The MacNeil/Lehrer NewsHour

MR. MAC NEIL: Good evening. I'm Robert MacNeil in New York.

MR. LEHRER: And I'm Jim Lehrer in Washington. After our summary of the news this Tuesday, former Senator Warren Rudman and Congressman Henry Waxman have an entitlements debate. Mark Shields and Paul Gigot look at the politics of budget cutting, Kwame Holman reports on House passage of the line-item veto, and Bob Garner tells the story of wolves in North Carolina. NEWS SUMMARY

MR. MAC NEIL: President Clinton this evening summoned Major League Baseball owners and players to the White House. The move came after the two sides failed to reach agreement on ending a six- month strike despite the intervention of a federal mediator and a presidential deadline of 3 PM today. White House Press Secretary Mike McCurry said Mr. Clinton was exasperated by the lack of progress. He said the President was not inviting the two sides to the White House for a negotiating session. He said Mr. Clinton would let them know what he sees as the next step. The President could propose special congressional legislation to bring about a settlement or binding arbitration. Earlier in the day, Republican leaders had this to say.

SEN. ROBERT DOLE, Majority Leader: Neither party, player nor owner, should be looking to Congress for any magic solutions. The magic solutions can only be found at the bargaining table. If for some reason the players and owners can't reach an agreement today, then they should do the next best thing, which is to voluntarily accept whatever settlement special mediator Bill Espy may propose. If it's good enough for Bill Espy, I'm confident it's good enough for baseball.

REP. NEWT GINGRICH, Speaker of the House: As a Braves fan, you know, I'm desperate for them to get back in the field. And I suggested at one point that the players and the owners consider starting the season and putting the salaries and the profits in escrow and finding some way to, you know, not deprive everybody else of their jobs and not deprive all the fans of their sport, but I think that, you know, I'm not sure what the national interest is in having the Congress start to micromanage baseball as opposed to actually doing the job we're assigned.

MR. MAC NEIL: House Minority Leader Richard Gephardt also said right now there is not a role for Congress in the dispute. Jim.

MR. LEHRER: The House began debating new crime legislation today. A bill that requires convicted criminals to pay restitution to their victims passed unanimously. It was the first of several crime proposals from the Republican Contract With America. President Clinton today called on Congress to pass the illegal immigration provisions in his budget. He spoke at a White House ceremony.

PRESIDENT CLINTON: First, I have asked Congress for an additional $1 billion to fight illegal immigration in the coming fiscal year. Second, I have asked for more funds to protect American jobs by increasing the number of work place investigators by 85 percent. Thirdly, I have asked for new funds to double the deportation of criminal aliens next year and to triple them by 1996. And finally, ours is the first administration to reimburse states for a share of the cost that they bear related to illegal immigration, including the incarceration of illegal aliens. I've asked Congress for a total of $550 million for state reimbursement. That more than doubles the fund that now exists.

MR. LEHRER: The President's proposals also include a fee on people and vehicles entering this country by land from Mexico or Canada. That money would go to improve border crossings and increase surveillance.

MR. MAC NEIL: In economic news today, the Labor Department reported productivity in the American work place rose 2.2 percent last year, the fifth straight annual advance. The crew of the space shuttle Discovery completed their second major task today. Cosmonaut Vladimir Titoff released a science satellite into the Earth's orbit. It will gather data about gas and dust between stars. Discovery is scheduled to return to Earth on Saturday.

MR. LEHRER: And that's it for the News Summary tonight. Now it's on to an entitlements argument, Shields & Gigot on the politics of the budget, the passing of a line item veto in the House, and wolves in North Carolina. FOCUS - SACRED COWS?

MR. MAC NEIL: First tonight, we look at balancing the budget the entitlement way. The opening round of the budget battle began this week. So far, there are no concrete plans for cuts in Medicare, Medicaid, or other entitlements, but many inside and outside Washington think that could change. Margaret Warner has the story.

MS. WARNER: When President Clinton unveiled his new budget yesterday, it was notable for what was not included. Nowhere in the President's $1.6 trillion budget for next year were there any significant cuts in entitlements, those benefit programs that grow automatically each year, programs like Social Security, Medicare and Medicaid, food stamps, federal retirement, and veterans benefits. The President defended his no-cut position.

PRESIDENT CLINTON: [yesterday] Americans deserve to know. It is their futures, their families that are at stake. They deserve to know what will happen to the programs they care about like Social Security and Medicare. My budget cuts spending, cuts taxes, cuts the deficit, and does not cut education or Social Security or Medicare. That is a good budget. It continues to reduce the deficit without undermining the things that I believe the federal government should be doing.

MS. WARNER: But a growing chorus of Republicans say there is no way the budget can ever be balanced without slowing the growth of entitlements.

SEN. PETE DOMENICI, [R] New Mexico: [yesterday] I'm firmly convinced that the really important business of reducing the deficit this President has surrendered on, and let me tell you precisely how. He's put up a white flag of surrender on the entitlement program.

REP. JOHN KASICH, Chairman, House Budget Committee: The problem that we have with this budget is that it essentially ignores the fastest growing item in the federal budget, and that is entitlements.

MS. WARNER: And at today's House Budget Committee hearing, even some Democrats faulted the President for not dealing with the entitlement issue.

REP. GLEN BROWDER, [D] Alabama: I think the President's budget is really a 1996 presidential reelection campaign budget. I think it de-emphasizes deficit reduction and in deference to entitlements.

MS. WARNER: Taken together, entitlements make up more than half of all federal spending. The President and the Republican leadership have agreed that Social Security won't be touched for now, but that still leaves about $500 billion in other entitlements, including the rapidly-growing health benefit programs. Medicare, which pays bill for the elderly, and Medicaid, which pays medical bills for the poor, make up 16 percent of next year's projected budget. And they're growing at about 10 percent annually, far faster than inflation. If budgeteers could restrain the growth of Medicare and Medicaid, the payoff in terms of reducing the deficit would be tremendous.

REP. WILLIAM HORTON, [D] Utah: If we could keep the growth in Medicaid and Medicare spending to the growth in the population plus inflation, we could get very near to if not actually balance the budget by the year 2002.

