The MacNeil/Lehrer NewsHour

Intro

ROBERT MacNEIL: Good evening. In today's news headlines, the U.S. and Soviet Union agreed to resume commercial airline service. Second-day U.S. reaction to the Geneva summit was mixed. In South Africa, the death toll in the latest police clash with blacks rose to 13. Details of these and other stories coming up. Judy Woodruff is in Washington. Judy?

JUDY WOODRUFF: Our focus sections on the NewsHour begin with a look ahead after the summit: a newsmaker interview with one of the top U.S. nuclear arms negotiators, Paul Nitze. Then a background report on how the farm crisis got to be so bad, followed by two key senators who disagree about the federal government's role in solving it. And an update on a grocery strike in California that is spawning violence. News Summary

MacNEIL: In the first practical sequel to the Geneva summit, Moscow and Washington today agreed to resume commercial airline flights between the two countries. The agreement was initialed in Moscow by U.S. and Soviet officials. It provides tentative agreement for at least four commercial flights a week by Pan American World Airways, and four by the Soviet airline Aeroflot, beginning in April. Such flights were suspended nearly four years ago, as one of the Reagan administration sanctions protesting Soviet pressure on Poland. In Washington, President Reagan reported on the summit results to his cabinet, saying that he and Mikhail Gorbachev had cleared the air.

Pres. RONALD REAGAN: While we went there with a sense of realism, I don't think any of us expected to see that there were going to be any fundamental changes in Soviet philosophy. And there weren't. We covered all the topics -- arms control, security issues, human rights, regional conflicts and the bilateral issues -- and nothing was papered over or did anyone try to pretend that we had done better than we had on some where we just could not quite come together. We cleared the air, and I think we have a sense of the common ground. But one of the first things I told him, and I think we have agreed on, that words are not going to be enough; it will take deeds to eliminate the suspicions, the mistrust on each other's parts.

MacNEIL: Second-day reaction in Washington was mixed. Administration spokesmen said the results in Geneva were important. National Security Advisor Robert McFarlane said it "succeeded beyond any reasonable measure." Republican Senate Majority Leader Robert Dole called it "a hopeful beginning." Democratic Senator Bennett Johnston described the tone of Mr. Reagan's report to Congress as "one of hope rather than accomplishment." Democratic Senator Alan Cranston said, "I didn't expect a lot of substance; I wasn't surprised." Two former U.S. arms negotiators, Gerard Smith and Paul Warnke, expressed disappointment in the results.

PAUL WARNKE, former SALT negotiator: I think that the good news is that they're going to meet again; the bad news is that that may not amount to much either. You'd have to say that as far as the conference was concerned that the music was much better than the lyrics. There isn't much substance to the words.

GERARD SMITH, former arms control negotiator: Naturally I was pleased that the two chief magistrates had a civil conversation, and I don't want to denigrate the accomplishments of the non-arms-control parts of the summit meeting. I think some of them are fortunate, and I hope they'll have good effects. But in general it seems to me that Cap Weinberger has gotten his way; I think that the specifics on arms control are very slim pickings.

MacNEIL: Overseas, world political leaders were almost unanimous in expressing qualified satisfaction with the summit, while many commentators cautioned that friendlier personal rapport would mean little unless solid agreements followed. Judy?

WOODRUFF: There was action at both ends of the Capitol today. On the House side, members of the Ways and Means Committee aimed for a final vote on the biggest tax bill in U.S. history. Despite changes in the proposal originally submitted by President Reagan, committee chairman Dan Rostenkowski insisted the plan is a massive improvement over present law. In general, the bill would lower tax rates for most individuals while doing away with a number of loopholes and preferences. House Speaker Tip O'Neill has said he wants the full House to vote on the measure before the Christmas recess.

On the Senate side, members continued to wrangle over a farm bill that would gradually lower price support levels for key crops, making farmers less dependent on the federal government. Senate Republican Leader Bob Dole has vowed to finish work on the bill tonight, after which it would be sent to a joint House-Senate conference committee.

And from the Labor Department, news that consumer prices rose slightly more than usual in October. There was a 0.3 increase in the consumer price index. But economists said that was still the lowest pace in almost two decades.

