The MacNeil/Lehrer NewsHour

Intro

ROBERT MacNEIL: Good evening. These are today's news headlines. After personal lobbying by President Reagan the Senate gave him a big victory on the MX missile. Ohio's governor went to Washington for help in solving his state's banking crisis. Housing starts fell sharply in February. The stock market had a big rally today. Jim?

JIM LEHRER: On the NewsHour tonight, two focus segments and a newsmaker interview; two House members take today's Senate vote on the MX to the next debate step; a Kwame Holman report from Pennsylvania on steelworkers goes with a new study to look at post-recession wages that are not recovering; and Judy Woodruff, in a newsmaker interview, talks with the president of Argentina. News Summary

LEHRER: President Reagan won a big one on the MX missile late today. The Senate voted to continue funding for it. The vote was an unexpectedly easy 55-to-45 win. Vice President Bush was standing by to cast a tie-breaking vote if needed, but it certainly wasn't. The vote followed a last-minute round of successful lobbying featuring the number-one lobbyist of all, President Reagan. He came to the Capitol for handshakes, smiles and lunch with senators from the Republican side of the aisle, the main course being a tough sales pitch for the MX, the missile the President calls the Peacekeeper.

Pres. RONALD REAGAN: On the Peacekeeper you have a clear choice. A no vote will gravely weaken our national defenses, waste the billions already spent on the Peacekeeper program, undercut our allies, who have already stood firm in accepting the new Pershing and cruise missiles, cripple the position of our negotiators in Geneva, and show the Soviets that despite the progress our country has made at a moment of historic importance, a majority in the Congress of the United States still lacks resolve. In the wake of world peace, that must not happen. If you vote yes, you'll show the Soviets that America today is united and resolute and thereby advance the cause of peace for us and our children. With all my heart I ask for your support.

LEHRER: The Senate debate which then led up to the successful vote was tracked for us by Cokie Roberts of National Public Radio.

COKIE ROBERTS, National Public Radio [voice-over]: The debate on the Senate floor was subdued and serious. The MX is familiar territory the Senate's covered many times before. But this time one noticeable new argument dominated the MX debate, the beginning of arms negotiations in Geneva, and almost all debate focused on those talks. Republican Armed Services Committee member Pete Wilson of California argued voting for the MX does not guarantee an arms reduction agreement in Geneva, but a defeat for the missile on this or any other day could guarantee failure of those arms reductions. It was a tough argument to counter, though MX opponents kept trying until the end. A critical moment came when the Democratic leader, Senator Robert Byrd of West Virginia, announced his decision to back the President and vote for the missile after weighing his view that while, on balance, MX deployment does enhance our military prowess, it also creates uncertainty in our strategy. Democrats like Byrd have skirted carefully around this issue, worrying about the political effects of a vote against the MX, fearing their opponents will brand them soft on defense. The floor leader against the missile, Colorado Democrat Gary Hart, tried to answer that concern by talking about security, insisting that deployment of more MXs would weaken this country strategically and economically. But the merits of the MX missile itself had little to do with the decision of the Senate today. Senator Barry Goldwater, the Republican manager of the resolution to approve funding for the missiles, made the request senators have been hearing from the administration for weeks. "I'm asking for your vote," he said, "not to support the MX but to uphold our commander-in-chief in a decision we may disagree with."

LEHRER: We look at the next step for the MX, the vote in the House, in our lead focus segment tonight. Robin?

MacNEIL: Ohio's banking crisis continued another day today with the legislature still seeking a solution while depositors' tempers rose and Governor Richard Celeste went to Washington. He asked for quick approval of applications by Ohio's closed savings and loan banks for federal deposit insurance, and said this evening he's getting excellent cooperation on that. Behind him in Columbus the governor left his state legislature still struggling to pass a bill to ease the crisis. Here's a report from George Zimmerman of Ohio Public Television.

GEORGE ZIMMERMAN, Ohio Public Television: Efforts to reopen Ohio's 70 closed savings and loans have hit a partisan roadblock in the state senate. Republicans control the Ohio Senate, and they've rejected legislation proposed by Democratic Governor Richard Celeste.

PAUL GILLMORE, (R) President, Ohio Senate: The governor's bill jeopardized the survival of 25 to 30 savings and loans and the financial security of their depositors.

ZIMMERMAN [voice-over]: The legislation would have required the savings and loans to get federal deposit insurance or merge with financially stronger institutions. But the Republicans say many might be forced to be liquidated. Senate President Gillmore, who may be a candidate for governor next year, wants Celeste and his regulators to decide which savings and loans can reopen rather than the legislature mandating requirements for reopening.

Sen. GILLMORE: We want the people that have the information, have all the records, have the books, have done the examinations, to make those determinations who should reopen and when in order to protect the depositors. That's their job. I think they ought to get on with doing it. And we're willing to give them the authority to do it.

