The NewsHour with Jim Lehrer

JIM LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight, Tom Bearden updates the flooding in North Carolina; Margaret Warner and Dan Balz of the "Washington Post" provide a snapshot of the George W. Bush campaign; Susan Dentzer reports on suing HMO's in Texas; and Terence Smith explores a clash between government and the press over using a new technology. It all follows our summary of the news this Thursday.

NEWS SUMMARY

JIM LEHRER: President Clinton signed a temporary spending bill today. It will keep the federal government going another three weeks. He said he felt he had no choice but to sign it.

PRESIDENT CLINTON: I signed that continuing spending bill, not because I wanted to, but because it was the only way to prevent another government shutdown. Months ago I presented a responsible budget plan that pays for itself, invests in education, saves Social Security and Medicare, puts us on the path to paying America out of debt. Regrettably the majority in Congress, the Republican Majority has chosen to disregard the way I put this budget together and to disregard the path of fiscal discipline.

JIM LEHRER: Republicans went on the offensive today. They accused the President of trying to get at Social Security funds to pay for other programs.

REP. DICK ARMEY, Majority Leader: It really is a simple proposition. President Clinton wants to spend Social Security surplus, the Republicans want to lock away every penny of it for Social Security, Medicare and debt reduction. Mr. And Mrs. America, President Clinton is using your Social Security card as his personal credit card for more big government spending and the only way to stop President Clinton from spending the Social Security surplus is to take his credit card and lock it away in our lock box.

JIM LEHRER: Also today, Mr. Clinton publicized new Census Bureau figures on poverty. They said the median household income went up in '98 for the fourth year in a row. It was $38,900. And the number of people living in poverty fell by more than a million. New 2000 presidential campaign fund-raising figures were released today. Democrat Bill Bradley raised $6.7 million over the past three months, $200,000 more than Vice President Gore. The number one fund-raiser by far was Republican George W. Bush, with $19 million, $56 million in all so far. We'll have a snapshot look at his campaign later in the program tonight. The weather in eastern North Carolina improved today, forecasters expected it to continue good at least through Monday. An inch of rain fell overnight, adding to the 27 inches from Hurricane Floyd and Tropical Storm Dennis. September was one of the wettest months ever for the region. We'll have an update on the flooding in North Carolina right after this News Summary. A powerful earthquake struck Mexico today. It measured 7.5 on the Richter Scale, strong enough to cause major damage in Mexico City and other densely populated areas. Eight deaths were reported, along with extensive property damage. The epicenter was 275 miles southeast of Mexico City. Secretary of Defense Cohen today accused the Indonesian military of aiding and abetting anti-independence militias in East Timor. But he said he believed Indonesia's leaders were committed to curbing that violence there. He met in Jakarta with Indonesian President B.J. Habibie. Cohen, President Clinton, and army secretary Louis calderas all vowed to review recently disclosed charges concerning the Korean War 50years ago. The associated press reported American troops massacred 200 South Korean civilians, believing them to be North Korean infiltrators. In northeastern Japan today, a leak at a uranium processing plant exposed 14 workers to high levels of radiation and created a potential hazard for hundreds of thousands living nearby. We have this report from Andrew Veitch of Independent Television News.

ANDREW VEITCH, ITN: Radiation levels around the nuclear site near Tokaimura were 10,000 times higher than safety levels, and radioactive material was blown more than a mile from the site. Workers making nuclear fuel put too much uranium in a tank, setting off a chain reaction. The mixture went critical. There was a blue flash as radiation flared from the tank. Three men were rushed to hospital suffering from radiation sickness. Two are said to be critically ill. Senior officials at JCO, the company that operates the plant, issued a public apology. Residents within a six-mile radius of the plant have been advised to stay indoors, and 150 people living next to it have been evacuated to a nearby community center. The authorities said they did not have the experience to deal with the change reaction. American forces in country said they couldn't help either. 300,000 people live in the area and there are 14 other nuclear facilities. Japan relies on nuclear power to provide a third of its electricity. This, the country's worst-ever accident, will again raise questions over its ability to control it.

JIM LEHRER: Gunter Grass won the Nobel Prize for Literature today. The German novelist is best known for "The Tin Drum," a 1959 novel about life in Nazi Germany. The prize is worth about $1 million. And that's it for the News Summary tonight. Now it's on to the North Carolina flooding, a Bush campaign snapshot, suing HMO's, and controlling the use of satellite photos.

UPDATE - AFTER THE FLOODS

JIM LEHRER: Our flooding update is the work of Tom Bearden. He filed this report from Duplin County, North Carolina.

TOM BEARDEN: Elsie Stokes has spent days hauling garbage out of her house. That's because everything she owns is garbage now. She disinfects her hands obsessively...because her home was submerged for days in what amounted to a 20-mile long sewer. Since Hurricane Floyd struck the coast two weeks ago, nearly three feet of rain have fallen. That spawned floodwaters which swept over municipal treatment plants...huge sewage lagoons in surrounding hog farms...and the carcasses of tens of

thousands of dead cows, hogs, and turkeys. This entire Duplin County community was contaminated. Rain continued every day this week.

ELSIE STOKES: This is the worst. It's like you have everything, and waking up with nothing...nothing... not even a roof over your head. I think sometimes if it had been a fire, you know, it would have been better. But just come in here and just see all this, and know that all of your dreams is sitting out there in the front yard, everything you worked for, sitting in the front yard. And there's nothing in here. You clean and you

scrub and you cry. That's all you do.