MacNEIL: In South Africa, the death toll in a major clash between police and blacks yesterday rose to 13 today. Police claimed they had to battle particularly violent mobs near Pretoria. But witnesses accused police of firing on protesters without provocation. It was one of the bloodiest incidents in 15 months of anti-apartheid violence.

Meanwhile, rumors increased that Nelson Mandela, the long-jailed leader of the African National Congress, might be released. Here's a report from Michael Buerke of the BBC.

MICHAEL BUERKE, BBC [voice-over]: Nelson Mandela has spent 19 days now recovering from his operation in a back room in this hospital in the lower slopes of Table Mountain. It said he was fit to return to prison 10 days ago. Though it's officially denied, many believe he's being kept here while new negotiations are going on for his release. Mandela's wife, Winnie, has been allowed frequent visits. She says she knows nothing of any negotiations, but the speculation has grown so intense she called a news conference to explain her position.

WINNIE MANDELA, wife of ANC leader: Over the past few days there has been speculation, and we have no specific information as to when he will be released, what day, as I have pointed out. But do regard this speculation seriously, because of its unprecedented intensity.

BUERKE [voice-over]: This morning Mandela's lawyers went to the hospital for what they described as special consultations. They were given specific permission by the minister of justice for the visit. They were noncommittal when they went in, and even less forthcoming when they emerged two and a half hours later.

MacNEIL: In London, a leading South African churchman said Christians should reconsider their opposition to violence in the struggle against apartheid. Beyers Naude, general secretary of the South African Council of Churches, said he personally could not condemn a person who used violence to fight against the system to achieve his liberation.

WOODRUFF: For the third time in a little over a year, a U.S. Navy official has been arrested for spying. But this time it's not the Russians but the Israelis who were reportedly receiving military secrets. Thirty-one-year-old Jonathan Jay Pollard, an intelligence analyst, was arrested yesterday by FBI agents after he tried to escape into the Israeli Embassy in Washington. U.S. officials say Pollard is charged with selling secrets to the Israelis for nearly $50,000, and is also suspected of spying for Pakistan as well.

From Lebanon, word that the envoy from the Anglican Church who's been trying to work out the release of a handful of Americans being held hostage still faces very grave difficulty. That was how Terry Waite described his task after meeting two more times with the Lebanese kidnappers. But Waite told reporters that with more work he believed the problems can be resolved. As Waite was speaking to reporters in West Beirut, Druse and Shiite Moslem militiamen were battling in the streets outside for control of the Moslem quarter. We have a report from Greg Thompson of Visnews.

GREG THOMPSON, Visnews [voice-over]: The fighting became more intense as the day wore on. The gun battles erupted on Independence Day. After 24 hours of incessant mortar and artillery exchanges between Druse and Shiite militiamen, there was no sign of a letup. More than 30 people were killed in the street fighting, with up to 200 injured. Radio broadcasts appealed for blood donations and urged firefighters to extinguish blazes that burned across the city. Residents huddled in basements trying to escape. Tanks and mortars were reported in action in some areas, as well as anti-aircraft machine guns and grenade launchers. The fighting went on despite calls from militia leaders and from Syria for a ceasefire. Throughout the day the front line kept shifting as the rival militias moved through the city.

WOODRUFF: The French defense minister today said that his government is working on the release of two secret agents sentenced yesterday in New Zealand for the bombing of a Greenpeace protest ship and the death of one of the crew. The two French army officers received 10-year prison terms after pleading guilty to manslaughter charges.

MacNEIL: At home, in the Florida panhandle more than 100,000 people were without electricity today and 19 counties were under a state of emergency in the wake of Hurricane Kate. The storm has now abated and gone out to sea over the Atlantic. But last night the storm was raging furiously when it struck Panama City Beach, with winds of 85 to 100 miles an hour and torrents of rain. The storm was blamed for six deaths in Florida and Georgia over a three-day period. It was the fourth hurricane to strike the Gulf Coast this year, and one of the most severe on record for the month of November, which usually marks the end of the hurricane season. Today the scenes of wreckage demonstrated the force of the storm and the devastating effect of a combination of heavy rain, high tides and heavy seas.