ZIMMERMAN [voice-over]: Senate Democrats have the opposite view.

HARRY MESHEL, (D) Senate Minority Leader: Well, it's absolutely up to the legislature to define the standards under which our financial institutions will function in the state of Ohio. It's as much our responsibility as anybody else's.

ZIMMERMAN [voice-over]: Late today the Senate did pass a bill which would allow depositors to withdraw up to $750 per month from the closed savings and loans, but no permanent solution to the crisis is in sight.

MacNEIL: In reaction to the Ohio savings and loan crisis the price of gold rose $35.70 an ounce in New York today. That's one of the largest increases on record. Market observers said foreign speculators fear American banking problems may be more serious than expected.

In other economic news today the government reported that housing starts fell 11 in February, the biggest decline in almost a year. Some analysts blame the statistic on erratic swings in apartment building activity. Others said mortgage rates have begun to rise.

Wall Street had an up day. In the final hours of trading the Dow Jones average of industrial stocks rose to close up more than 21 points, at 1271.09.

LEHRER: The Supreme Court today said it was all right to selectively prosecute those who do not register for the draft. In a seven-to-two vote the high court said the government's decision to single out those who publicize their actions did not violate any constitutional rights. The decision clears the way now for the prosecution of several young men who had challenged their prosecution on the singled-out argument. The government no longer prosecutes only those who have been vocal and public in their refusal to register, however.

In another legal matter today White House spokesman Larry Speakes said President Reagan favors the government's picking up Anne Burford's $211,000 legal bill. Burford resigned under fire as head of the Environmental Protection Agency two years ago. She said in an interview published yesterday that then-White House counselor Edwin Meese, now the attorney general of the United States, promised the government would pay her lawyer's fees if she would resign. Speakes said Mr. Reagan believes it would be appropriate and should be appropriate for that to be done.

MacNEIL: In Lebanon, thousands of people fled from the suburbs of the southern city of Sidon, where the Lebanese army was battling against a rebellious faction of Christians. At least five people were killed and 39 wounded.

In Iraq, foreign correspondents reported seeing hundreds of dead Iranian soldiers at the scene of a seven-day battle in the marshes of the south. Iraqi army commanders on the battlefield claimed a major victory. Here's a report from Chris Morris of Visnews.

CHRIS MORRIS, Visnews [voice-over]: Iraqi troops were celebrating a decisive victory. They've successfully repulsed a large-scale Iranian offensive, claiming to have totally wiped out eight army divisions. The fierce fighting lasted a week as the Iranians tried to cut off the main highway between Baghdad and the southern port of Basra. But they paid a terrible price as the Iraqi forces trapped them in a classic pincer movement in the marshlands.

MacNEIL: Today both sides were bombarding each other's cities. Iran said it fired a ground-based missile at Baghdad and 14 people were killed in an explosion there. Iraq said its warplanes attacked five Iranian towns, but there was no report of casualties. And several hundred foreign residents flew out of Teheran to cities in Europe just before the hour when Iraq said it would make Iranian airspace a war zone.

LEHRER: President Reagan today welcomed Argentine President Raul Alfonsin and the return of democracy to Argentina. Alfonsin's 1983 election marked the end of seven years of military rule in that South American nation, and Mr. Reagan put on a full pomp-and-circumstance welcome at the White House for him. The two presidents talked of Argentina's continuing economic problems, among other things. In their welcoming statements both also raised the issue of Nicaragua.

Pres. REAGAN: I can assure you in the strongest terms that the people of the United States want you and the people of Argentina to succeed and to prosper. This prospect is made even more likely now that Argentina has returned to the ranks of democratic nations. Today is an exciting time to be an American, and I mean all of us, from the north slope of Alaska to the tip of Tierra del Fuego. More people here are living in democracy than ever before. Ninety percent of this hemisphere's population lives in democracies or in countries in transition to democracy. This trend, however, is threatened by Marxist-Leninists who continue with the heavy support of the Soviet Union and Cuba to undermine freely elected governments and democratic movements.

RAUL ALFONSIN, President of Argentina [through interpreter]: Of course in our dialogue the subject of Nicaragua and Central America will not be absent, convinced that is through dialogue that we will be able to reach peace [on] the basis of the principle, a long-standing principle of international law in Latin America of non-intervention.

LEHRER: Judy Woodruff interviewed President Alfonsin after he met with President Reagan. We'll have that interview later in the program.

MacNEIL: Hollywood scriptwriters returned to work on the West Coast today after voting to end their strike and accept a three-year contract offer from motion picture and television producers. As a result, new episodes of popular series like "Hill Street Blues" will be back in production, and programs like "The Tonight Show with Johnny Carson" are resuming normal, same-day production schedules. The issue that threatened a longer strike, compensation for sales to home videocassettes, was settled when the Writers Guild agreed to accept a percentage of the producer's gross receipts for videocassette sales. MX Vote

LEHRER: The MX missile passed its first congressional test in a big way today, the Republican-controlled Senate voting to continue funding for it by a sizeable 55-to-45 margin. Now it goes to the House of Representatives, where, in numbers at least, the Democrats rule. We preview that next step now with two House Democrats who see it differently. On the pro-MX side, Congressman Norman Dicks of Washington state, a member of the Defense Appropriations Subcommittee. On the anti-MX side, Congressman Thomas Downey of New York, chairman of the Budget Committee's defense tjask force. They are both with us from the studio on the Capitol.