TOM BEARDEN: The dean of the University of North Carolina's School of Public Health, Dr. Will Roper, shares Mrs. Stokes' concern about the potential for disease.

DR. WILL ROPER: There have been thousands of wells flooded, and contaminated, so it'll take awhile for the waters to come down and the wells to be treated and tested. The municipal water supplies in a number of communities have been overrun by the floodwaters, and they'll have to be cleaned out and purified and tested again. So the primary concern is the water and the purity of the water. It's going to take a lot of time, it's going to take a lot of money, and it's one thing I don't believe we've really anticipated because we're used to thinking of immediate concerns and is something

dramatic going to happen today or tomorrow. This is a much longer-term kind of concern.

TOM BEARDEN: Douglas Maready has a much more immediate concern: what to do with 250,000 pounds of dead turkeys. He had three poultry houses filled with

6500 turkeys that were just two days from being shipped to market, when

the flood drowned them all. Several houses on higher ground weren't damaged. That leaves him facing both a health problem and an economic problem. For one thing, local officials haven't been able to agree on how to dispose of the dead poultry.

DOUGLAS MAREADY: It's a situation where, from one day to the next, the county, we're waiting on the county to tell us what to do, and they're helping, through the

Soil and Water Conservation Office, they have got a little funds for us. We signed up last week on it. But it's only enough to do maybe about a third of it. As of today, I don't know what I'm going to do.

TOM BEARDEN: The flood cost Maready about a quarter of his annual income, and he'll continue to lose money until he can get back into production....if he can get back

into production. So far, the company he grows turkeys for hasn't told him when they might restock this undamaged house.

TOM BEARDEN: How long will it take to recover from this?

DOUGLAS MAREADY: We might go on, I do not know whether we will completely recover from it or not. It is going to put us in a situation where we are looking at all of our possibilities and all of our options. And I do not know what we are going to have to do to pull through it.

TOM BEARDEN: So you are kind of on the fence right now?

DOUGLAS MAREADY: Very much so. We not only lost the turkeys, we have got corn and beans in the field that we don't know what's going to be the outcome on them, all of them were underwater. At this time we do not know if it is going to be salvageable or not. It may rot in the field. The beans, I don't know what I got to finish filling out, so we are very much wondering what is going to happen to us in the future.

TOM BEARDEN: Maready is probably eligible for a low interest federal loan, but he says he already has too many loans; he needs a direct grant to survive. Weldon Denny is the Deputy Agriculture Commissioner for North Carolina. He says a lot of farmers may be forced out of business.

WELDON DENNY: The best estimate we can come up with is somewhere between 8 and 15 percent. And most of these are the independent ones that are not tied to a contract

farming operation or something of that kind.

TOM BEARDEN: What kind of effect will that have for the agricultural industry for the

state long-term?

WELDON DENNY: Well, it'll be devastating in parts of the communities down there. You've got certain communities in eastern North Carolina, that agriculture is it.

TOM BEARDEN: It's not just farmers who may lose their livelihood. In Duplin County, Terry Barnhart went through the trailer he was just one payment away from owning, trying to see if anything was salvageable.

TERRY BARNHART: It used to be a beautiful home, believe it or not... (tosses

furniture)... I don't see anything in here that can be saved...fungus is

growing...its really....lot of disease inhere.

TOM BEARDEN: Not only has he lost everything, he doesn't know when he might be able to go backto his job as a truck driver. And even if he were to get the call, there is no way to get there because his own vehicle had been underwater, too.

JIM JOHNSON: It just strikes me that the state has no choice but ...

TOM BEARDEN: Jim Johnson is on the faculty at the University of North Carolina's business school. He says thousands of people are in employment limbo.

JIM JOHNSON: You're talking about people for whom their employers are saying now

that they may not open for six or eight months. And the question becomes, what

are people to do who have families, who have bills and the like, how are they

going to survive until...and if...their companies reopen? So it's a major economic challenge, I think, to develop a strategy, a transition strategy, if you will, a relief strategy. I think there are two things that we got to focus on: The immediate needs of the population, but also what we might call economic relief, and then there is the question of recovery.

TOM BEARDEN: Eastern North Carolina has never been prosperous, and business has been hit hard in many towns. They're using heavy equipment to remove debris from

the Tarrytown Mall in Rocky Mount, about 100 miles north of Duplin County. This nearby restaurant has been closed for two weeks, and the owners say it'll take three more weeks of hard work before they can reopen. Beyond immediate repairs, Johnson says

North Carolina needs to maintain the intensity of the short- term relief effort and use it to redevelop the whole region.

JIM JOHNSON: I think the magnitude of the devastation is far too great to just rely on government, to just rely on the philanthropic community, or the private sector alone. I think it has to be all of those community stakeholders involved.

TOM BEARDEN: But back in Duplin County, Elsie Stokes says she hasn't seen much urgency in the relief effort. She says she spent days trying to contact the Federal Emergency Management Agency for help.

ELSIE STOKES: I spent five hours calling FEMA, solid. Redial, call, redial, and we finally got in touch with them out here at the Campbell Center, they were very nice to

us there, but we're still waiting. All you do is put your name on their list, and you wait and you wait...and sit by the phone. We don't have a phone to sit by, we don't have power for anybody to sit and wait ...for nothing. So we give our numbers to other people that's got power and we still haven't heard anything?

TOM BEARDEN: Jimmie Stokes says bitterly that under government rules he may have too many assets to get a grant from FEMA.

TOM BEARDEN: What are you going to do?

JIMMIE STOKES: Buddy, you ask me a question, I do not know. I wished I

did know. I hope to the Good Lord that something happens so that we can

get something to start over with.