WOODRUFF: Coming up on the NewsHour, a newsmaker interview with veteran U.S. nuclear arms negotiator Paul Nitze, a documentary report on the farm crisis followed by a talk with two senators who disagree about what the federal government should do about it, and a look at California's worsening grocery strike. Paul Nitze: Eye on Arms

MacNEIL: President Reagan told Congress last night that he and Mikhail Gorbachev had moved arms control forward at the Geneva summit. For more on the meaning of what was achieved in Geneva we have a newsmaker interview with the President's special advisor on arms control, Paul Nitze. Ambassador Nitze headed U.S. delegations at several phases of previous disarmament talks.

Mr. Ambassador, how has arms control been moved forward by this summit?

Amb. PAUL NITZE: I would say there was not a breakthrough on arms control. The problems involved are very fundamental, complex. One can't break through that mass of problems within a period of 48 hours. What is necessary is to set a mood, a climate, a process which can give us more hope than existed before. I think that was accomplished.

MacNEIL: And in that sense it was moved forward, a climate was created, you mean?

Amb. NITZE: Exactly. And a process of discussions was agreed upon.

MacNEIL: You just heard one of your predecessors, Gerard Smith, characterize the outcome as Cap Weinberger got his way; there were slim pickings on arms control. What is your comment on his observation?

Amb. NITZE: I should say that was the reverse of the truth. The problem was not our position; the problem was the Soviet position. We found that there was little give; in fact, no real give in the Soviet position during the 48 hours that we were talking to them. Their position with respect to the START part of the talks, the effort to get large reductions, and on the strategic nuclear forces, remained what it had been before, and that is, that on their side only the systems with intercontinental range should be counted, when on our side the systems not only of intercontinental range, but also the systems of intermediate range -- what they call medium-range forces -- should be also aggregated with our intercontinental ones, resulting in a completely unequal basket of systems on their side and on our side. This has to be changed before we can really make progress on that aspect of the offensive negotiations.

MacNEIL: When the communique, the agreed statement, said it was agreed to accelerate the Geneva arms talks, what does that mean, accelerate them?

Amb. NITZE: What that means is to try to make greater progress in a shorter period of time. After all, if you look at what has been going on here for a long period of time with respect to the START negotiations, just to take that as an example, the position of the Soviet side has not really moved; it's moved backward since 1983. So we've got to get it back to where it was in '83, move it forward. I think we've got it on the way back to where it was in '83. We hope to get it moving forward.

MacNEIL: Was part of the calculation that by scheduling another summit, Reagan-Gorbachev summit, it would put additional pressure on arms negotiators to come up with something?

Amb. NITZE: It would give an additional opportunity, both at the foreign ministers' level and later at the summit, to give a further continuing impetus to these negotiations.

MacNEIL: Why were no fresh guidelines given to the arms negotiators by the summit?

Amb. NITZE: There was a paragraph in the agreed document which dealt with these problems, and it did in fact make some incision in the problem -- granted, very small. It did, for instance -- we did get agreement from the Russians to the idea of an interim agreement with respect to INF systems, the intermediate-range systems in Europe, separated from prior agreement on the space SDI-type issues.

MacNEIL: Mr. Shultz said yesterday, Secretary Shultz said, the summit had given, as you just said, some political impulse to the negotiations in Geneva. And he went on to say, "which will perhaps be reflected in our own discussions in Washington." What did he mean by that?

Amb. NITZE: He means by that, that now there's an opportunity for us to look again at the structure of the negotiations. We've got a clearer idea as to what the basic problems are between the USSR and ourselves, and we could go over all this again and perhaps go into the negotiations again when they begin, probably in January, with the somewhat revised approach.

MacNEIL: Do you come back to Washington, all of you, with some new considerations to go over, with some new suggestions to consider?

Amb. NITZE: I think we will get at this immediately in the next few weeks and see whether we can agree on a line that will be taken in January.

MacNEIL: Zbigniew Brzezinksi, the national security advisor to President Carter, said today that between now and the next meeting, "We will have to decide what we really want on arms control," adding "I'm not really sure we now know what kind of an agreement we want." Is he right? Does the administration in fact know what kind of an agreement it wants?