First of all, Larry Speakes, the President's spokesman, said today that this vote was the make-it-or-break-it vote on the MX. Congressman Dicks, you agree?

Rep. NORMAN DICKS: Yes, I think this vote was very important. The President clearly prevailed because of the proximity to the start of the arms control talks. I think it's going to be very close, however, in the House of Representatives, and I also believe that you'll see a much more thorough review of this program in the context of the '86 authorization and appropriations bill.

LEHRER: Congressman Downey, what's your view of today's vote and its importance in the long run?

Rep. THOMAS DOWNEY: Well, I think Mr. Speakes has made a mistake because the House of Representatives, the vote is going to be very close. And I think at this juncture it's too soon to tell whether we have the votes or don't have the votes, and we'll be rehashing some of the Senate debate in the House of Representatives, but I think given the fact that we are a majority here, you'll see more Democrats stay in the fold.

LEHRER: But, Congressman Downey, everybody said today's vote in the Senate was going to be close and yet it turned out to be anything butclose.

Rep. DOWNEY: Well, I think that there were surprises on both sides. I think that the President was probably surprised by the number of Democrats that he got, but also somewhat dismayed by the number of Republicans that he lost. And we're in the process of analyzing that tally to see if it means anything for Republican votes here in the House. We are going to win or lose based on how many Republican defections there'll be.

LEHRER: Congressman Dicks, from your point of view, what is the major argument that should be made in favor of voting for the MX?

Rep. DICKS: Well, I think the arms control argument is the most important. Our negotiators last week told those of us who were observers in Geneva that they felt a vote against this system at this point in time would undercut their negotiating posture. I think the President made that argument very effectively with members of the Senate. And I think that there is a military requirement. The Scowcroft Commission basically stated it: we want to have some prompt hard target capability in order to get the Soviets to move out of their vulnerable silos into a more secure basing mode. and they're doing that by going mobile with their SS-24s and -25s. As we build Midgetman that will add to stability on both sides. And I believe that a deployment of somewhere between 40 and 50 MXs makes military sense, but yesterday Senator Nunn made it very clear that going beyond that will be something that the moderates in both the House and the Senate are going to want to take into account, and I think there is going to be a major review of this program in the '86 authorization bill.

LEHRER: But as a practical matter are you saying that if there was not -- if it was not for Geneva there would not have been this favorable vote today?

Rep. DICKS: Well, as you know, the last time the Senate voted there was a tie vote and the Vice President had to break that vote. And the only thing of significance that's changed since then is the fact that the administration and the Soviets are in Geneva and they're negotiating. And in my view I think most senators did not want to be in a position where it appeared that they were undercutting the negotiators and the President at this critical juncture. Now, I don't think the President should continue to make that argument on every defense issue because it'll lose credibility, but I think because of the start of these talks it had enormous credibility, and that's why we had a 10-vote majority in the Senate.

LEHRER: Congressman Downey, from your perspective how are you going to counter that powerful argument in the House now?

Rep. DOWNEY: Well, that is the argument that we've heard in the Senate, and there are two ways to look at the MX. First of all, does this weapon system add to U.S. security? It does not. We have never consciously deployed a system that we knew would not survive a Soviet attack, if that is what we're doing. Nobody really makes an argument, and Norm has made a brief one, for the fact that there is any military utility. If it hasn't survived a Soviet first strike, there is no military utility. There is no discussion about whether or not it can survive because everyone realizes it cannot. So the issue now turns on the question of, do we need this in order to get the Soviets to negotiate seriously, or will it undermine us at the talks? Let me make a prediction. In a year's time, in a year and half's time, no one will remember or care about the MX missile argument because the talks will have gone on to other systems that we're in the process of buildingand talking about right now. We've got 10,000 warheads aimed at the Soviet Union; we're preparing to spend money on a strategic defense initiative. That is what has focused their mind, not the addition of 21 missiles or not. And Norm has made an interesting point as well about the fact that the MX may be capped at 50. Well, then we'll see the President come marching back up to Congress and say, "You can't just build 50, you see. We have to have 100 or the Soviets will believe we've lost resolve." This is a lot of nonsense. This is a strong country with a survivable force right now. We should not be worrying about whether we're talking to the Russians, whispering to the Russians or not talking to them at all when we determine what is in the best interests of U.S. security policy, and in the best interests of U.S. security policy building a system that cannot survive an attack is not a good idea.

