTA: -- as you go into the conference, and as a consequence, we're all going to be working together in fashioning that final conference report.

MR. LEHRER: Well, okay. Let's be specific here. There's a Rostenkowski proposal being floated now that would stick with the Senate's gasoline tax but would combine it with a tax on consumer utility bills. Will you and the President buy that?

MR. PANETTA: Well, obviously, we need to see all of the various proposals. I know Sen. Moynihan has discussed the possibility of whether or not there could be an increase in the fuel transportation tax on the Senate side. He's working with different approaches to that. I think we need to obviously see what the approaches are on both sides and try to discuss those and also test them with the membership in terms of what can be supported. It is pretty clear that in order to restore some of the investments and in order, in particular, to reach the $500 billion in deficit reduction that something is going to have to be worked out in the energy area.

MR. LEHRER: What about the empowerment zones? You heard Congressman Rangel said if it's not in there, he isn't going to vote for this bill.

MR. PANETTA: Well, again, we've got to protect the coalition that worked with us to get this package passed, and the Black Caucus and liberal members on the House side were able to work with us in the initial effort largely because these investments were part of the package. I think it's pretty clear the administration has said as much. The President certainly feels very committed that we've got to restore the empowerment zone provision. We've got to try to work on unemployment compensation which is a provision that's part of the House package. We've also got to try to do what we can on immunization and on the Mickey-Leland Hunger Relief Act. Those are four, three or four key investment areas on the human side that the President feels very strongly about.

MR. LEHRER: And has that been transmitted to the Senate side, to say we want those back, the President wants those back, period?

MR. PANETTA: I think the Senate understands that restoring some of those key investments is essential to trying to hold the coalition that we had and passing it on the House side.

MR. LEHRER: Sen. Moynihan said that the failure of Congress to pass some bill would essentially close down the Clinton presidency. "Close down" are the two words in quotations. Is it that serious?

MR. PANETTA: Those are pretty strong words.

MR. LEHRER: Sure, sure.

MR. PANETTA: But I, I would say this, that it's pretty clear that the principal challenge that is facing the administration and the President and this country is restoring the strength of our economy. If we don't put this plan in place, then obviously it undermines our ability to deal with a whole series of other issues that are facing this country. We have for 12 years basically avoided meeting this challenge, and the consequence is not only a $4.4 trillion debt but an impact on our economy that is undermining our future, our investments, our interest rates, and our children's ability to improve their standard of living. The reason we have to put this plan in place is because it is in the interest of the country to do it, and if we fail to do it, then we are essentially condemning ourselves to the same fate that we have seen for the last 12 years.

MR. LEHRER: Would it be correct to interpret that answer as a yes?

MR. PANETTA: It's pretty close to a yes.

MR. LEHRER: Okay.

MR. PANETTA: We think it's important to get it done.

MR. LEHRER: Okay. Mr. Panetta, thank you very much. FOCUS - IN HARM'S WAY

MR. MUDD: Next tonight an in-depth look at the dramatically changing role of United Nations peacekeepers. Troops under U.N. command are now stationed all over the world, but as their role expands, so does the criticism and the controversy. Witness the week's events in Somalia. Just this evening, there was a new round of fighting in Mogadishu. U.S. helicopter gunships under the U.N. command fired machine guns and rockets at targets in the northern part of the city. This latest spasm of violence has triggered new criticism of the peacekeeping forces there and has increased calls for their withdrawal. Charlayne Hunter-Gault reports on the sudden expansion of U.N. peacekeeping and the difficult challenges it presents.

MS. HUNTER-GAULT: Mogadishu, Somalia, December, 1992, U.S. Marines and U.N. troops mobilized to feed starving Somalis, but the move to restore and maintain order marked the dawning of a new era in U.N. activism, from peacekeeping to peacemaking. The demand for U.N. troops has increased dramatically around the world, along with the complexity and danger of the missions. And the will of member states is being tested as never before, presenting unprecedented challenges. U.S. Ambassador to the United Nations Madeleine Albright.