TOM BEARDEN: While people in Duplin County may be impatient with FEMA, the agency is helping people in Rocky Mount start over. They've installed almost 100

campers to house families for up to 18 months. Eventually 340 units will shelter more than 1200 people here, and other sites are in works throughout the region. FEMA has also distributed 1.4 million dollars in direct humanitarian grants so far. Qualified families can get up to 13,600 dollars, based on income and need. Another $2.9 million in housing

assistance has been distributed to over 2300 families. But Mary Page, a volunteer relief worker in Kenansville, doesn't think the government is reaching everybody that needs help. She and her neighbors have taken matters into their own hands, turning the town auditorium into a distribution center for food, water, and cleaning supplies...all of it donated by local citizens. They're also trucking supplies to makeshift centers in outlying areas, where Page says isolated pockets of people have been all but ignored.

MARY PAGE: These people down here desperately need it.

FIREMAN: Trust me, we're giving it out.

MARY PAGE: That's what we want you to do.

FIREMAN: We just can't keep up with it.

MARY PAGE: It might get to a point where we're going to have to shut this down.

TOM BEARDEN: A FEMA spokesman says they have 400 people on the ground, and are bringing more in. They say they'll get to everyone eventually, and hope is that people won't have to wait much longer. There seems to be a consensus that it will take years for North Carolina's economy and ecology to recover from the floods that followed Hurricane Floyd. But relief workers say the immediate need for the most basic assistance...food, water, and shelter...is also far from being met, even though two weeks have passed since the storm. It rained against last night in eastern North Carolina, but the forecast is for a dry weekend, and flash flood watches have been cancelled.

FOCUS - CAMPAIGN SNAPSHOTS

JIM LEHRER: Now, another in our series of campaign snapshots from presidential campaigns. Tonight's is that of George W. Bush , and to Margaret Warner.

MARGARET WARNER: California sends more delegates to the Republican Convention than any other state, one fifth of all delegates needed to win the presidential nomination. And Texas Gov. George W. Bush was busy campaigning there this week. He began the day in Bakersfield, at a $25-a-head fundraising breakfast which drew 1,000 people to the Convention Center.

GEORGE W. BUSH: I'm running because as we head into the 21st century, I want our nation to be prosperous. But prosperity must have a purpose. We've got to be prosperous to keep the commitment to the elderly in America. We need to have a Social Security system that not only fills the promise of today but fulfills the promise of tomorrow. We've got to be prosperous to keep the peace; because a dangerous world requires a sharpened sword, I will rebuild the military power of the United States of America. (Applause) I want a campaign that will make you proud. I'm going to run a positive campaign. I'm going to reject all this negativism that tends to be a part of the political process. I'm going to talk about what I believe and what I stand on and why I'm optimistic about the future of this country. I'm going to bring new faces and new voices into the Republican party. And I intend to appeal to our better angels, not our darker impulses.

MARGARET WARNER: Then it was on to College Heights Elementary School, for an informal session with students, teachers and their parents. But the candidate made it clear he was there to talk to the kids.

GEORGE W. BUSH: I'm asking the students, I'll be with you in a second. I've got a dog named Spot. You know why they call, guess why they dog's named Spot? That's exactly the right answer, cause he's got a spot on him. We have three cats, too. One cat's named Cowboy. (Laughter) One cat's named Willie. And there's another cat named Ernie. (Laughter)

MARGARET WARNER: One child asked Bush what he would do for education, as President.

GEORGE W. BUSH: The only way to make sure that every child gets the kind of

education we want is for us to measure and know, and so I'm going to work with

the states to develop accountability, notice I say work with the states. I don't think there ought to be a national test.

MARGARET WARNER: The questions were more pointed at a press conference in the school library afterwards.

GEORGE W. BUSH: I know I'm just the warm-up act to Warren Beatty, but I'll give it my best shot. (Laughter)

MARGARET WARNER: He took questions on education, defense and taxes...including one on what to do with the budget surplus.

GEORGE W. BUSH: I felt like the idea of the current Congress's plan to, to send 25 percent of projected surpluses back was a reasonable amount of money; that we could, that we could lock box Social Security, meet basic needs and that 25 percent of the budget surplus going back

was fair and reasonable.

SPOKESMAN: Some of your supporters are saying that they're teaming up Perot and Buchanan to balance you. Do you think it's because of bad blood in the family?

GEORGE W. BUSH: Well, it's hard for me to tell; I hope not. I hope that, I hope that people enter the political process with what's best, what's best for the country in mind and not, not be making decisions based on personal vendettas. I've always thought in the 1992 campaign it was hard for my dad to get traction in the race because of the -- first Patrick J. Buchanan and then Ross Perot inflicted a series of, of cuts. If the adage it true, you die a death of a thousands cuts in politics, Ross Perot was a part of inflicting a part of the thousands cuts.

MARGARET WARNER: Bush was pressed on Buchanan's controversial views, expressed in his newly released book.

GEORGE W. BUSH: I think that -- I think obviously his, his kind of revisionist history about World War II is, is wrong. I'd like to see him stay in the primary. I'd like to

whip him in the primary.

MARGARET WARNER: But Bush took pains not to alienate Buchanan's supporters.

GEORGE W. BUSH: If he goes, he's gone. I understand that. But the question is

will his, some of the people who support Pat Buchanan who are loyal Republicans stay with the Republican nominee? And I think whoever the nominee is, is going to have to work

hard to unite the party.

MARGARET WARNER: Bush is campaigning in Northern California today and travels to Washington tomorrow for a Christian Coalition Convention.