LEHRER: Well, what would you say then to Congressman Dicks [who] says that the negotiators, the people who are actually doing the negotiating in Geneva, say that they need this vote right now? You just say they're wrong?

Rep. DOWNEY: Well, they've all been appointed by President Reagan. My guess is that they're not going to suddenly say, "Well, Mr. President, thank you for the job. We think you've made a big mistake on MX." They are going to obviously toe the line and say we need it, but Mr. Nitze and others who have been up here to testify said, "Yes, we want the MX, but we don't believe it's crucial to the outcome of the talks," and I don't even believe Norm thinks it's crucial to the outcome of the talks.

LEHRER: But as a practical matter, Congressman Downey, I mean, clearly this is, what Congressman Dicks says and what everybody says, is what swayed the Senate today. How are you going to stop that same thing from happening in the House?

Rep. DOWNEY: Not easily. And then the point is that many members want to give the President the benefit of the doubt, and it is because the talks are starting that this turkey of a system has any chance whatsoever.

Rep. DICKS: Jim?

Rep. DOWNEY: If you remember what Mr. Aspin -- no, let me just make this one point. If you remember what Mr. Aspin said -- he's one of the leaders in the fight here in the House and chairman of the Armed Services Committee -- he said, "Look, if the Soviets come back to the talks, we won't have to build the MX." Now the Soviets are back at the talks and some Senate Democrats and House Democrats are holding it over the Reagan administration's head to keep them at the talks. This is quite a bargaining chip. The Senate Democrats use it to keep Reagan at the talks, and Reagan uses it to keep the Russians at the talks.

LEHRER: Congressman Dicks?

Rep. DICKS: Well, Jim, first of all, Congressman Downey has said this missile isn't survivable. The President's Scowcroft Commission said that because of the synergistic relationship between the bombers and the submarines that we had survivability, that in fact -- and Congressman Downey's made this speech -- no Russian is going to consider a first strike against the United States because of our retaliatory capability. And so, for the short term, that gives survivability to our land-based force. Now, I'd like to see that deficiency in survivability corrected over the long term, and we've got some interesting technology now that shows that we can get 50 survivability if we put MX or our Minuteman IIIs in hardened silos. And so there is a way to make the missile even more survivable and not rely just on synergism. But in my view at this point in time the basic argument will be that we're in these negotiations and it would be the wrong signal to send. Now, I agree with Tom, the President cannot make that argument every single time and he shouldn't overstate that position.

LEHRER: But you think it's a legitimate argument to be made to the House in this next week, correct?

Rep. DICKS: Absolutely, because the negotiators feel very strongly that part of their job is to show the Soviets that we're united as a country behind them. That's what the Scowcroft Commission recommendations did, is they gave us a united position that we should stay with --

LEHRER: Yeah, but what about Congressman Downey's point, well, they were appointed by President Reagan, what would you expect them to say?

Rep. DICKS: Well, they're over there doing the negotiating. They want this system because they believe it can be useful in the negotiations, one, to show resolve, but also it's something that might get the Russians to make major reductions in their -18s and -19s. I could see a situation where we get the Soviets to make an offer where they say, "We will reduce our -18s and -19s. We'd like to see you reduce the deployment of 100 MX missiles." And also they want to see us not deploy a strategic defense system in space, and that gives us the basis for an agreement. So I think it would be wrong at this moment to do anything that undercuts the negotiators' position.

LEHRER: Congressman Downey, as a Democrat are you the least concerned with the possibility of you and other Democrats being labeled as those who undercut the negotiation for arms control in Geneva?

Rep. DOWNEY: Well, I think that there are clearly Democrats who are concerned about that, and I don't want to make this a party issue because we welcome Republican support, and it's clear from the Senate vote there were many eminent Republicans who felt as we did, that you don't provide arms control talks with weapons systems that are vulnerable. So this is not just a partisan issue. But more directly to your question, I think my party has a case to make that the way to have a more secure world -- and I think that Norm and I both want a more secure world; I know we do -- that the combination of arms control talks, looking again at the Soviet offer for a freeze on the testing of ballistic missiles and on new types of missiles and some force modernization is the way to make our country secure. And I believe the Democrats can make an argument -- indeed, Norm has made this argument in the past -- that the real sinews of American strength are not only our economy and our educated populace, but our conventional force structure as well. And when you continue to develop and spend money on systems like the MX, which is not survivable, which is clearly only capable of waging a first strike against the Soviet Union, you weaken your national security. You don't strengthen it.

Rep. DICKS: Jim?

LEHRER: Yes, go ahead.

Rep. DICKS: One final point. I happen to believe that the real question here is deterrence. We want to avoid a war. Today the Soviet Union has 648 SS-18s and -19s with 5,000 warheads aimed at the United States. They have an enormous hard-target capability. They threaten our command and control, our leadership and every single one of our deployed ICBMs. And what this does is, in my judgment, give us some of that capability, which I think is necessary for deterrence and equality and makes it a convincing case that the Soviets would never attack us first.