ALICE RIVLIN, Budget Director: If we could keep health spending from growing faster than the economy as a whole was growing, keep it from growing faster than the nominal GDP, we'd have balance before 2003.

MS. WARNER: But can the growth of these programs be slowed without reducing the quality of care? House Speaker Newt Gingrich thinks so. Last week, for example, he called for radically rethinking and restructuring Medicare.

REP. NEWT GINGRICH, Speaker of the House: If we're going to rethink Medicare to improve the quality of health care for our senior citizens, to give them a greater range of choices, to increase their access to the system, but to do it in a way which is responsible and honest and end it, then it's not just a question of saying, what's wrong with the current structure, it's a question of thinking through at the vision and strategies level what would be right about the replacement, how would it work, what would it do?

MS. WARNER: But when a House Ways & Means Subcommittee turned its attention to Medicare yesterday, the partisan differences were quickly apparent.

REP. PETE STARK, [D] California: The Democratic members of this committee will oppose all changes to Medicare that do not strengthen the program directly or remedy defects in the broader health care system. It's apparent that the newfound interest in making contracts with the American people has arisen, are focused on Medicare, but for 30 years we've been working to uphold a true Contract With America. That's Medicare. We have not and will not agree to breaking the Medicare contract with health care security to our nation's disabled and elderly in order to finance today's Republican tax cuts for the wealthiest.

REP. BILL THOMAS, [R] California: [yesterday] All of us are concerned about those folks at the lower end of the income, the 100 or the 150 percent of poverty level, or the 200 percent of poverty level, but I think by the time you reach a thousand percent of the poverty level or a million percent of the poverty level, that we ought to begin talking about perhaps this isn't the best allocation of the taxpayer's dollar for people who can clearly taken care of themselves. Otherwise, we're looking at a bankrupt program, and more and more dollars from the general fund going to millionaires in retirement. And I think you'll agree that's wrong.

MS. WARNER: We hear two views now on whether Congress should cut the President's projected spending on entitlements? Congressman Henry Waxman is a Democrat from California and the ranking minority member on the Commerce Committee's Subcommittee on Health. Warren Rudman is a former Republican Senator from New Hampshire. He's a founder and co-director of the Concord Coalition, a nonprofit group dedicated to reducing the federal budget deficit. Welcome, gentlemen. Congressman Waxman, as a Democrat, do you support the President's approach on entitlements, or do you think Congress should go beyond the President and look for cuts in these programs?

REP. HENRY WAXMAN, [D] California: You know, I think it's easy to talk about entitlements as if they're something horrible, just like it's easy to talk about the balanced budget amendment as a panacea to all of our problems. I think we've got to be honest with the American people as to what's at stake, and we're talking about when we're mentioning entitlements Social Security and Medicare. I don't think Social Security and Medicare ought to be slashed in order to pay for the tax breaks that the Republicans envision which, according to the Wall Street Journal, may amount to a trillion dollars over the next decade or increased spending. Social Security is the program upon which the elderly in this country rely for their retirement. In fact, a quarter of them look to Social Security as 90 percent of the income that they're going to have during their retirement years.

MS. WARNER: But, Congressman, haven't both sides agreed Social Security is not an issue here, but what about Medicare and Medicaid? Are you saying that it should, for now at least, continue to grow as it has been?

REP. WAXMAN: Well, Social Security really is an issue, because when people talk about cutting back on entitlements, the biggest entitlements are Social Security and Medicare. And while the Republican leaders are talking about not going after Social Security now, they're -- I'd underscore the word "now" because they clearly are talking about going after Social Security later on if the balanced budget amendment becomes law, and Medicare is a very large amount, but it reflects the runaway costs in health care. And if we just simply slash the Medicare program, we're going to be shifting those costs on to people who are privately insured and ruining a mainstream health care system upon which the elderly rely.

MS. WARNER: Is that what's at stake, Senator?

WARREN RUDMAN, Concord Coalition: Well, I wouldn't put it quite that way. First, let's clear the decks of a couple of things, Henry. I would say that tax cuts probably aren't a good idea right now at all. You've got to apply it to the deficit, but in all frankness, both my party and your President have proposed them. I am totally opposed to that. We don't need that now in a time of prosperity. What we do need is some rationality about this whole Medicare debate. Now, I would agree with Henry and many others that we ought not to slash Medicare. It's too important to elderly people in this country, particularly those that are poor, those that are lower middle income. But it makes no sense at all -- when I came in here this evening to do this program there was a young man cleaning your front office probably not getting paid a great deal more than the minimum wage and paying 7 3/4 percent or more of his pay check in so-called FICA. At the same time, I'm sure living close by us are retired people with incomes fifty, sixty, seventy, eighty thousand dollars a year and more who are essentially having their Medicare paid in the main by that young working person and others like him. That is essentially unfair. The Concord Coalition does not for a moment suggest we ought to cut Medicare. We ought not to cut Medicare. We ought to have adequate health care for elderly Americans. We promised them that; they should have it. What we ought to do, though, is start means testing, or as my friend, Pete Peterson, talks about, affluence testing not only Medicare but Social Security at the upper levels of income. Curiously, the numbers that we have show unequivocally that that by itself will go a long way in bringing down these deficits while Henry and others in the Congress find new ways to deliver health care at lower cost. And I'm not a great chart believer, but I brought one along which I, which I will hold up here, because it's a very interesting chart. It shows Medicare deficits starting, I think, Henry, next year at $11 billion, according to the Congressional Budget Office figures. These are audited figures from the agencies, themselves. And if you look at this number, the most startling thing about this chart is this line over here. What that line says is that in the year 2020, or 2018, the deficit from Medicare alone is $500 billion. You know, Willie Sutton was once asked why he robbed banks, and he said, well, because that's where the money is. And I'm not suggesting, nor does the Concord Coalition, we ought to slash Medicare or Social Security. We ought to start telling elderly people in America that they're going to have to pay a larger share of that premium, have a higher deductible, while protecting those people who can't do that, and tell young people in this country that no longer must they support this burden which will go to 12 or 15 percent FICA shortly after the turn of the century. That's unacceptable.