MARGARET WARNER: For more, we turn to Dan Balz of the Washington Post. The NewsHour's working with the Post in covering the 2000 presidential race. As you just saw, Dan was traveling with Bush this week in California, and he joins us tonight from the Post's newsroom.

MARGARET WARNER: Dan, was that a typical day, I mean, a great big great crowd, very photographic -- photogenic event?

DAN BALZ: It was a very typical day in a very typical slice inside the Bush campaign. Most of his events are -- include a big fund-raiser with a lot of people. This was a lower dollar event than some, but they include many people. He gives the standard stump speech that he began giving in Iowa and June, and has changed very little. It's almost word for word what he's done since then. He's begun to give a few policy speeches since then, but one of his advisers said until -- jokingly -- until most Americans know the words of that stump speech by heart, they're going to keep giving it. The other thing that he does is he almost always going to a school generally where there Latino or African American children, does a photo op, talks with the children. He often does a short press conference with reporters but interestingly he does very little Q and A with voters which most other candidates do. It is a very controlled schedule. It puts Bush at his best and keeps him out of trouble.

MARGARET WARNER: Another thing that doesn't seem to have changed is his phenomenal money raising ability. The third quarter reports were due today and he's up to what, $56 million? Put that in perspective for us vis- -vis the other candidates.

DAN BALZ: Margaret, it's almost hard to but the it in perspective. I think if you stacked all of George W. Bush money in one pile it would smoother all of his opponents combined and in fact that's what it's done. If you look at it in some concrete terms, in the third quarter Bush raised more than I believe Bauer, Dole, McCain and Hatch have probably raised in the entire year in terms of the amount of cache on hand, he has roughly $37 million of cash on hand. John McCain has I think about $2 million. Nobody else has anywhere close to that. Now Steve Forbes obviously has his own money but in terms of this, it gives him the ability to run a luxurious campaign, to do everything he needs to do when everybody else will have to scrimp and save and cut corners and pick their spots.

MARGARET WARNER: But the figures you gave us in terms of his cash on hand suggest that she spending money at a rapid clip too.

DAN BALZ: Well, that is the interesting thing that we see in this third quarter report. The Bush campaign has prided itself and bragged really that they are a frugal campaign, a skin flint campaign; that they watch all their pennies. The reality is they are spending money at a much higher rate than Al Gore who has gotten a lot of criticism for the amount of money his campaign has spent. George W. Bush has now spent $19 million this year. He spent $12 million in the third quarter alone. It's a remarkable amount of money he's raising.

MARGARET WARNER: Yet he seems to be able to raise enough that doesn't really matter.

DAN BALZ: In terms of the percentage how much he is raising than spending, he is doing better than anybody else, but this is not a tight-fisted campaign. They're spending it where they need to spend it and they're building a national political organization with the money they've raised.

MARGARET WARNER: So, what is the thinking inside the Bush camp in terms of who they see as the biggest threat to Bush , or do they see one?

DAN BALZ: Well, it's interesting, Terry Neale, my colleague from the Post, and I were in Austin last week talking to a number of the Bush campaign staff. And we came away with a sense they have really changed their view of what this primary contest looks like. They were obsessed with Steve Forbes for most of the year primarily because Steve Forbes has a tremendous amount of money. And they expect him to spend it heavily, but now I think they see Forbes as a somewhat diminished threat. They are surprised he hasn't spent his money as heavily as expected. They were anticipating a barrage of negative ads. I think now what they're anticipating is what they kind of calling multiple skirmishes. They're going to have a different opponent in each of the early states. That they're going to have opponents picking and choosing the issues that they go after Bush on; that it may be Forbes or Dole in Iowa. It could be McCain in New Hampshire or it could be McCain in South Carolina. They think this will make a different kind of campaign, will force him to be responding in different ways in different states all at the same time.

MARGARET WARNER: Finally, he has been criticized by some for not taking on Buchanan in his views on his book, and we saw that a little bit in the tape. What is the thinking in the Bush camp on how to handle that?

DAN BALZ: Margaret, it seems a little confused. We got the clear impression when we were in Austin that Governor Bush was likely to be more assertive in taking on Mr. Buchanan. That didn't happen. He has been fairly delicate and he has gotten some criticism for that. I think they don't want to elevate Buchanan any farther than he is. And as the piece showed, they don't want to offend his voters. I think they believe that Buchanan is going to leave the party and go run for the Reform Party nomination, but they want all of those supporters to stay in the Republican Party if they can help it.

MARGARET WARNER: All right. Dan, thanks a lot.

DAN BALZ: Thank you.

JIM LEHRER: You can get more information on this story on the "Washington Post" web site, as well as ours.

FOCUS - SUING HMO'S

JIM LEHRER: And still to come on the NewsHour tonight, suing HMO'S in Texas, and the power of satellite pictures. The HMO Story is reported by Susan Dentzer of our health unit, a partnership with the Henry J. Kaiser Family Foundation.

SPOKESMAN: We believe you can't sue your way to better health.

SPOKESMAN: The people that they have harmed have a right to go to court.

SUSAN DENTZER: While members of Congress debate a so-called "Patients Bill of Rights," the eyes of politicians and many health policy experts are on Texas. That's where a controversial law was passed in 1997. Texas became the first state in the nation to allow patients to sue managed care plans for damages in state court if they were denied medically necessary care. So far, four lawsuits have gone to court, including that of 66-year-old Rosemary Dudley, a former nurse who suffers from advanced breast cancer.