LEHRER: Gentlemen?

Rep. DICKS: It only strengthens deterrence.

Rep. DOWNEY: Can I just make one quick point? The fact is --

LEHRER: Quickly.

Rep. DOWNEY: -- that Norm just talked about the fact that the Scowcroft Commission reported that we have deterrence right now and that we do. And that's the most important thing for people to understand.

LEHRER: I've got to figure out a way to deter both --

Rep. DICKS: They also recommended that we have some MX missiles.

Rep. DOWNEY: That's true.

LEHRER: We have to go. You've given us a good preview of what's coming next week. Thanks to you both.

Rep. DICKS: Thank you.

LEHRER: Robin?

MacNEIL: Still to come on the NewsHour tonight, a focus on labor unions. We have a documentary report on the efforts of steelworkers to save a Pennsylvania plant by buying it, and we discuss a new report on declining union power. Finally, Judy Woodruff has a newsmaker interview with Argentine President Raul Alfonsin.

This is pledge week on PBS, and we're taking a short break now so that your public television station can ask for your support. Your pledges help keep programs like the MacNeil-Lehrer NewsHour on the air. We'll be back shortly.

[Pledge Week Intermission]

Steelworkers: Saving the Plant

MacNEIL: -- American labor today. The Conference Board, a leading business research group, issued a major new study of wage trends. It predicted that recent minimal wage increases for U.S. workers will continue, despite economic recovery, and it said that companies will continue not only holding down wages but to continue to press for concessions in workers' benefits. We're going to pursue that report in a few moments. First we look at one example of the efforts of thousands of workers in one basic industry to save their jobs and the plants they work in. In Pennsylvania's Monongahela Valley, U.S. Steel has cut has cut its workforce from 25,000 to 5,000 in four years. All of U.S. Steel mills in the valley are fully or partially shut down. Now a group of labor activists from the area are pushing a bold plan to reopen the plants. Kwame Holman reports on what they hope to do.

KWAME HOLMAN [voice-over]: The George Washington Bridge in New York City, a monument to the American steel industry. Workers in the steel mill towns outside Pittsburgh still brag that it ws their steel that built that bridge. There hasn't been much else to brag about in recent years.

Vietnam veteran Guy Bruce lost his job in 1984 after 17 years in the mill.

GUY BRUCE, laid off steelworker: We lost the Vietnam War and we also now we're losing our jobs as steelworkers. It's just -- it's just lose one thing after the other. Next it'll be your home, your cars. Who knows? Maybe your life.

HOLMAN [voice-over]: Some steelworkers decided it was time to stop those losses. They wanted to buy the mills from U.S. Steel, reopen them and hire the workers back. Union officer Mike Stout.

MIKE STOUT, local union officer: Basically what we're trying to accomplish is to save the steel industry, the basic steel industry in this area and everything that's associated with that, such as the culture, the people who work in the steel mills.

HOLMAN [voice-over]: It is nothing new for workers to try to take over their plants, but there's a problem in these mill towns. They have to convince the corporation to sell, and U.S. Steel is not convinced the mills should be reopened.

U.S. Steel OFFICIAL [January 29, 1985 press conference]: I would have to say that I see nothing up to this point that would lead me to that conclusion.

HOLMAN [voice-over]: And chairman David Broderick, who refused our requestfor an interview, has also said that he would not want to sell to possible competitors. That worries Guy Bruce.

Mr. BRUCE: We're starting to put -- light the fire under it, but I don't know what we're going to have to do if Mr. Broderick don't want to sell the mill. What are we going to have to do to get the mill offer?

HOLMAN [voice-over]: What makes these steelworkers' efforts unique and controversial is their plan for getting around U.S. Steel. They want to create a local government body that could force the company to sell it's mills, using the power of eminent domain. That government body would be called the Steel Valley Authority, or SVA, and would get its power from Pennsylvania's Municipal Authorities Act.

Mr. STOUT: That's exactly what the Municipal Authorities Act and the Steel Valley Authority are designed to do -- to deal with a corporation that refuses to cooperate by exercising eminent domain rights, paying U.S. Steel their fair market value and waving goodbye to them.

HOLMAN [voice-over]: If the steelworkers succeed, U.S. Steel would be forced to sell their closed plants to the SVA, which would then resell the mills either to the workers or to another company willing to reopen the plants. Jay Weinberg was laid off by U.S. Steel in 1981.

JAY WEINBERG, laid off steelworker: I think this is a perfect program to take the economic future of this valley back into the hands of the people of this valley and determine their own economic destiny.

HOLMAN [voice-over]: But the activists' goal is not easily accomplished. As a first step they're trying to rally massive public support for the Steel Valley Authority.