MADELEINE ALBRIGHT, U.N. Ambassador: We are really pushing the envelope here. This is all new. We are dealing with very different situations, very different ways that countries cooperate to deal with these serious problems. None of this has ever been done before.

SPOKESMAN: In your hands rests our future.

MS. HUNTER-GAULT: When the U.N. was founded nearly a half century ago, its primary goal was to maintain international peace and security. In the early years U.N. peacekeepers were dispatched to monitor cease-fires in Palestine and Kashmir. But the Cold War competition between the two biggest powers severely distorted its mission, paralyzing the Security Council which oversees the U.N.'s political activity. By 1956, when peacekeepers were sent to the Suez, the Council was rendered powerless by Soviet vetoes and had to leave the job of peacekeeping largely to others. Now that the Soviet Union is history, the U.N. is once again in a position to do what it was set up to do. Koffi Annan is U.N. Undersecretary General for peacekeeping operations.

KOFFI ANNAN, UN Undersecretary General: After the Cold World War, I don't think any country wants to play the policeman of the world, and somebody has to do it, and it seems to me that the international community is looking at the U.N. to play that role.

MS. HUNTER-GAULT: The U.N. has established more peacekeeping operations in the last five years than in all its prior years. There are 14 operations involving 80,000 troops from 74 countries. The oldest operations are in the Middle East, India, and Pakistan, the most recent, the small African nation of Rwanda. But as part of its new activism, the U.N. Security Council is also defining threats to international security more broadly as seen in Somalia, the first case where it has intervened in a humanitarian crisis and a raging civil war. Enid Schoettle is a senior fellow at the Council on Foreign Relations.

ENID SCHOETTLE, Council on Foreign Relations: Fifteen years ago it would have been inconceivable that the major industrialized countries, let alone the African countries, would have felt that a massive collapse of society in Somalia and massive famine was a threat to international peace, but everybody agreed it was a unanimous decision, that that was a threat to the peace, and Somalia was a situation where the U.N. had to do something.

MS. HUNTER-GAULT: More and more the Security Council has been called on not just to keep the peace but to make peace. The problem is the role of peacemaker is dramatically different from that of peacekeeper. Peacekeepers are invited in by governments which are, for the most part, waiting to cooperate. Should problems arise, they are subject to international pressure. Peacemaking is a lot tougher, given the strong feelings governments have about the sovereignty of their borders or in the case of Somalia, the absence of any government at all. Sir Brian Urquhart is a former UN undersecretary general in charge of peacekeeping.

SIR BRIAN URQUHART, Former UN Undersecretary General: When you're dealing with a mishmash of militias, armed gunmen, thugs, and so on who really don't recognize the Security Council, don't recognize the status of U.N. peacekeepers, as you've just seen in Mogadishu, and don't reckon they're bound by governmental agreements and are difficult to put pressure on also, the diplomatic or political kind, I think it's a very different day.

MS. HUNTER-GAULT: More than 90 peacekeepers have been killed so far this year, 29 in Somalia, 28 in the former Yugoslavia, and 26 in Cambodia. The mounting fatalities and the growing demand for U.N. forces raise serious questions about whether the U.N. is equipped to carry out its new mission. Amb. Albright.

AMB. MADELEINE ALBRIGHT: Well, part of the problem is that they have to start from scratch every time there is a call for peacekeepers, so the Secretary General really has to go out from country to country trying to find a battalion here, a brigade here, airplanes, lift capability weapons, and so they have to figure out how to put this very complicated multinational force together from scratch.

SIR BRIAN URQUHART: There's no infrastructure at all at the minute. There is no training program. There is no contingency planning. There is no logistical network. There is no command school or staff school. It's all improvised. It always has been.

MS. HUNTER-GAULT: To make matters worse, the mandate the Security Council gives its commanders is often imprecise and inadequate. Amb. Robert Oakley is a former U.S. envoy to Somalia.