MS. WARNER: Let me ask you both to explain something. Medicare and Medicaid are both growing about 10 percent a year, not only more than the rate of inflation but more even than health care costs are in the private sector. What is the private sector doing, Mr. Waxman, to restrain the growth of health care costs that the Medicare and Medicaid programs aren't doing and that might apply?

REP. WAXMAN: Well, I don't think that it's quite accurate to look at it that way. The Medicare program covers people who are older, obviously. There's a lot of new technology that's coming on board, and the expenses for taking care of that population are more expensive than taking care of a population that's working and younger and healthier. But I --

MS. WARNER: But it should also grow faster, though?

REP. WAXMAN: Well, it's growing faster because they have to keep up with the inflation in the medical economic index, which is far and away higher than the inflation rate in our economy, and the population is aging, so we have an increased population. From Medicaid, we have a greater need for people to be covered. We have an increase in poverty among kids, and that accounts for a lot of what's going on in Medicaid. Another thing that's going on in Medicaid is that the states were taking advantage of some loopholes and really came in quite aggressively to see if they can get more federal dollars to the program, but the needs are there. The elderly and the poor in this country must be taken care of for their health care needs. Warren Rudman I think is making a good point. He's being honest about these issues, but look what's happening right now on Capitol Hill. They're talking about a balanced budget amendment, a big tax break, over a trillion dollars over the next decade, increased defense spending, and maybe a Star Wars 2. We spent $36 billion on Star Wars and got nothing for it. And then everything is going to be easier. We're all going to balance the budget, and even the elderly, who are well off, who are being required to pay more in their taxes on their Social Security benefits, they want to cut those taxes. So I think there's -- let's address these problems; they're serious, look at the underlying problems like health care cost increases, aging population, more poor people, try to address those problems as well, not just simply say entitlements are the reason we have a problem today.

SEN. RUDMAN: Margaret, you know, the trouble is that the rhetoric here gets very interesting. People talk about slashing Medicare, slashing Social Security, and people get very nervous about that. I have a 92-year-old mother, who will be 93 pretty soon. She gets nervous when she reads and hears about these things because she's not particularly wealthy. The point I make to her and to the other elderly that I talk to around this country is simply this: We are not talking about you who are having a hard time making it. We are simply saying that the time has come in America to take a system that recognizes that once you pass 65 you're automatically entitled to all of these benefits and relate them in some way to what your own ability is. That's No. 1. No. 2, I don't know, Henry, whether you agree on or not, but I think there are some models out there that the federal government could start to impose on Medicare and Medicaid that deliver these services more efficiently. I mean, you're an expert in this area; I'm not. You've devoted a life in Congress to these issues; I haven't. But just from what I've seen it doesn't seem to me that these programs are efficiently administrated out in the states, so I'd like to know what you think about that.

REP. WAXMAN: The states -- are you talking about Medicaid or Medicare?

SEN. RUDMAN: Medicaid and Medicare both, the way they're administered.

REP. WAXMAN: Well, I think we ought to give people more options to go into HMO's and other kinds of alternatives that keep people healthier and try to avoid the cost, but in trying to hold down the cost, simply asking people who are better off to pay a higher premium doesn't really stop the increased cost in health care, which is going on all around us.

SEN. RUDMAN: You have to do both.

REP. WAXMAN: Well, absolutely.

SEN. RUDMAN: And I agree.

REP. WAXMAN: And that's what we tried to do last year in a bill a little bit more complicated than it should have been, and it was flawed in many respects, but we lost our opportunity last year to hold down health care costs. Now, if health care costs are going to keep out of control, to tell elderly people, well, you're just going to have to pay more of it out of your pocket is going to be very hard for a lot of these people. And I don't think you'll want the people who are modestly off to have to pay those increases.

SEN. RUDMAN: No, definitely not.

REP. WAXMAN: But that just means that we're still going to have to pay for it through tax subsidies, and --

SEN. RUDMAN: But the numbers are chilling, Henry. Talking about four and five hundred billion dollar deficits fifty years out, we've got to address it.

REP. WAXMAN: It's chilling when you look at what's happening to working people. People are losing their --

SEN. RUDMAN: No question.

REP. WAXMAN: -- insurance right now in dramatic numbers. We're at 40 million people in this country because they can't afford insurance.

MS. WARNER: Let me ask you this. Alice Rivlin, head of the President's budget office, said today on the Hill that as far as the President's concerned, he doesn't want to see cuts in Medicare and Medicaid -- though he proposed some last year -- until he gets health care reform. Is that going to be the Democratic position, that you're not going to address that unless you get what, comprehensive health care reform?

REP. WAXMAN: Well, what President Clinton proposed last year was to, to ask the people who are better off economically to pay a higher amount for their Medicare premium, but then to use that money --

MS. WARNER: What Sen. Rudman -- yes --

REP. WAXMAN: Yes, but he wanted to use that money to improve the health care system, to cover more people, to cover more services for the elderly. Now, if we simply take that money and reduce the deficit, that, that will not reducethe deficit if health care costs are not increasing and we don't stop the spiraling health care costs which are affecting everybody.

SEN. RUDMAN: Henry, I'm sorry, I disagree with that. The Concord Coalition has numbers which I'm going to give Henry after this program which show unequivocally that if you means test these programs, even if you assume they can continue to grow at their present rate, you change the dynamics enormously and save billions and billions of dollars.

MS. WARNER: Why?

SEN. RUDMAN: Because you start to take enormous costs out of the program that are now being passed on both in the Social Security and the Medicare area. And it works. The numbers have been crunched. Everybody says they work. What -- you see, here's the problem. Every time we get in this discussion the debate becomes let's not slash Medicare. We're not talking about slashing Medicare. We say it's time to approach it on the basis of who is able to take care of themselves better than others.