Mr. STOUT: We know to get something accomplished this monumental you have to have grassroots participation and grassroots support. To get grassroots support, you need grassroots organizers to educate people and to organize them.

Mr. WEINBERG, phoning for support: Jim, this is Jay Weinberg from Tri-State.

HOLMAN [voice-over]: So Jay Weinberg and Mike Stout started organizing. Since October they and other activists have worked night and day to make their dream a reality, to convince every steel mill town to vote in favor of the SVA. They have been talking privately to town council members and mayors.

Mr. STOUT [in meeting]: -- still convinced that the basic structure is still there and it's worth saving.

VOLUNTEER [on phone]: Are you going to tell your friends and neighbors?

HOLMAN [voice-over]: Leafleting local neighborhoods, getting their message out to the community.

SPEAKER: Special town meeting called tonight for the creation of a Steel Valley Authority.

HOLMAN [voice-over]: Finally their work is paying off. They're getting positive notices from the press and accolades from the people in the community. In town meeting after town meeting the people are saying they want their town to join a Steel Valley Authority to take the mills away from U.S. Steel through the power of eminent domain.

SPEAKER: All those in favor of forming the Steel Valley Authority, say aye. ["Aye."] Those opposed? [none] Okay, the "ayes" have it. Thank you.

HOLMAN [voice-over]: These successes have given hope to workers like Guy Bruce.

Mr. BRUCE: I felt revitalized. The people that were there, they were united, just like you would with a local, you know, in a union-type thing. People stood up for what they felt was right.

Mr. WEINBERG: At times you start feeling that maybe you're the only one that thinks that something can be accomplished, and a lot of times you're not even sure it can be accomplished. But all of a sudden you start seeing it happen, and it's exciting.

HOLMAN [voice-over]: In addition to the community support, the activists were encouraged by a feasibility study that said that the mill in Duquesne, Pennsylvania, could be reopened and run at a profit. But the workers have a time problem. U.S. Steel has plans to tear down the mill in Duquesne, and it will take another two to three months to get the Steel Valley Authority incorporated. Then will start the lengthy process of invoking eminent domain, and U.S. Steel could delay that by taking SVA to court. Although the steelworkers are worried about stopping the proposed demolition, they already have begun treating the mills as their own property. The workers volunteered their time and $20,000 to winterize the mills, and they started round-the-clock vigils to make sure U.S. Steel didn't remove any equipment the workers would need to restart the plant. Lately, the company has sent trucks in and out of the plant, and when a rumor spread that an important part was about to be removed, the steelworkers came out in force and watched every truck with suspicion.

WORKER: There goes another one in. They're running probably three to four minutes apart. There's dirt substance in them. The ones that comes out has a dirt substance in them, but we're not really sure what's underneath the dirt.

2nd WORKER: You'll know it soon as you see it.

HOLMAN [voice-over]: A former plant manager who is helping the workers told them what to look for.

FORMER MANAGER: -- particularly different, okay? But there's no problem. You don't have any problem.

WORKER: And I hope people search their souls and their conscience and they know the importance of critical parts being brought out of the plant and they know how to react to it. I'm hoping that nobody becomes violent. We don't need any --

HOLMAN [voice-over]: That day no critical piece of equipment left the plant. The workers felt they had made a contribution to saving their plant.

Mr. WEINBERG: I think we're doing something really positive. I guess anybody, if they can see a future, it just makes your whole life a lot better than if there is no light -- you see no light at the end of the tunnel.

HOLMAN [voice-over]: All this watching and waiting has started a debate in the business community. Economics professor Otto Davis, who has studied the mills, thinks the workers are being misled.

OTTO DAVIS, Carnegie-Mellon University: The truth of the matter is, is that the mills are closing because they're not profitable. A change in ownership doesn't really change the basic equation.

HOLMAN [voice-over]: However, noted Wall Street analyst John Tumazos thinks the workers are on the right track.

JOHN TUMAZOS, steel industry analyst, Oppenheimer & Co.: A change in ownership may make a company eminently profitable. Braniff Airlines and Continental Airlines have tried to re-emerge from reorganization. Penn Central is a classic example of a company that emerged from organization very effectively.

Prof. DAVIS: We will not in any way have the kind of employment in steel that we had. That part of our industrial history is simply passing and we have to recognize that and the workers have to recognize that.

Mr. TUMAZOS: I applaud the efforts of the workers to buy the plants, take pay reductions, do whatever is necessary to keep their communities going. I think that's a lot better than going on bread lines.

HOLMAN [voice-over]: When the idea of taking over the mills was first mentionedin Pittsburgh in 1979, it was dismissed as a pie-in-the-sky dream. Now it is a matter of serious debate. Times have changed for the steelworkers.

Mr. STOUT: It's like everybody tried everything else. They tried concessions. That didn't save jobs. They tried restricting foreign imports. That didn't save jobs. They tried mergers. That didn't save jobs. They tried any -- tax breaks for corporations, and U.S. Steel took the tax money and ran off and bought Marathon Oil. We're saying that everything else has failed, that's why people are turning to us, because there are no other answers.