ROSEMARY DUDLEY: I've never been lawsuit conscious, but when I get to thinking about this, I can... I just get to feeling very bitter and vindictive, and think that... anything isn't bad enough to happen to these people.

SUSAN DENTZER: Dudley's suit cites the Harris Methodist Health Plan, along with her former physician and employer, Dr. Jack Hardwick. Dudley says Hardwick stopped referring her to her cancer specialist during critical phases of her illness. She says he wrote, at one point, "no more visits" on a letter from one specialist. When the breast cancer spread to Dudley's jaw and she required more chemotherapy, Hardwick once again refused to give her a referral.

ROSEMARY DUDLEY: He said, "You can go home, and we will treat symptoms as they occur," which means that he would give me pain medicine. And I just looked at him. I was so angry to think that he was denying me this chance.

SUSAN DENTZER: What did you think he was saying to you?

ROSEMARY DUDLEY: "Go home and die, and save me money." And that's what I said. He was playing God, and deciding who should live and who should die, just to put money in his pocket.

SUSAN DENTZER: Dudley claims Hardwick's reason was that he would lose income from the Harris plan if he referred too many of his patients to costly specialists. Neither officials of the Harris plan nor dr. Hardwick would comment on camera about Dudley's lawsuit. However, Hardwick's attorney said in a statement: "Dr. Hardwick's patients always received care that met or exceeded standards for our community, and the patients were seen by specialists when appropriate...We are confident that the courts will agree." The Texas lawsuits, including Dudley's, are now in the courts. Meanwhile, states like Georgia and California have enacted similar bills, and a number of other states are also considering legislation. Coupled with the drive in Washington for a Patients' Bill of Rights, these trends have prompted a high-stakes lobbying campaign by healthplans and employers.

SPOKESMAN IN COMMERCIAL: I could be sued for providing health insurance for my employees? That could cost me my business!

SPOKESMAN: Call Congresswoman Cubin now, and say you can't afford this bill.

SUSAN DENTZER: The bill in question is sponsored by Representative Charlie Norwood and a bipartisan group of lawmakers. Its most controversial provision would remove a key stumbling block in federal law that has deterred many lawsuits against health plans. Known as ERISA-- the Employee Retirement Income Security Act of 1974-- it effectively prevents many people from recovering damages if a health plan's actions resulted in injury. It also bars many lawsuits against health plans in state courts, where juries have been more inclined to favor plaintiffs with big awards. Richard Carter is a plaintiffs' attorney and adjunct professor at Georgetown University's Law School.

RICHARD CARTER: The practical effect of ERISA is that for people in HMO's, or in any managed care organization, their right to bring a suit for a denial of benefits or improper utilization review is reduced to almost nothing. It's been the subject of a number of cases where the judges have said in the strongest language possible that "this is a crazy result, but there is nothing we can do under the law." And the law needs to be changed.

SUSAN DENTZER: In crafting the Texas law, the state legislature tried an end-run around ERISA.

DOCTOR: How you doing?

SUSAN DENTZER: The statute regulates the quality of care, an area of regulation typically left to states, rather than health insurance benefits, the area generally governed by ERISA. In effect, the legislature said people could sue for damages in Texas courts if their health plans failed to exercise ordinary care in making treatment decisions. Now that many in Congress want to make sure other states can do the same, Texans are debating the results of their own law.

JERRY PATTERSON, Texas Association of Health Plans: What I'm really concerned with is that the Congress will use the Texas example without knowing what the Texas example proves, for something that they pass in this next session.

SUSAN DENTZER: Jerry Patterson heads the Texas Association of Health Plans, which represents more than 20 HMO's and other health insurers. He and other opponents of the law argue that it will eventually trigger a flood of lawsuits and huge damage awards. In turn, they say, that will drive up health insurance costs, and cause thousands of Texans to lose their coverage. But the legislation's supporters, including Texas Insurance Commissioner Jose Montemayor, note that the direst predictions haven't yet come to pass.

JOSE MONTEMAYOR: There have not been a deluge of lawsuits, to be very, very sure. It has been a real success story. It largely allowed us to put in place a system of consumer protections that I believe is at the leading edge in the rest of the country.

SUSAN DENTZER: Richard Evans is a lobbyist for the Texas Chamber of Commerce. He argues many prospective suits have been put on hold while a federal appeals court reviews the Texas law.

RICHARD EVANS: We think the plaintiff's bar is sort of waiting in the wings until we have that first case adjudicated, and then move forward with probably a number of cases they've waited to file.

SUSAN DENTZER: But Rosemary Dudley's attorney, George Parker Young, insists that prediction is overblown.

GEORGE PARKER YOUNG: It's expensive to bring these cases. You've got to have managed care experts and medical experts, and the HMO's defend these things like the tobacco companies do. I mean, it's no-holds-barred, scorched earth, most expensive lawyers they can find.

SUSAN DENTZER: Has the Texas law produced any of the results that either its supporters or opponents claimed? Most observers think the verdict isn't yet in. What is clear is that for a variety of reasons, only a handful of lawsuits has resulted to date, and most people agree that the one clear benefit of the law has been a process of independent external review of health plan decisions that seems to work well for everybody.

DR. ROBERT SLOANE: The patients apparently think it's a success. I've not heard any physician say that he is unhappy with that process. I think the health plans would acknowledge that it's a success, also.

SUSAN DENTZER: Dr. Robert Sloane is a Fort Worth trauma surgeon who chairs the Council on Legislation for the Texas Medical Association, the largest physician's group in the state.

DOCTOR: Just take the fluid out of the...