MS. WARNER: Let me ask you both about an idea that some Republicans are talking about which is: Why not give the elderly vouchers and let them go out and buy with what is spent on them now, make the choices, themselves -- I think Speaker Gingrich has talked about this -- and that then they would become more kind of eagle-eyed about should I -- do I really need this extra test and so on -- what do you think of that idea? You're expert in this --

REP. WAXMAN: Well, a voucher would presumably allow them to buy a private insurance policy but it may not be enough to buy the kind of policy that they'll want to cover them. You need some cost concerns to be placed with the patient.

MS. WARNER: Which doesn't exist now, correct?

REP. WAXMAN: Well, it does, because people have to pay for the deductibles on their Medicare, and they have to pay for the first day hospitalization, they have to pay for their co-payments on drugs. In fact, for people who don't have additional drug coverage, they have to pay for all of their drug costs. So there are the cost incentives, except -- and we also give people a break if they go into an HMO when they're on Medicare. I'd be interested in seeing your numbers because I don't think it works. I don't think it works simply to say that elderly people are going to pay more for their health care, that that's going to decrease the cost for health care. I think it's just going to mean more elderly people are going to have to pay more money out of their pockets.

SEN. RUDMAN: Henry, I'm sorry to tell you, but the figures, frankly, work, and I'll make sure and your committee get them. I thought you already had them.

REP. WAXMAN: I want to see them.

MS. WARNER: What would happen if, as Ms. Rivlin said today, let's say -- she was not suggesting this -- but if there were a complete, just a cap on the growth and you just held it to GDP and the number of new people in the system to the year 2002 - - what if that was just imposed, what would happen?

SEN. RUDMAN: Well, of course, the problem with caps -- and I've been sometimes for them and sometimes bent against them -- but the problem with caps in something like Medicare and Medicaid right now is that what you are essentially saying is that even if the costs and the population grow beyond a particular point, unless you have some sort of a waiver at the top, then you really start to cut the value and the quality of the care that people receive, because you're essentially cutting down the amount of money for basic procedures. I would far rather test it at the upper end than cap it and hurt people at the lower end.

REP. WAXMAN: I think you're absolutely right. I agree with you, because there's no way to cap it unless you're just going to deny people access to care, shift costs onto private insurance. It just wouldn't work. We really need to address health care problems overall and not just take the two public programs, and one is Medicaid, which has been talking about the poorest -- the poor are the people who get it -- mainly kids -- elderly, disabled people get Medicaid -- Medicare, these problems because of cost increases in health care, and that's where we should address the whole issue.

MS. WARNER: Before we go, a final political prognosis. You've been fighting this battle a long time, Senator. Do you think the climate on the Hill has changed to the point that we are going to see a real serious attempt to curb the growth of these entitlements this year?

SEN. RUDMAN: I think we will because we have to, but let me say that I'm disappointed there is not more presidential leadership. And let me hasten to add, I've been sorry for the last 14 years there hasn't been more presidential leadership on this particular issue. I don't think Republicans in Congress can do major things on this issue without the President standing shoulder to shoulder with them. This has to be the two parties doing it together, but I think the Republicans -- particularly people like Domenici and Kasich -- are going to try.

MS. WARNER: And will the Democrats be with them, Congressman, when it comes down to it?

REP. WAXMAN: Well, I think what they're going to try to do is to keep their promise, which is to give huge tax cuts -- we're going to go back to where we were in the '80s, where we ended up with this huge deficit, tax, tax cuts for people who are well off, more spending on the military, a supply side economic theory that didn't work. We're about to go on that road a second time, and we ought not to take the entitlement money, which is really what you're asking because if you cut entitlements and then give tax breaks, we're take them from the elderly and the poor to give tax breaks and to spend money on Star Wars too, and that doesn't make sense.

MS. WARNER: Well, gentlemen, I'm afraid that's all the time we have. Thanks very much. FOCUS - POLITICAL WRAP

MR. LEHRER: Now the politics of entitlements in the federal budget. We get it from our analysis team, syndicated columnist Mark Shields, Wall Street Journal columnist Paul Gigot. Who gets the best of this entitlements argument politically, Mark?

MARK SHIELDS, Syndicated Columnist: Who gets the best of it? Rhetorically the people who want a cut, because implicit in the Republican message, particularly in Speaker Gingrich's message when he was organizing the Republican takeover of the House, was that there was sort of this conspiracy going on of spenders, and once we took over, it would be fairly easy and painless to end that spending, because 40 years, they had built up all these little deals and networks, and we'll just -- everybody knows it's going to be painless. It is going to be wrenching to ever reach a balanced budget, to cut and tame and trim entitlements and Bill Clinton understanding what he had gone through between 1993 and 1995 just passed the baton to the --

MR. LEHRER: Said, if you want to do it, Republicans --

MR. SHIELDS: Hey, fellahs, I just took my victory lap, it's your turn, and this is your life, here's your baton.

MR. LEHRER: Do you see it the same way?

PAUL GIGOT, Wall Street Journal: Well, if the elections in November meant anything at all, the Republican cutters have the best of the argument certainly for the time being. There was a loud and clear message sent that the status quo wasn't something that American people supported, and so is your chance to do it. And I think that the baton has been passed and particularly with this budget it's been kind of dumped.

MR. LEHRER: But hasn't it passed significantly on entitlements? Do you think that's -- the American people understood that that was part of the deal in the Contract for America -- With America?

MR. GIGOT: I don't think that most Americans when they voted said you know, I'm thinking about that 10 percent growth in the Medicare program.

MR. LEHRER: Yes.

MR. GIGOT: But there is a general sense that political responsibility has shifted to the Republicans who have to put something together that can pass and that shared sacrifice, that sense of shared sacrifice that cross an awful lot of programs, if Republicans just cut Medicare, they're going to fail miserably, but if they cut some of their own constituencies, farm subsidies, the Small Business Administration, and, as well, take on some of these other things, then you could get something through.

MR. LEHRER: Well, when Warren Rudman says, Mark, as he just did, well, it's going to take some presidential leadership to get all of this done, forget it for now, is that right?