MacNEIL: U.S. Steel is studying the buyout plan but has yet to make a final decision about the Duquesne plant. Now the larger union picture. As we reported, the Conference Board today issued a major study of wages paid to American workers. It concluded that recent minimal wage increases will continue, that unions have lost their clout over wage rates, that companies are continuing cutbacks in key worker benefits like health insurance, and that the influence of non-union employees in the work place is growing. Audrey Freedman, chief labor economist for the Conference Board, is the principal author of the report.

Ms. Freedman, why are average wage increases staying so low despite the economic recovery?

AUDREY FREEDMAN: It is because employers have changed their minds and the way they behave in wage-setting. In the '70s especially employers were in effect all copying each other, and wages were imitative. Every employer was setting his wages by looking at everybody else. Now, in the mid-'80s, employers have changed and they're looking internally for their wage guidance. They're looking at their profitability. They're looking at their labor costs, and they're setting wages by looking at what they can do and not what everybody else is doing.

MacNEIL: And why [TEXT OMITTED FROM SOURCE] of the industry because the company might close the plant, might hire a non-union workforce, might open up its employment rolls to an entirely new workforce. So the union has much less choice and much less of a sanction, and the better part of wisdom is sometimes to work with the company to try to make the company profitable and perhaps to bring costs down so that the company can enlarge its market share. In other words, help the company instead of fight the company.

MacNEIL: Representatives of organized labor we talked to today who had read reports of your study said their loss of clout, they felt, was due to the recession, which is now two years over, and Reagan policies. You don't think that?

Ms. FREEDMAN: No, I think the recession plus competition made a change in employers' policies. But the recession is, as you say, more than two years over, and unemployment has been falling for these two years. And yet wage increases are continually more moderate, even though the employment market is tightening. So it isn't the recession that's working now.

MacNEIL: Well, what about Reagan policies? This administration has been a good deal less assiduous, labor believes, in enforcing labor law or labor regulation than previous -- than, certainly, Democratic administrations were.

Ms. FREEDMAN: That's true, but most of those regulations relate to organizing new workers. The labor movement has not been, for 15 years, very good at organizing, and they are less good at it now than they were even in the '70s.

MacNEIL: So it's not the recession and it's not Reagan policies; it's competition.

Ms. FREEDMAN: It's competition.

MacNEIL: Where is that competition coming from, from non-union workers?

Ms. FREEDMAN: Some of it's coming from foreign manufacturing. Some of it's coming from domestic, non-union manufacturing. And a great deal of it is coming from deregulation, which creates new businesses, new enterprises in industries that once were regulated and market-controlled; that is, trucking, airlines, communications. Those industries are all newly exposed to competition. What competition has done, really, is take away the employer's power to raise his prices. Since he can't raise prices, he can't any longer simply pass on higher wages in higher prices. And he's turning back and trying to get more efficient, to cut costs, to cut labor costs, to increase productivity so that he can maintain his place in the market. Competition is really a discipline to management and, through management, it's a discipline to unions.

MacNEIL: Does this mean that the standard of living of the American worker, the blue-collar wage-earner, is going down relative to the standard of living of other people in the economy, white-collar people and so on?

Ms. FREEDMAN: Well, in the economy broadly now the standard of living isn't increasing. It's about staying steady, real wages are staying steady. They're not increasing. Really, the only source of increase would be a productivity improvement, a steady, a long-term productivity improvement. But blue-collar workers, compared to white-collar workers, have always been paid very well, partly because of union pressure and partly because of the employer's market power. That relationship is changing, yes.

MacNEIL: Is the standard of living of the American worker being pulled down by competition from lower-paid foreign workers to the extent that imports from those countries are competing with American products?

Ms. FREEDMAN: Yes, the wage increases are being pulled down by the competition, that's right.

MacNEIL: And other wage benefits?

Ms. FREEDMAN: On the other hand, the foreign products are very inexpensive, and a great deal of our low inflation, our low consumer price inflation, is due to the imports.

MacNEIL: Which would benefit workers at the other end, when they're buying those things.

Ms. FREEDMAN: That's right. They're less expensive to buy, and they also are a discipline, again, to American producers who have to produce a better quality product at a lower price as long as they are exposed to the competition.

MacNEIL: How long do you see this trend continuing?

Ms. FREEDMAN: I think probably through the '80s. I don't think there is any stopping of the new competitive surge in our economy, and its benefits are spread very widely. Some of the harm that it's doing to individual workers in individual industries -- or, rather, some of the harms are rather narrowly applied. So that in the economy generally it's beneficial.