SUSAN DENTZER: Sloane says the new review process gives people denied care the right to an independent review of that decision by qualified professionals. They have the power to overrule the plan and force it to pay.

DR. ROBERT SLOANE: We've had in the two years about 700 cases that have been requested for review by the patient. Out of those 700, roughly half have sustained the HMO's behavior and decision.

SUSAN DENTZER: The other half of the time, the independent reviews have reversed the plans.

DR. ROBERT SLOANE: Those patients have felt, I think, that they've had their day in court.

SUSAN DENTZER: The independent review process begins after a plan has denied care, or refused to pay for care that has already been delivered. A patient can first appeal the decision through the plan's own in-house review process, but if that's unsuccessful, he or she can then turn to the Independent Review Organization, or IRO. The IRO obtains all relevant medical records, and sends the case to one of several hundred qualified health care providers for review. In life-threatening situations, the review can take as little as one to five days. The cost is borne by the health plan. Phillip Dunne is chief executive officer of the Texas Medical Foundation, one of two IRO's in the state. He says the process has shown that some plans seem to be denying care more than others.

PHILLIP DUNNE: There is a plan that I'm familiar with where 90 percent of the cases that we see from them, we uphold their decision. Contrarily, we see a number of plans where we're reversing up to 80 percent-- I'm being honest-- sometimes maybe 90 percent of the time.

SUSAN DENTZER: Amy Thompson and her four- year-old son Bryan are among the beneficiaries of the independent review process. When Bryan was a toddler, his mother thought he suffered from an especially bad case of the terrible twos. Then, almost a year ago, Bryan's behavior grew worse.

AMY THOMPSON: He was kicked out of the daycare for aggressive behavior. I mean, he had just turned four -- biting, kicking, screaming, kind of acting like two-year-old behavior.

SUSAN DENTZER: Outpatient therapy and medication for attention deficit disorder failed to help. Bryan's physician at Cook Children's Hospital in Fort Worth then diagnosed him with bipolar disorder, a condition he apparently inherited from his father. The doctor recommended that Bryan be hospitalized for intensive observation and treatment. But the company that administered mental health benefits for Thompson's HMO said no.

SUSAN DENTZER: What did they say?

AMY THOMPSON: That it wasn't medically necessary at the time, that the diagnosis... and I told them that I had the book that bipolar was listed as a serious mental illness that should be listed, and they told me that, well, he was not five. And I said, "There's no age limit in here."

SUSAN DENTZER: After rounds of fruitless phone calls to the company, Thompson pressed for independent review. The IRO concluded that her health plan, HMO Blue of Texas, should have paid for more of his recommended care. HMO Blue of Texas says that for various reasons, the case should never have gone to the IRO. Nonetheless, it has agreed to abide by the decision. Bryan, meanwhile, is on other medication, and continues in outpatient therapy. His mother says he's a new child.

AMY THOMPSON: He's slowed down a whole lot. Normally, he would not be sitting over there and doing that. I mean he would be bouncing off the walls in here. And, I mean, he's just doing fantastic.

SUSAN DENTZER: Today, it's virtually a universal belief in Texas that independent review has worked for everybody. The law's proponents say that, together with the expanded right to sue, the independent review process has made health plans more careful in evaluating whether care is genuinely needed. And even the health plans are vocal in their support of independent review. Health Plan Representative Jerry Patterson.

JERRY PATTERSON: We're big fans of the external review, or independent review procedure, very much so.

SUSAN DENTZER: In spite of the acceptance independent review, it is currently in legal jeopardy. Last year, a federal judge struck down that section of the Texas law, arguing it was preempted by ERISA. That decision is currently on appeal. Legal experts say unless Congress acts soon to change the law, Texas's novel effort to regulate health plans could be headed for the Supreme Court.

FOCUS - SHUTTER CONTROL

JIM LEHRER: Finally tonight, media correspondent Terence Smith reports on a new technology that's raising questions for news organizations and the government.

SPOKESMAN: We have ignition and liftoff of the Athena II launch vehicle and Ikonos Satellite.

TERENCE SMITH: Last week, a color Colorado company successfully launched a satellite named Ikonos, the ancient Greek word for "image." The satellite will be capable of taking images closer to the quality of the best U.S. intelligence photographs. In the near future images like this will be commercially available to all at a cost of a few hundred dollars. These photos were taken from a plane, but they indicate how clear the new satellite imagery will be...so clear it's possible to distinguish yard lines on a football field. The images will discern objects only a few feet wide, so-called "one meter" resolution, until now available only to intelligence agencies. Here, for example, is an overhead photo of the U.S. Capitol at 10-meter resolution. And here's the same picture with one-meter resolution. According to Space Imaging, the company that launched the satellite, the more fine-grained images will have a variety of applications, as described in this corporate marketing video.

SPOKESMAN IN CORPORATE VIDEO: Oil and gas exploration, national security, disaster assessment.

TERENCE SMITH: And, of course, the media, which will be able to purchase the images for broadcast and publication. CBS News Producer and Technologist Dan Dubno.

DAN DUBNO: The effect of the satellite imagery will revolutionize the way we tell stories in the news business.

TERENCE SMITH: Dan Dubno points out that satellite imaging is not new. The media have been buying it and using it for years. Recently, satellite pictures were a staple in CBS's hurricane coverage. But never before have such precise, detailed pictures from space been commercially available to the public.

DAN DUBNO: The great thing about satellite imagery is that it's generally most useful in showing us denied areas, areas where our own cameras can't go to automatically.

TERENCE SMITH: Areas like Iraq, where CBS Correspondent Mark Phillips was earlier this year as anti-aircraft fire went off overhead.