Amb. NITZE: It does indeed know what it wants. The problem is that the Soviets want something quite different, and the problem at issue is, how does one move these positions together in some way that is not just a compromise but which would in fact result in an agreement which would in fact reduce the risk of war? That's what we're interested in. It can't be just any old agreement; it has to be an agreement which results in more balanced levels and levels which are more stabilizing, not destabilizing. That is what is necessary.

MacNEIL: Mr. Reagan told Congress last night -- "he made clear" were his words -- to Mr. Gorbachev that the Strategic Defense Initiative, the so-called Star Wars, was not an offensive weapons system. Yet everything one heard Mr. Gorbachev saying was that that wasn't clear to him at all. Now, how clear was it made? What clarification was achieved on SDI between the two leaders?

Amb. NITZE: The President laid out his view of SDI very clearly. First of all, that SDI was a research program, that we had not yet determined whether it could in fact make a real contribution to reducing the risk of war; getting away from the threat of mutual mass destruction to a denial of any opportunity for anybody to gain from the initiation of a war with nuclear weapons. And that what we were looking for if this research were successful was for a jointly managed transition to a period where one could reduce and then gradually eliminate the nuclear weapons on both sides. Now, that was what he was -- held forth very eloquently on, and I think he didn't persuade Mr. Gorbachev within the 48 hours that were available. In fact, it was much less than that of negotiating time. There were 10 hours of plenaries and five hours of private discussions, about half of which were devoted to such problems as regional issues and bilateral issues, and half of which was devoted to arms control issues.

MacNEIL: You say he described it as a research program. Was there any discussion of what would constitute permissible research in the eyes of the Soviets?

Amb. NITZE: They did not ask that question.

MacNEIL: Did you expect them to?

Amb. NITZE: I expected them to, but they did not ask that question.

MacNEIL: Why do you think that was?

Amb. NITZE: They wanted -- they were insisting upon a much more fundamental approach, and that was that anything that had to do with the creation, as they called it, of space strike weapons, was to be banned. And that was fundamental research on our side, but not on their side, because they are insisting that their comparable research is not directed toward the same object as ours is.

MacNEIL: Because Mr. Gorbachev himself talking to Time magazine and later to some U.S. senators, like Senator Nunn, and recently Soviet -- this week Soviet officials in Geneva have been hinting that there is some room for negotiation, there, have they not? That by defining what kind of research in their eyes would be permissible to the United States and not, there might be some way of getting around this impasse.

Amb. NITZE: They did not offer such room. The extraordinary thing was that they did not offer really anything attractive, any move on their side from wholly one-sided positions on the offensive limitations side, on the definition of the systems which were to be reduced in their 50 reduction idea.

MacNEIL: Was the U.S. ready to consider such a proposition had it been put forward by Mr. Gorbachev?

Amb. NITZE: Depended upon the conditions. What we were interested in was, first of all, whether or not they were really prepared for 50 reduction in nuclear weapons -- in other words, the reentry vehicles on ballistic missile systems -- or whether this was really just a one-sided way of using the 50 idea for, you know, purposes of conveying something which really wasn't contained when one looked at the detail of their language.

MacNEIL: Some statements by administration spokesmen make it sound as though they're regarding this as a victory for Mr. Reagan over Mr. Gorbachev on SDI. Do you see it that way?

Amb. NITZE: I don't see it that way, because really what we were trying to do was to get an understanding, and the President worked -- did make our case very clear; he did not back away from our case. Our case is a sound case. He was not moved in any way by the arguments that Mr. Gorbachev was making. I think there's a greater chance that in the future there will be an understanding of our position and an ability to move forward on it.

MacNEIL: Do you expect the Russians now to come back and do what they didn't do at Geneva, and start discussing what might be permissible and not permissible, a potential agreement on what kind of research could go ahead with their blessing?

Amb. NITZE: And I also hope that it will be possible now to talk about all three parts of the Geneva negotiations. There were supposed to be substantive discussions on an interim agreement with respect to intermediate-range systems. There were supposed to be substantive negotiations with respect to the intercontinental systems. There were also supposed to be substantive discussions on the space and defense systems. But they were insisting that we first had to agree to a ban on everything having to do with space and defense systems before they would seriously discuss the other two. Now I think it is possible that we'll be able to discuss all three concurrently.