ROBERT OAKLEY, Former U.S. Envoy to Somalia: Your mandate is written in such a way as to give you only vague guidance on what you're supposed to be doing, i.e., if you're a commander in the field. Furthermore, the authority of the commander in the field compared to the people in New York is not clear, and finally, frequently, you don't have authorization or it's harder to use force, if necessary, to accomplish your objective. You can only use it in the event that you're actually shot at.

MS. HUNTER-GAULT: In Bosnia, a frustrated U.N. general, Phillipe Morillon, took advantage of the lack of guidance to make up his own policy.

LT. GEN. PHILLIPE MORILLON, U.N. Commander, Bosnia: My intention to lead the convoy up to Srebrenica. I have all the agreements with Bosnia and local commanders.

MS. HUNTER-GAULT: Morillon risked a shootout with Serbian troops when he vowed to stay in the Muslim town of Srebrenica until the Serbs lifted their siege. He did so before consulting U.N. officials in New York, and he got away with it. Those officials shudder to think what would have happened if the Serbs had actually fired on the U.N. troops.

KOFFI ANNAN, UN Undersecretary General: The crisis in the republic of Bosnia and Herzegovina poses a historic challenge for the international community.

MS. HUNTER-GAULT: Bosnia is an example of the kinds of internal tensions that plague many U.N. peacekeeping operations. Security Council members are under pressure to stop the killing, so they expand the troops' mandate. Ordered initially to deliver humanitarian relief supplies, the troops are now asked to set up safe havens as well. It's obviously a high risk operation. Yet, the U.N.'s initial plan calls for only 7500 additional troops.

KOFFI ANNAN: Our military commanders had indicated that ideally they would have preferred to do it with 34,000 troops, but given the discussions in the Council and the realistic appreciation of what the traffic would bear, we decided to go the progressive approach, starting initially with 7,500 and depending upon results and the reactions of the parties on the ground probably increase gradually to the level that a force commander has indicated will be ideal.

MS. HUNTER-GAULT: Lord Owen, European Community Chief Envoy, had this reaction to the Security Council mandate.

LORD DAVID OWEN, European Community Envoy: Well, it's no use in New York changing the mandate without giving the resources. It's all too easy to will the end and fail to provide the means. And this is the real problem of the United Nations, and it's got to be faced up to by the United States. They ask of the United Nations the impossible. They pass these resolutions in the Security Council, safe in the Security Council, and they are, mean nothing unless they are matched by resources. They haven't got the resources to stretch from right across the country here. They cannot deliver some of these fine sentiments.

MS. HUNTER-GAULT: Somalia is a similar story of increasing demands and inadequate resources. After the main U.S. force pulled out in May, a smaller, less well-equipped force was asked to pursue a wider and more aggressive mandate. Withdrawing political and military officials predicted the warlords would test the weakened U.S. force, and they were right. The root of the U.N.'s resource problems is, of course, money. Member nations, the United States included, are notoriously late in paying their peacekeeping assessments. The U.S. is expected to pick up about 30 percent of the cost, a number which some Congressmen feel is too high. While testifying recently on Capitol Hill, Amb. Albright was warned that Congress would not go on paying that much.

REP. TOM LANTOS, [D] California: The United States pays a disproportionate share of peacekeeping costs, and we will have to ask you as our representative in the U.N. to carry that point of view to your colleagues.

MS. HUNTER-GAULT: The U.N.'s problem getting members to pay up means that it often has to make painful choices. Expensive commitments in Cambodia and Croatia, for example, were partly responsible for the U.N.'s delay in responding to the crisis in Somalia. With pent up hatred fueling national ethnic and religious conflicts all around the world, the cost of U.N. peacekeeping is only going to increase. This year's current estimate, $3.7 billion.

ENID SCHOETTLE: The costs of peacekeeping doubled between '88 and '92. They're tripling this year from '92 to '93. The number of U.N. troops serving on peacekeeping operations has increased eightfold only since January, 1992. This is a very, very rapidly changing and expanding set of activities.