MR. SHIELDS: Well, I mean, Jim, two points. First of all, we've had leadership on this issue before. When Warren Rudman was in the Senate of the United States, a fellow named Bob Dole, the Republican leader, the Republicans had a majority in the Senate, they -- the Republicans -- the only time in my adult lifetime I've ever seen the party stand up and take on a tough one. They put a one year freeze on cost of living increases in Social Security. 1985 -- the Republicans passed it. They brought Pete Wilson, then a Senator from California, in on a hospital gurney from Bethesda Hospital, jammies, his bathrobe, to cast the breaking vote. The next year, the Republicans lost the majority in the Senate -- 1986 -- for that heroic act. Now, the heroic act was quickly killed by a number of good folks, including Paul's editorial page, Jack Kemp, Donald Regan. It was attacked. And Ronald Reagan -- Ronald Reagan - - all pulled out the rug from under them and accused them of being -- they called them "root canal, cold shower Republicans." Okay? Now, ten years, eight years later, Bill Clinton does the same thing, $500 billion in reductions, I mean, takes it on, puts the tax increase on the richest 1 percent of America, does it all, lays it out there, passes it with his own party vote, and you can see - -

MR. LEHRER: What the results of the election --

MR. SHIELDS: This is an issue where in the abstract you'll say, yeah, gee, that's a hell of an idea, let's cut the deficit. Come election day it has no saliency and very little payoff.

MR. LEHRER: Why is that, that that has no political saliency and very little payoff politically?

MR. GIGOT: Well, first of all, I'm not so sure that that's the case. We've had -- it's eight years or nine years, ten years since that particular episode. No. 2, that little episode was one of the great kamikaze runs in political history because it went right at Social Security for current recipients. That's really hard to do, because that's a contract with a lot of people who put money into the system for thirty or forty years. That's not what Republicans are talking about now. They're not even -- they're talking about transforming and changing Medicare for future beneficiaries for the most part. That's a little different, smarter politics, and solves the problem where it is in the out years. So I'm not sure it is impossible, particularly given the message sent in November.

MR. LEHRER: So you would disagree with Mark, that there is good politics in cutting the deficit, which --

MR. GIGOT: I think for Republicans that it is absolutely essential.

MR. LEHRER: But on the deficit, is that different than balancing the budget, or how is it --

MR. GIGOT: I don't think that the deficit per se is something that is -- it's an abstraction, as Mark often says -- but if you're talking about cutting spending and disciplining the government and getting it under control, I think there is good politics.

MR. SHIELDS: Jim, people voted for a smaller government. There's no question about it. I hear -- maybe you heard a different campaign than I did. I didn't hear anybody in 1994 saying, hey, you know, we ought to do something with Social Security, and we ought to maybe limit future, and we ought to do Medicare, you know, maybe we ought to do that. That wasn't it. It was this sense of hey, if we just get these people off welfare and we correct this food stamps, and we get rid of the National Endowment for the Arts, the budget will be balanced. And that is baloney! And it's going to take some real pain.

MR. LEHRER: And the President and his budget said, okay, guys, it's all yours, is that right? You administer the pain. Are they going to do it? Will the Republicans do it?

MR. GIGOT: This budget is to, is to political courage what Newt Gingrich is to humility. I mean, it's just passing the buck completely. Republicans have no choice. I think they have to step up to the plate, and if they don't do it, they ought to go back to being haberdashers or whatever they were doing because that's what they were elected to do.

MR. SHIELDS: I think Bill Clinton -- if you look at it as an economic document -- the budget -- which it is -- it is fundamentally a political document, and this political document said, okay, fellahs, the election results last November, not a single Republican incumbent lost for the House, the Senate, governorship, it was a sweeping victory for you by a margin of two to one. The American people said, we want Republican policies in the Congress to take precedence over the Democratic policies of the President. I mean, that was, that was the clear, unequivocal message from the campaign in 1994. Bill Clinton just said, your turn. And this is it. I mean, this is so much different, Jim, than voting for a balanced budget amendment, which, you know, is great. I mean, geez, I'm for physical fitness. You know, are you going to run every day? Are you going to do 500 sit-ups?

MR. LEHRER: So how are they going to do it? Politically, how are they going to get this done?

MR. GIGOT: Well, I think they're going to do it, first of all, they're going to do things across the board. I mean, I think that you have to demonstrate -- you can't gore with just one person's constituency. You have to show shared sacrifice. I think the other thing -- the other thing they're going to do is this time, unlike the '80s, they're going to zero out an awful lot of discretionary programs. They're going to say that in a time of austerity we don't need a National Endowment for the Arts, for example, and a lot of these things they're going to get some savings there. And I think they're going to do it over the course of --

MR. LEHRER: But that's peanuts.

MR. GIGOT: Well, pretty soon you're getting a couple of hundred billion dollars here when you talk over five years. And then they're going to do some things over the future, and as Warren Rudman said, you get a lot of wedge spending. You get savings in the short term, expand more broadly out.

MR. LEHRER: But when it comes down to it, the next stage of the politics on this, let's say that the Republicans do that, and they pull it off somehow, or at least they move from here to there to pull it off, and the Democrats do not cooperate in any way. The President doesn't cooperate. The Henry Waxmans don't cooperate, and the Republicans do it on their own, and they do cut Medicare, they do do some of these painful things. Then what are the politics of it? Do the Democrats have a political answer to all of this?

MR. SHIELDS: The Democrats having been in power for 40 years do not have a clear definition as a party. There's not a clear profile, people, in people's minds as to what the Democrats stand for. Democrats have long played the Social Security/Medicare card. Those are ours; the other guys want to take 'em away from you, and all the rest of it. That didn't work in the campaign in 1994. But if it really comes, Jim, to the point where major cuts are proposed, and it looks like some people are going to be suffering - - Medicaid is going to be cut -- make no mistake about it because Medicaid has no constituents.

MR. LEHRER: That's the poor.

MR. SHIELDS: Poor people. It's the poor people. They don't -- I mean, it's one thing to cut the programs of the affluent and the influential, but the poor folks on Medicaid don't have any PACs. They don't have any Political Action Committees. They're not holding any dinners for anybody. So what, what then I think the Democrats will try and make the case that look, here are these heartless, cruel people. It's why I've always felt that if entitlements were going to be cut, they had to be cut by a Democratic administration, just as Richard Nixon can go to China as a credentialed anti-Communist, it took somebody who had perception as a supportive champion advocate and believer in these programs to cut them, rather than those who had been their traditional critics.