MacNEIL: Ms. Freedman, thank you. We have to leave it there. Raul Alfonsin Interview

LEHRER: Finally tonight, a newsmaker interview with the President of Argentina, Raul Alfonsin. He met today with President Reagan and Secretary of State Shultz. Tomorrow he speaks to a joint meeting of the Congress. Alfonsin comes to Washington representing both the problems and promise that face the Reagan administration in Latin America. The problem is economics -- Argentina's $45 billion foreign debt and 800 annual inflation. The promise is the trend back to democracy in Latin America. Fifteen months ago Alfonsin replaced military rulers who had waged a brutal campaign against their domestic opponents and an unsuccessful battle against Britain for the Falkland Islands. After his White House meeting today, Judy Woodruff talked with President Alfonsin. Question one dealt with the connection between economics and democracy.

Pres. ALFONSIN [through interpreter]: You must understand that democracy has to give answers to the needs of man that are linked to his liberty. Therefore, this economic crisis is threatening to this democracy. In order to defend freedom we must be able to enjoy it, and a hungry people cannot enjoy freedom.

JUDY WOODRUFF: Specifically, though, you said the United States should help in bringing about a political solution. What do you mean, "political solution"? Are you saying there is nothing the United States can do --

Pres. ALFONSIN [through interpreter]: This means a political solution is to understand that the foreign debt problem is not just an economic problem. It's not just a financial problem. Behind this problem is hidden a very grave political risk because it means we cannot grow, that there is stagnation, that stagnation does not give any solution to the needs of work of the youth, and this conspires against the security of everyone. I hope the United States has -- this idea will have been forgotten, that the best way of defending oneself from communism is fascism. This should have been completely forgotten.

WOODRUFF: Are you satisfied with the agreement that Argentina now has with the IMF, the International Monetary Fund, for debt repayment?

Pres. ALFONSIN [through intepreter]: We believe that we have to do some adjustments with that agreement with the Fund. In any case, we have avoided, and we are trying to avoid, to apply recessive recipes to our economy, and we believe that there have to be some indispensable adjustments to this program.

WOODRUFF: What exactly could the United States do to help bring that about? I mean, some new flexible arrangement? More time?

Pres. ALFONSIN [through interpreter]: I think we will need from the United States a bridge loan in regards to the Fund.

WOODRUFF: How much and how soon?

Pres. ALFONSIN [through interpreter]: Not too much. Not too much. We don't expect that the debt is going to be paid by the American taxpayer, but it would be very important if the interest that we pay could be invested in the debtor countries.

WOODRUFF: But, to be very plain, why should other countries invest in Argentina when your economic situation is such as it is right now, when you have this very high inflation rate -- 800%?

Pres. ALFONSIN [through interpreter]: I believe that Argentina is a good place for business. There are investments coming from Europe. There are investments coming from Japan. Argentina is a good place to invest.

WOODRUFF: What steps do you think Argentina can take in return for a more flexible arrangement with the IMF, assistance from the United States and so forth?

Pres. ALFONSIN [through intrepreter]: We believe the way of getting out of this is through investment which has fallen in my country -- our own investment and foreign investment -- and to increase exports.

WOODRUFF: You mention exports, you mention investment, but not by holding down wages, not by cutting government spending.

Pres. ALFONSIN [through interpreter]: We have reduced the federal deficit and we will continue to do so, and we will not be able to increase real wages, which has fallen very much.

WOODRUFF: Do you agree with the administration's policy in Nicaragua, the Reagan administration's policy, of assisting the contras who are fighting the Sandinista government?

Pres. ALFONSIN [through interpreter]: In regards to Nicaragua I believe that we must look for a formula that can achieve peace, a formula that will respect the principle of non-intervention and also the principle of hemispheric security and also the security of all of the nations of the hemisphere. What I believe, what most important for us and the United States is to find a political solution, not a military one.

WOODRUFF: But what is wrong with assisting the contras? What's wrong with that?

Pres. ALFONSIN [through interpreter]: I believe it is not an agreement with principles of inter-American right, law.

WOODRUFF: But what could it lead to?

Pres. ALFONSIN: But, but, but, but! Quantos "but"!

[through interpreter] They're all "buts" that you're saying.

WOODRUFF: That's right. I'm asking what is wrong with it, if it's the way the administration thinks they can influence the situation?

Pres. ALFONSIN [through interpreter]: And we can achieve something which will have us have no extra-continental interference, that would have a pluralistic democracy, and I think that any other way of doing it is wrong.

WOODRUFF: Did you tell President Reagan this?

Pres. ALFONSIN [through interpreter]: We have talked about these things with Mr. President, and I hope we will keep talking.

WOODRUFF: What was his reaction when you said this to him.

Pres. ALFONSIN [through interpreter]: He asked that we keep conversing about all these topics. You are very indiscreet.

MacNEIL: Once again, the main stories of the day. President Reagan won a big victory when the Senate approved new MX missiles. The governor of Ohio went to Washington for help in his state's banking crisis. Housing starts fell sharply in February, and the stock market had a big rally. Good night, Jim.

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