DAN DUBNO: He was not allowed to show the images of the places that he saw, but within a few minutes we were capable of showing not only where he was but accurately indicating the areas that were attacked by the U.S. bombs and missiles. This is basically five-meter imagery.

TERENCE SMITH: And one-meter resolution will supply even more detailed imagery, making it possible to identify specific buildings or planes on the ground, information that the government could consider too sensitive for public consumption in wartime or emergency situations. It is for that reason that the 1994 presidential directive authorizing commercial use of one-meter technology contained a little-known restriction called "shutter control." It gives the government the power to order private companies like Space Imaging to stop taking pictures in "periods when national security or international obligations and/or foreign policies may be compromised."

DAN DUBNO: Well, there is the hope of the First Amendment principle in this country that we have the right to tell stories, we have the right to put cameras where we want to put them. This camera in space in our minds and the minds of many journalists is no different than a camera anywhere else.

TERENCE SMITH: In 1997, Congress added an additional restriction, stipulating that companies like Space Imaging could not provide images of Israel more detailed than those available commercially from foreign sources. Israel is the only country mentioned by name. Dubno and CBS are not alone in their concerns about these restrictions. The Radio, Television News Directors Association and the National Association of Broadcasters have both filed an objection with the government, saying that the rules violate the First Amendment and allow for unconstitutional prior restraint. The debate over this new age of space transparency is coming to a head just as more U.S. companies, as well as others in France, India, the Cayman Islands, and Israel, are preparing to launch similar satellites with similar capabilities.

TERENCE SMITH: We'll continue the debate about shutter control and the uses of satellite imaging with three people close to the subject: James Woolsey, former Director of the Central Intelligence Agency and a Washington attorney; Barbara Cochran, former Washington Bureau Chief of CBS News who is the president of the Radio Television News Directors Association; and Senator Bob Kerrey, a Democrat from Nebraska, who is Vice Chairman of the Senate Intelligence Committee. Welcome to you all.

Jim Woolsey, let me begin by asking you: What are the dangers from the government's point of view?

JAMES WOOLSEY: I think the main thing that was going through people's minds when they came up with this in the early 1990's, this shutter control business, was protecting Schwarzkopf - in the future or future Schwarzkopf's ability to execute the "Left Hook" that won the ground war against Iraq. You don't want imagery of that being disseminated while he's pulling his forces together. But I think the government - although it was on to an important principle - as sometimes happens, it has overdone it here. By giving the responsibility to the Secretary of Commerce and letting him consider things from other agencies, they've got a situation such that this camera could theoretically be turned off if there were demonstrations in Tiananmen Square and the Chinese weren't letting anybody see them and the Secretary of State should recommend that well, it's not in the country's foreign policy interest for this to be broadcast, so I don't think that would occur, but this is worded much too broadly for the limited and important purpose of protecting troop movements in wartime and the like.

TERENCE SMITH: Senator Kerrey, that does sound like broad language. Do you believe that the administration truly needs shutter control?

SEN. ROBERT KERREY: I think they need it. I agree with Jim. I think that's much too broad, however, I would prefer to have some kind of statutory board where you could get an up or down vote, you don't - it would be a bit more in public - as opposed to something that's sort of driven inside the bowels of bureaucracy. You get a "no" decision, and you never know exactly why. And let me praise Jim Woolsey again. I mean, I worked very closely with him when he was DCI to try to get this policy changed so that we could get one-meter images available to the public. And I think it's going to vastly improve the quality not just of images but the quality of decision making that the public makes as a consequence of having this kind of information available to them.

TERENCE SMITH: Barbara Cochran, what sort of conflicts do you expect to arise over this between the media and between those who would exercise shutter control?

BARBARA COCHRAN: Well, sometimes the media does voluntarily exercise restraint and for example, in the case of Schwarzkopf's "Left Hook," most of the media knew about it and did not report on that. But there will be times - and I think Jim Woolsey gave a very good example -- where a foreign policy embarrassment would be the reason that the executive branch would want to prevent these images from being shown or being made available to the public. Our position is that all of these disputes between the news media and the government should be resolved the same way these matters have always been resolved under our Constitution. We will go to the Judiciary. The government will be required to present evidence of why this kind of release would represent a clear and present danger to national security, and the Judiciary will decide these matters.

TERENCE SMITH: Right. Although the clear and present danger, that more specific language is not actually in there. Let me ask Jim Woolsey, who is going to decide when to turn the cameras off?

JAMES WOOLSEY: Well, in principle, the way these rules are written now, the Secretary of Commerce, based on advice of the Secretary of State and Defense - and I think that's the wrong person. I think this ought to be the President of the United States. It ought to be a very serious circumstance, and I think Senator Kerrey has a good point, perhaps pursuant to some type of statutory standard. But one reason why I don't think it will work for people - the government to have to go into court in order to exercise prior restraint under the clear and present danger standard -- is once these images are down they're not just in the hands of the Lehrer NewsHour and CNN and the New York Times, you can buy them for a couple of hundred dollars on the web and put them on your website, I mean, you know - Terrorist.Org might well be delighted in putting these out. So, you've got to do something at the camera level I think, not at the court level, but they've gone too far in what they're trying to do.

TERENCE SMITH: Senator Kerrey, is it - is it realistic in an age when we expect other countries to have similar capacities very soon within the year, France, Israel, there's one in the Cayman Islands that is going to launch - does that - does shutter control make sense in those circumstances?