MR. LEHRER: So the Republicans have a problem?

MR. GIGOT: I think the Republicans -- I mean, we saw through what Henry Waxman was talking about, the Democratic strategy, which is essentially that this election didn't mean a lot, that the public may have been unhappy with Bill Clinton's character, but they weren't unhappy with us, they weren't unhappy with our policies, and they're sitting there, waiting in ambush, come on, cut something, cut something, and they're going to try to take their head off and say, the public really doesn't want things cut, it really doesn't want a smaller government. I mean that's the strategy that they are pursuing. I think it will only succeed if Republicans are stupid enough to overplay their hand, to try to cut so much, or to try to go after Social Security, for example, which I think is suicidal. But if they do it reasonably, and across the board, I think they can accomplish a great deal.

MR. LEHRER: When Warren Rudman said -- I mean, Warren Rudman said, I mean, Warren Rudman said Social Security should be on the table. He said even --

MR. GIGOT: He's a former member.

MR. LEHRER: Why is it that that just can't -- I mean, he's talking about the very wealthy of this country should not get Social Security, is essentially what he is saying, and the very wealthy should not get Medicare, and if that were to happen, we just heard what he said, that would solve a lot of these problems while they worked out how to do, how to reform the medical care - - why is that not going to happen?

MR. GIGOT: It's not going to happen because of hard experience on the part of Republicans. One was 1985 and '86, that cost 'em the Senate. 1981, 1982, when Ronald Reagan stepped up to the plate and said, we maybe ought to fix Social Security long-term, they got walloped in 1982, as Democrats pulled out the Social Security card. The elderly vote, they vote often, they vote in force, and this is one of the contracts that voters have with politicians in this country, and it's very difficult to take that -- in fact, it's probably unfair --

MR. LEHRER: No matter what your income is?

MR. GIGOT: To current, current beneficiaries. If you want to talk about me, I don't expect to get Social Security. All right. Let's talk about the future. But my mother, you know, paid in, and she deserves it. That's the sense.

MR. SHIELDS: Jim, there's a startling figure. Think 17 years ago, 1978, not that far back, Jimmy Carter was President, and you know, we all have memories of that time. Seventeen years hence, 2012, if you don't do -- put the entitlements into the mix, if you don't, you don't take Social Security and Medicare and put 'em out there and say we've got to trim them, because this was made by a political decision. It was made in 1972, when Wilbur Mills, the chairman of the House Ways & Means Committee from Arkansas, had the delusion of grandeur to run for President of the United States, and he, in collusion with Richard Nixon, and some people on the Hill, put that automatic cost of living increase into Social Security, which triggers an acceleration that means no future generation is going to have less than or even the same of previous generations. It's always going to be more, cost more in the way of premiums being paid. Seventeen years from now, Jim, every penny of the federal budget -- forget the FBI, forget the Marine Corps, forget everything else, the Post Office, or anything else, the national parks, every penny will go for two items, entitlements and interest on the national debt, that's all. I mean, so all the discretionary cuts in the world mean nothing, I mean, unless this thing is addressed and wrestled with.

MR. LEHRER: And you think it's going to happen?

MR. GIGOT: I think that -- keep Social Security off but Medicaid and Medicare are going to be on the table. They have to be if you want, as Mark says --

MR. LEHRER: Otherwise -- the Contract With America is not going to work without out, is it?

MR. GIGOT: Well, the contract has a lot of other things that can work.

MR. LEHRER: I mean, on the budget, in the budget area, and reducing the size of the government, et cetera.

MR. GIGOT: In the long-term you cannot get to a balanced budget which the Republicans are promising without taking on Medicaid and Medicare, period.

MR. LEHRER: Got you. And with that period, we will end this sentence. Thank you both.

MR. SHIELDS: And Social Security.

MR. LEHRER: Okay. All right. Thank you both very much.

MR. MAC NEIL: Still ahead on the NewsHour, the line-item veto passes the House, and a habitat for wolves. FOCUS - PURSE STRINGS - VETO

MR. MAC NEIL: Now, the line-item veto. Last night, the House of Representatives voted overwhelmingly to get the President more control over the federal purse strings. Kwame Holman has the details.

SPOKESMAN: Happy birthday, Ronald Reagan.

MR. HOLMAN: Monday was former President Reagan's 84th birthday, and because he championed the cause of a presidential line-item veto, House Republicans rushed to pass a line-item veto bill yesterday in his honor.

REP. JIM BUNN, [R] Oregon: To my friends on the Republican side of the aisle, let's get to work. Pass the line-item veto, and win one for the gipper.

MR. HOLMAN: But not everyone was in the mood to celebrate.

REP. PETER A. DeFAZIO, [D] Oregon: Happy birthday, of course, to the ex-President; his legacy of a $3 trillion debt will stand as a monument for generations of Americans to come.

MR. HOLMAN: The line-item veto is designed to give the President greater authority to cut specific spending programs without having to reject an entire bill.

REP. GERALD SOLOMON, Chairman, Rules Committee: You know, the line-item veto is not going to balance the budget. The balanced budget amendment is not going to balance the budget. Only the will of this Congress is, but you need the prodding of the balanced budget amendment. You need the prodding of this legislation.

MR. HOLMAN: Current law allows the President's proposed spending cuts to occur only if approved by both Houses of Congress within 45 days. The House bill would allow the President's cuts to take effect unless overturned by 2/3 of the House and Senate.

REP. JOE KNOLLENBERG, [R] MICHIGAN: The line-item veto will end the Christmas tree practice of tacking on pet projects to wholly unrelated legislation, burying the details away from the public's eye. Last year, and in 1993, we saw this practice expand to an unprecedented level. The most flagrant abuse was after the city of Los Angeles suffered that devastating earthquake. Congress eventually passed the emergency supplemental earthquake assistance bill, but it wasn't just that, but not before they slipped in 10 million for a train station in New York, 1.3 million for Hawaiian sugar cane mills, 20 million to add employees to the FBI in West Virginia. And, of course, the list goes on, and the abuses go on, and the taxpayers are stuck with the bill.