MacNEIL: Did Mr. Reagan give Mr. Gorbachev, or did it come up, any assurances about how the United States would observe the anti-ballistic missile treaty in developing or researching Star Wars?

Amb. NITZE: He did indeed. He made it clear that we intended to remain wholly within what was permitted under the ABM treaty, that we would live by the ABM treaty, and our program is fully and would be fully in conformity with the ABM treaty.

MacNEIL: You've been to a lot of meetings with the Soviets. Was the chemistry that we've observed from a distance and had seen reported between Mr. Reagan and Gorbachev, was it unusual in the history of these kinds of encounters?

Amb. NITZE: I thought it was. I thought Mr. Gorbachev was impressed by President Reagan, that he saw him as a reasonable, witty, open person, but still with a strong will, with firm determination. I think he found him an interesting person and an agreeable person to deal with, even though there were fundamental and very basic differences in their point of view both as to human rights, as to the world situation, as to the future of the world with respect to arms control, with respect to terrorism, with respect to regional issues. There were deep differences.

MacNEIL: You almost got the impression looking at the pictures of them that they liked each other personally. Is that a correct impression?

Amb. NITZE: I think it is. I think they had no differences except differences over principle.

MacNEIL: They could be friends if it weren't for those things, you mean.

Amb. NITZE: That's right

MacNEIL: Sam Nunn, the senator I referred to earlier, said today he believed now we have the best opportunity to get serious arms reduction agreements than we've had in many, many years. Now, he's a senator well-plugged into this whole process. Do you agree with him?

Amb. NITZE: I do, although I would make the caveat that the situation has not been favorable up to this time, and it still isn't that favorable to making real progress. We've got real work to do.

MacNEIL: Well, Ambassador Nitze, thank you very much for joining us. Judy?

WOODRUFF: Still ahead on the NewsHour, a background report on how the farm crisis got to be so bad, and an interview with Senators David Boren and Richard Lugar on what role Washington should play in resolving it. And a look at California's latest crisis, a supermarket strike. Food Fight

MacNEIL: Next tonight, a documentary report on an unusual labor dispute in California. For two and a half weeks employees at nearly 1,000 supermarkets in southern California have been on strike and locked out. The ongoing labor dispute is one of the most bitter in that area's recent history. As Jeffrey Kaye of station KCET-Los Angeles reports, the reason for the bitterness is that both sides recognize the stakes are high.

JEFFREY KAYE [voice-over]: The strike lockout affecting 22,000 supermarket workers and seven grocery chains has turned southern California into a battle zone. At issue is management's determination to implement radically new policies that would loosen organized labor's grip on the heavily unionized southern California supermarket industry. Strikers and supermarket chains are engaged in what each side says is a battle for its survival.

JAMES BROOKS, Teamster: All it means is they want to take away everything from me. I worked 18 years to get to where I'm at now; now they want to take everything away from me. So I'm picketing, trying to save it.

KAYE [voice-over]: Twelve thousand drivers and warehouse workers represented by the Teamsters' Union, together with 10,000 meat cutters, say their futures are threatened by management demands for concessions. The supermarket chains spent months gearing up for this dispute. When workers struck one chain, Von's, on November the fifth, six other chains immediately locked out their employees and set the wheels in motion for a protracted struggle. The last supermarket labor dispute here in 1982 lasted only five hours. This time, according to Jan Gray, a vice president of the Ralphs chain, the gloves are off.

JAN GRAY, Ralphs Grocery Company: We're ready to take this strike as long as it need be and we're prepared, and the strength of our organization is coming through.

KAYE [voice-over]: The supermarket chains, with a total of 980 stores, argue they need to change labor practices in order to remain competitive. Management wants to be less reliant on union workers. It wants to be able to subcontract work to nonunion employees and to institute a two-tier wage system in which newly hired butchers would be paid less than veterans. The management demands amount to major concessions, and anger on the picket lines has turned to daily reports of violence. Los Angeles County set up a hotline after syringes containing traces of pesticides were found at several of the stores involved in the dispute. An anonymous letter said food was poisoned to protest the supermarkets' refusal to settle the strike. Although the FBI is investigating, they have not been able to connect any food poisoning to the dispute, and strikers disclaim responsibility. Other, more traditional forms of strike-related violence are common.