SEN. ROBERT KERREY: Well, I think it still makes sense. I mean, we have responsibilities that France and Israel do not have, responsibilities that not only will keep the people of United States of America safe but the world safe as well. So I don't object to the United States saying that we ought to have shutter control, but we need to do it in a way that enables the decision to be made relatively quickly, as opposed to it being made and nobody knowing what's going on. Yet, I think Jim's right that you probably ought to drive it over to the President of the United States, so that he has the ultimate and final decision. But let me make it clear, it's a very exciting thing that's going to happen when these images become available that we're not talking about, and that is that you're going to see an increased capacity of citizens to make decisions about a whole range of things as a result of getting those images, and I wish we could get further action on the part of NIMA and other federal agencies to declassify and bring these images out to the American people because it makes it easier for citizens to make decisions when they get, you know, good geographical pictures. And any shot at the news today will tell you how far behind we are today in having good geographical images.

TERENCE SMITH: Jim Woolsey.

JAMES WOOLSEY: That's a very important point, and it's also the case that the closed societies have a lot more to fear from this than the open societies. We have a few things that occasionally we need to protect from space like Schwarzkopf's "Left Hook," but the Iranians and Iraqis and North Koreans, and, for that matter, the Chinese have a lot more things that they want to keep from the rest of the world. This is a much bigger problem for them than it is for us.

SEN. ROBERT KERREY: Boy, I'll say it is. That's a very good point.

TERENCE SMITH: Barbara Cochran, I assume that one central issue for the media is this notion of prior restraint, a very sensitive point, in other words, stopping the reporting before it begins.

BARBARA COCHRAN: That's right. And under our Constitution the government has always had a very heavy burden of proof before they are allowed to exercise prior restraint, and again, I would - I think that the courts are the right place to settle this, that this is - we shouldn't leave the third branch of government out and I believe the third branch of government will not react well to being left out. But what Senator Kerrey was saying about the usefulness of this material to citizens is absolutely correct. And the government doesn't have a very good track record in making this material available. The agency that he mentioned has been keeping declassified images secret for a long, long time, and those images could be used now to help assist in coverage of stories like Hurricane Floyd.

SEN. ROBERT KERREY: We, by the way, are having a meeting with General King to try to get that changed in the next couple of days.

BARBARA COCHRAN: We'd be glad to help.

TERENCE SMITH: Do you plead guilty to that - not you personally but the government, the agency?

JAMES WOOLSEY: The National Reconnaissance Office and the Director of Central Intelligence - the people who have had that job - have gone through a rather substantial evolution on this issue I think from the late 80's till today. I tried to make a number of changes when I was DCI, and we do have, for example, now archaeologists in Iraq sending word back that they are delighted with the older imagery that we've turned loose from Corona, because they're able to look at imagery of some of the ancient cities there. There are a lot of changes that are taking place, but everything was not turned loose immediately that could have been turned loose if the CIA and the National Reconnaissance Office had had the manpower to screen everything.

TERENCE SMITH: All right. Senator Kerrey, you said you're trying to get that change done in the next few days?

SEN. ROBERT KERREY: Well, we're having a meeting with General King; we actually initiated a program called Imaging for Citizens that I had hoped would make these five-meter images more available to the public quicker, but Barbara's exactly right; they've been withheld and we're trying to get that changed. But I could not underscore more strongly what Jim Woolsey said earlier about the closed nations of this world having a lot more at risk than the United States of America. And that's one of the big advantages - especially in a country where we are the leading democracy, the leading military and the leading economy, we have a lot of responsibility, and our citizens are the ones that have to make those decisions.

TERENCE SMITH: Well, the Israel exclusion is an interesting case. That's written into legislation in 1997. Won't that invite other countries to ask for similar privileges?

SEN. ROBERT KERREY: Well, it's a very interesting provision, especially since Israel is going to be launching commercial satellites, going to be selling the very same thing; we've got a provision that doesn't allow us to sell them, and they'll be selling it. Yes, it's a very interesting provision. I don't think it's a very sound provision.

TERENCE SMITH: All right. Barbara Cochran, what would prevent the media - if denied images here in the United States - from simply purchasing them abroad and putting them on the air or in newspapers in the United States?

BARBARA COCHRAN: Absolutely nothing. And that's the shame of these rules, as they're presently constituted. The companies that they hurt are U.S.-based companies.

SEN. ROBERT KERREY: That's exactly right. And it hurts the citizens' ability to make their decisions good, because they don't get these images, and, as a consequence, they're not able to become as informed as a picture can inform you.

TERENCE SMITH: Jim Woolsey, a final word. Diplomatic embarrassment - you mentioned that before - that's not legitimate.

JAMES WOOLSEY: I don't think that's legitimate. I think it ought to be national security and really in the military sense something that is going to run the risk of killing a lot of people, American soldiers, or - or a terrorist incident or something like that. There needs to be something that rises to the President's level of consideration to save American lives. I think under those type of circumstances some type of shutter control is certainly warranted.

TERENCE SMITH: Okay. Senator Kerrey, Barbara Cochran, Jim Woolsey, thank you very much.

JIM LEHRER: For the record, U.S. Government officials were asked to participate in that discussion but none were available to do so.

RECAP

JIM LEHRER: Again, the major stories of this Thursday. President Clinton signed a temporary spending bill to keep the federal government going another three weeks. The Commerce Department reported the Gross Domestic Product rose less than expected from April through June. And a powerful earthquake struck Mexico. It measured 7.5 on the Richter Scale. Eight people were killed. We'll see you online and again here tomorrow evening with Shields and Gigot, among others. I'm Jim Lehrer. Thank you and good night.