MR. HOLMAN: But Democrat Martin Sabo, the former budget chairman, argued against giving the President too much authority.

REP. MARTIN SABO, [D] Minnesota: The reality is the base bill today transfers incredible power to the President to modify spending decisions by the Congress. And the President, with the support of 1/3 of the Congress, can maintain those decisions.

MR. HOLMAN: Illinois Democrat Cardiss Collins called the line- item veto unconstitutional.

REP. CARDISS COLLINS, [D] Illinois: This is critical. The Constitution did not say only some legislative powers shall be exercised by Congress. It does not say that Congress has to share its legislative responsibility with any other branch. Perhaps most importantly from the standpoint of this debate, the Constitution does not give the Congress the power to delegate its legislative powers to the President or to anyone else.

MR. HOLMAN: Opponents of the line-item veto expect the court challenge to its constitutionality, but the most contentious moment came when Utah Democrat Bill Orton tried to include within the reach of the bill spending for popular transportation projects considered by many to be the source of most pork barrel spending.

REP. BILL ORTON, [D] Utah: How can we say simply because this money is raised from a gasoline tax and is in a trust fund to be spent only for transportation projects that we don't have to be concerned about how wisely those transportation funds are spent?

MR. HOLMAN: Pennsylvania Republican Bud Shuster, chairman of the Transportation & Infrastructure Committee, took strong exception to Orton's amendment.

REP. BUD SHUSTER, Chairman, Transportation & Infrastructure: This amendment does not simply reach the project, rather entire highway programs could be cancelled by any President. A President could decide to wipe out a rural highway program, not a particular project but an entire program. He could decide to wipe out an entire urban funding program, not a specific project, but a whole urban program.

REP. BILL ORTON: Could the gentleman tell me from which funding the Bud Shuster Highway in Pennsylvania, which runs parallel --

REP. BUD SHUSTER: I'm delighted. That came -- I'd be happy to answer that.

REP. BILL ORTON: It's my time -- which runs parallel to the, the Pennsylvania Turnpike and runs a four-lane highway through a town of 1700 people -- was that from contract authority, was that from the general formula funding that the state determined, or where did that funding come from?

REP. BUD SHUSTER: I'll be happy to answer. I presume he's referring to Route 220. That came from contract authority as a high priority project. It's been in operation for five years, and in the past, the old highway experienced six fatalities a year. And since that new highway has been built, there have been zero fatalities. On top of that, 53 businesses have located and 4,000 jobs have been created. These are the kind of projects we need in this country.

REP. BILL ORTON: I claim back some time.

REP. BUD SHUSTER: More of them, not less of them.

REP. BILL ORTON: The question is: This is authority which a chairman or a ranking member or members of one committee can choose where to spend this money in their own districts or in other districts, and it is not being selected by the states. It is not subject to --

REP. BUD SHUSTER: Would the gentleman yield on that point?

REP. BILL ORTON: It is not subject to the same criteria.

SPOKESMAN: The gentleman's time has expired.

MR. HOLMAN: The Orton amendment was defeated handily, and when the line-item veto came up for a final vote, seventy-one Democrats joined all but four Republicans to approve it. And immediately following the vote at a Capitol Hill reception for Ronald Reagan's birthday, Speaker Newt Gingrich dedicated the House passage of the line-item veto to the former President.

REP. NEWT GINGRICH, Speaker of the House: When you think about what we've accomplished in these first five weeks, if we had a President here who understood it and helped us, we can't imagine what we could do together. The best is yet to come.

MR. HOLMAN: President Reagan was not able to attend last night's celebration. He suffers from Alzheimer's Disease and remained at home in California. In any event, the line-item veto isn't ready for delivery. It still faces a tough fight in the Senate this spring. FOCUS - NATURE OR NURTURE?

MR. LEHRER: Finally tonight, a story about wolves. They're extinct in many parts of the country, so much so that the federal government recently resettled a few in Yellowstone National Park. This set off an argument with farmers and ranchers, one that rings familiar thousands of miles away in North Carolina. Bob Garner of the University of North Carolina Center for Public Television reports.

BOB GARNER, UNC-TV: Eight years ago, researchers had four pairs of red wolves delivered to a remote area near North Carolina's outer banks. The wolves were gradually acclimated to their surroundings and then released. Their survival in the wild would mark the culmination of a captive breeding program designed to save the red wolf from extinction. Today there are some 50 wolves living near the original release area, but the animals' presence has divided residents of the farms and communities scattered across the flat coast plain.

JAN DiBLIEU, Conservationist: You do not know how incredibly awe- inspiring it is to have wolves back in this area. You hear a wolf howl in the night. It just sends chills through you. The notion of allowing a space for that kind of diversity in our landscape, to me it's just completely the way to go.

TROY MAYO, Commissioner, Hyde County, N.C.: It's not a healthy thing to put predators in an area that's not used to it. We've never had 'em in Hyde County. We're not used to 'em. We don't want 'em. The people don't want 'em. What good are they?

MR. GARNER: It was one thing to release red wolves on an experimental basis in the mid 1980s, when they were expected to remain here, entirely within the confines of the Alligator River National Wildlife Refuge. But when the project grew into a species survival plan in 1990, the numbers of wolves to be released and the area in which they were to be allowed to roam both grew considerably, and that's when most of the problems began. Residents are most upset that wolves occasionally attack livestock. That's why most states used to offer bounties for killing them. There are a few large herds of cattle in the area, but wolves have attacked pets and hunting dogs and are suspected of other incidents, including the disappearance of a small herd of goats. Jennifer Gilbreath, one of five wildlife biologists assigned to the program, says wolves suffer from a bloodthirsty reputation which is based more on fiction than fact.

JENNIFER GILBREATH, U.S. Fish and Wildlife Service: There's never been an attack on humans by wolves in the United States. Even in captivity, all they want to do is run from you. They're really very shy animals, and they would just as soon stay as far away from humans as possible. A lot of times what we'll find is for many problems wolves aren't even involved and that the problem is a neighborhood dog or a feral dog or a coyote or a fox.