CHARLES SHELTON, truck driver: I don't know. The guy -- I guess whoever it was, just walked up very quick and took their shot and took off.

KAYE [voice-over]: This truck, driven by strike-breaker Charles Shelton, was hit by a shotgun blast. One market loading dock was set on fire. Another store was the target of a stink bomb. Temporary workers hired to replace strikers have been injured, and skirmishes on picket lines have led to numerous arrests.

[on camera] The unions are attempting to disassociate themselves from the violence. Labor leaders are offering rewards for information leading to the conviction of anyone responsible for the violent act.

[voice-over] While many shoppers seem to be taking this dispute in stride, both sides argue that for them the financial stakes are enormous. The stiff demands by management are part of a national pattern, according to Professor Daniel Mitchell, director of the Institute of Industrial Relations at UCLA. He calls this management approach "concession bargaining," where unions are asked to give up wages and benefits.

DAVID MITCHELL, UCLA: There's been a wave of concession bargaining over the last few years in the United States, and the supermarket industry has figured rather prominently in that. The usual explanation of concession bargaining, namely, that it has something to do with import competition, deregulation and so on. Those are very -- very widespread explanations. You can see here in the supermarket case that that really isn't the issue here. You can't import your groceries from Taiwan; the supermarket industry hasn't been deregulated. And so what I think you see here is just a spread of the general concession bargaining movement to an industry which is in fact somewhat insulated from some of those special pressures.

KAYE [voice-over]: But the supermarket chains claim there are special pressures, that higher labor costs have put a stranglehold on management. The grocery industry is changing, selling more and more nonfood items. This puts it in competition with nonunion retailers, according to industry representatives. David Willauer is a negotiator for the southern California supermarket chains.

DAVID WILLAUER, industry spokesman: They are competing now with other retail operators that are not in the supermarket business, and in this sense I'm speaking of large drugstores, large discount houses, many of whom carry the exact same products that are carried by the supermarket chains, and because they have tremendously lower labor costs, not only in the warehousing and transportation end of it, but in the stocking at the retail level end of it, because of their tremendous lower labor costs, the supermarket chains are threatened right now in the ability to compete.

GERALD McTEAGUE, Meat Cutters Union: This is the biggest lie that they're fabricating. The competition is among themselves.

KAYE [voice-over]: Gerald McTeague, chief negotiator for the Meat Cutters Union, says that while there may be some new sources of competition, generally supermarkets compete against each other.

Mr. McTEAGUE: The intent of the employer is to reduce their labor cost, which truthfully we don't see any reason for them to do at the present time. The profits that they've made these last three years have been enormous, and we feel that what they're doing today is they're using those profits to try to formulate a base for themselves to make more profits in the next three years. And we understand that, but we also would like some of that pie that they're enjoying.

BROADCASTER: Some of the leaders involved in the current supermarket strike say there have been two negotiating sessions this week and some progress has been made.

KAYE [voice-over]: The specifics of the negotiations have been kept secret, but if precedent is any lesson, the unions would appear to be on the losing end. Supermarket workers have made concessions in other parts of the country, and despite a brave front and support from other unions, observers believe that labor will make at least some concessions in Los Angeles. Farm Crisis: How to Solve It?

WOODRUFF: With us now to explain how they would like to see the farm crisis resolved are two senators who have just left the debate under way on the Senate floor. They are David Boren, Democrat from Oklahoma, and Richard Lugar, Republican from Indiana.

Senator Boren, let me just begin with you. There are those who say that it's the federal government, after all, who is largely responsible for the fact that the farm crisis has gotten as bad as it is. Is the legislation that the Senate is considering right now going to continue that trend, or is it going to make things better?

Sen. DAVID BOREN: Well, Judy, I'm afraid that this legislation's going to make things worse, because it's going to reduce the farm incomes by some 6% from current law, and under the current law we had a 36% reduction in farm incomes last year. Actually, if you take wheat as an example, the price in real constant dollars is lower now by some 50% than it was in 1929. So we have a bill before us now that's going to drop farm income another 6%. I think it's a formula for disaster on the farm.