SPOKESMAN: We are looking toward to the report of the secretary general.

MS. HUNTER-GAULT: Typically, the U.N. moves from one political crisis to another without time for long range planning. U.N. Secretary General Boutros Boutros-Ghali is trying to change that. He's called for a contingency fund for peacekeeping operations, stockpiling of equipment, and improved training. He's also proposed that members designate units of their armed forces as standby peacekeepers.

SIR BRIAN URQUHART: Some may operate a field hospital, others in country, others logistics unit, air support, so we will have a data bank that will indicate what each government is prepared to offer in what time frame.

MS. HUNTER-GAULT: Even with the new system, the U.N. will still need about three months to put troops into the field. As a result, its ability to respond quickly before crises get out of hand would still be limited. For that reason, Sir Brian Urquhart favors a small, permanent U.N. force made up of international volunteers.

SIR BRIAN URQUHART: If you have a volunteer force proper, it is a completely different thing. It's a step towards the U.N. as a much more independent organization and will be resisted probably by a lot of governments for that reason. On the other hand, it's a much more practical, in the long run a much more practical way to do things.

MS. HUNTER-GAULT: Such a force, argues Urquhart, would make the U.N. more credible in the long run and save money.

SIR BRIAN URQUHART: It's when a conflict has got completely out of control that it's unbelievably difficult to approach. And I believe that where it would be expensive initially to have a rapid deployment group, a peace enforcement group of some kind, which is not shackled by the difficulties of government reluctance to involve troops in this kind of thing, which could go in right at the beginning, and show that the Security Council meant business when it said, for example, that fighting was going to stop, that would be a tremendous improvement on what happens now.

MS. HUNTER-GAULT: Maybe so, but the chances that member states would actually approve such a force are probably slim.

KOFFI ANNAN: I suspect some of the smaller countries might be nervous that the force might be used against them to intervene in situations where they might not be quite prepared if the secretary general and the organization has that force at his disposal, and I'm not quite sure how some of the bigger powers will react to giving the United Nations a super -- a national army of that kind.

MS. HUNTER-GAULT: Whatever the U.N. does, it's likely to continue to call on the United States in large operations especially for logistical support, communications, air, and sealifts. In recent years, the U.S. has been more and more willing to cooperate. The Clinton administration is now reviewing its policy toward U.N. peacekeeping. The new policy will reportedly increase U.S. support in the area of planning and training but not commit U.S. troops unless U.S. national interests are clearly at stake.

AMB. MADELEINE ALBRIGHT: It is our feeling that the United States does not want to be the cop for everybody alone, that what needs to happen is for us to, for their to be many policemen out there, and we should be a part of those. And we should divide up the responsibility according to what the vital interests are, what the capabilities are, what the division of labor should be.

MS. HUNTER-GAULT: Amb. Albright calls the new policy "assertive multilateralism," and the administration appears to have already taken steps towards implementing it. It agreed to airlift food and humanitarian supplies to the sieged Bosnian town unreachable by land convoy. It has committed 300 U.S. troops for peacekeeping chores in Macedonia. It was also willing to allow U.S. forces to join with others in retaliating against Gen. Aidid in Somalia. The United States and all of the nations of the world are saying they want the United Nations to assume the role of global policeman, but the real question is: Do they mean it, and if they do, what are they willing to pay for it? RECAP

MR. MUDD: Again, the major story of this Wednesday was the flooding in the Midwest. President Clinton touring Des Moines promised $2 1/2 billion in federal aid. On the NewsHour tonight, Budget Director Leon Panetta said an aid bill was sent to the Congress today. He said it was based on damage estimates and may have to be revised upwards. Panetta said he would not be surprised if federal aid eventually reached $5 billion. Good night, Jim.

MR. LEHRER: Good night, Roger. We'll see you tomorrow night. I'm Jim Lehrer. Thank you, and good night.