MR. GARNER: Still, the wolves get blamed. Many local residents also hold them responsible for disrupting deer hunting, a major economic boost to the area. Biologists claim the wolves will never seriously deplete the areas overpopulated deer herd. But opponents argue that just the presence of wolves makes the deer harder for hunters to track down. Troy Mayo is a commissioner in Hyde County.

TROY MAYO: We want the game that we can handle, and that will help Hyde County and the citizens and people that come and visit us to hunt here. But we can't figure where this red wolf is any good to the citizens or to the people.

MR. GARNER: By 1993, U.S. Fish & Wildlife Service determined the 141,000 acre Alligator River refuge could not support more than fifteen or twenty wolves, so it began to release the animals into a smaller federal preserve nearby. Jim Johnson is the refuge manager at Alligator River.

JIM JOHNSON, Alligator River Wildlife Refuge: As those animals successfully reproduce, they are going to be dispersing young adults or sub-adults that are going to disperse into surrounding areas. So the nature of the animal's social structure and its life history, i.e., its home range, yes, you know, it requires a lot of territory in order to accomplish those recovery goals.

MR. GARNER: Officials also asked permission from surrounding landowners to let wolves roam on their property. The goal was to establish a population of about 100 wolves in Eastern North Carolina. The officials promised landowners theywould promptly remove unwelcome wolves, but in Hyde County, a majority of small property owners signed affidavits opposing the expanded wolf program.

TROY MAYO: When this thing started, it started on the refuges, and they were expecting it to stay on the refuges. But when U.S. Fish & Wildlife cut their fences and let wolves out to roam on private land, it became an issue. Later on, as people were asking them to remove 'em, they didn't get 'em off as quickly as they said they could, and they couldn't control it as well as they said they could.

MR. GARNER: Fish & Wildlife biologists contend they're doing their best to control the wolf program. They say they get only a few calls a month asking them to trap unwanted animals. But folks here want the right to shoot the wolves, if necessary, and not fear prosecution under the federal Endangered Species Act. Hyde County residents lobbied for a new state law which took effect January 1st. It allows landowners in the two most affected counties to shoot wolves without federal permission as long as they've asked the Fish & Wildlife Service to remove the intruders. Dwight Davenport is a local farmer.

DWIGHT DAVENPORT, Farmer: The state says, you know, you can shoot him if he's, if he's doing you bodily harm or destroying your property, but at the same time, the federal government's saying, if you shoot him, we're going to prosecute you. The state ain't got nothing to do with it because he's a federal protected animal, or whatever.

MR. GARNER: Fred Bonner, editor of Carolina Adventure Magazine, says some people worry they'll shoot red wolves inadvertently because they resemble coyotes.

FRED BONNER, Editor, Carolina Adventure Magazine: Coyotes are legal to kill year-round here in North Carolina. They're considered vermin. Mike Phillips, a biologist in charge, former biologist in charge of this project, will tell you right up front that at 25 yards he finds it very difficult to tell the difference in a red wolf and a coyote.

MR. GARNER: Some residents question whether red wolves are a legitimate species worthy of protection under the Endangered Species Act. In the wild, red wolves may mate with coyotes.

TROY MAYO: They feel that they find a strain that was called red wolf, but come to find out, they have proven that it's not what you would say full-blooded, and in order to be a true species, it has to be full-blooded, and it's not.

MR. GARNER: The entire budget for the red wolf program in Eastern North Carolina is under $400,000 a year. It goes for keeping the wolves healthy and preparing the animals to be released. The critics of the program resent their tax money being spent to protect what may be a hybrid animal. Conservationist and author Jan DiBlieu disagrees.

JAN DiBLIEU: The wolves that are here now, while they may not be 100 percent red wolf, they are representative of the species to the point where it is very worthwhile putting them back out. They're the only thing we have left of a species that once existed in the Southeast.

MR. GARNER: Biologists insist there is fossil evidence that red wolves like these once roamed freely in the Southeastern U.S., but there's a lot of argument over whether they actually lived in this particular area.

DWIGHT DAVENPORT: What the good Lord put right here to be here is fine, but he didn't put any wolves here, not in this neck of the woods, and the sooner they get rid of them, the better off -- I'll be satisfied.

MR. GARNER: But the Fish & Wildlife Service claims wolves did live nearby.

JENNIFER GILBREATH: Recently, one of the other biologists dug out from very, very old records from 1700s. In fact, they were so old that some monetary values were in pounds and this -- several gentlemen were paid bounties for wolves that had been shot and killed in Tyrrel County, so we do absolutely know that wolves were here.

MR. GARNER: Meanwhile, at least two red wolves were shot by unknown assailants in recent weeks. No one knows how many others may have disappeared in accordance with a popular new catch phrase among landowners and hunters: Shoot, shovel, and shut up. Residents continue to be angry that officials of the Fish & Wildlife Service went ahead with the expansion of the red wolf program without first winning public approval. And even one of the biologists admits it may seem like another classic case of federal government intrusion.

JENNIFER GILBREATH: Folks in Eastern Carolina had to change land practices for wetlands regulations and other EPA standards and the thought of an endangered species on their property and halting their land management is a huge scare, and just the government being there represents somewhat -- it can intimidating.

MR. GARNER: Zeno Edwards is a state legislator.

ZENO EDWARDS, North Carolina State Representative: They feel like that property rights are just as important as any other right guaranteed in the Bill of Rights, and the Endangered Species Act can't take over, take precedence over.

MR. GARNER: Edwards and others say the red wolf controversy in North Carolina warrants having the new Republican majority in Congress take a closer look at the Endangered Species Act, with an eye toward eliminating some of its restricted provisions on private land use. RECAP

MR. MAC NEIL: Again, the major stories of this Tuesday, President Clinton summoned Major League Baseball owners and players to the White House after they failed to meet his latest deadline to end their strike. The President could seek legislation for binding arbitration but congressional leaders indicated they opposed such a step, and the House unanimously passed legislation requiring criminals to pay restitution to their victims. Good night, Jim.

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