WOODRUFF: What do you think would be a better solution, in a few words?

Sen. BOREN: Well, I would like to see us give farmers a chance to get their income levels up. If we don't put money into this farm bill now, we're going to end up putting more money later on into a credit bailout. We already have the Farm Credit System asking for as much as $10 billion. I would much rather see us give the farmers a chance to earn a fair return on their crops now, get fair pricing policies established in this bill, than to have the taxpayers turn around later and pour billions of dollars into a credit bailout.

WOODRUFF: Senator Lugar, that sounds pretty reasonable, doesn't it?

Sen. RICHARD LUGAR: Well, Judy, the problem is that the bill we're now discussing is going to cost $52 to $54 billion over three years -- that's an average of $17 or $18 billion a year -- it's a very expensive bill. The country spent $3 billion, just three, on agricultural programs during the 1970s, and we spent $50 billion during the last four years, an average of about 12 . So if David is correct that this is going to be a disaster, I would suggest there is almost no way the federal government could spend enough money that would make a difference if we're going into bankruptcy anyway. And I would suggest the real dilemma is that because of federal deficits -- and this bill will contribute to that -- interest rates have risen, costs for farmers through inflation in the '70s really put them into some difficulty, while they were speculating on land. And finally this bill will unfortunately not do very much to stimulate exports, and the result is a mishmash on the floor presently.

WOODRUFF: As I understand it, Senator Majority Leader Robert Dole has spent the last few days doing a fair amount of political trading in terms of adding sweeteners here and there, offering this and that to the rice farmers, to the sunflower seed farmers and so forth. Is that what's happened, Senator Lugar?

Sen. LUGAR: Yes. That's exactly what's occurred. Bob Dole figured correctly he needed to get 51 votes for sure to pass this bill, and it was hard to do that without giving away the store. So in essence this bill now includes something for about everybody in American agriculture, a good bit for everybody, and even contradictory principles. It has a one-year freeze on target prices, and a four-year freeze, so that if it passes in conference, the conferees can take their choice. It's just simply an example of what occurs when chaos ensues and people don't have a clear idea where they're heading.

WOODRUFF: Is it chaos, Senator Boren?

Sen. BOREN: Oh, it absolutely is. I would call it a phony or a hokey bill. I mean, it rises to new levels of doubletalk that I didn't think we could ever accomplish in Washington. We have a situation now where the bill, one part of it says there's a four-year target price freeze, another part says there's a one-year freeze. Usually if you're going to contradict yourself you at least do so in the fine print in the footnote. This is such a bold example of doubletalk that it's right there for everyone to see. The farmers are in such desperate shape, they don't deserve this kind of duplicitous, phony approach. They ought to have the Senate settle the issues and have a program that will be helpful to them, and that's the reason so many of us on our side of the aisle attempted to kill this proposal. We felt that corn and wheat and others were cut back in order to make deals with the sugar and rice producers. It's not a fair and balanced package, and it's really not a good farm bill at all.

WOODRUFF: But at the same time, Senator Boren, as you know, there are those who are saying, well, the Democrats are opposing this because they want the monkey to be on the backs of the Republicans when they go home to seek reelection next year, and that that will give the Democrats some advantage in the farm states and maybe even give them a leg up to winning a majority in the Senate next year.

Sen. BOREN: Well, I would hope that we would just do what's best for the farmer. That's my concern. We have a crisis that's not only going to affect the farmers. If we let these farmers start to fail, it's going to affect the whole economy. Just remember this: $133 billion of farm debt is in the hands of those who are not likely to be able to pay it on time this year. That's almost as much as the entire Third World owes all American banks, and that's going to have a ripple effect all across this economy if we let it happen. That's the reason I say let's be wise and write a farm bill now that will give the farmers a chance to earn an income instead of coming out here with massive bailouts later on to save the financial system.

WOODRUFF: But that's a considerable amount of money he's talking about, isn't it, Senator Lugar?

Sen. LUGAR: Well, yes, and I think Senator Boren's prescription is all well and good, but the facts of life are that we've got to pass a farm bill. Ideally we would pass one that is a good bill. I suppose, as I've admitted and he has too, we're down to a point of a bill or no bill. And I think no bill means a lot of chaos beyond anything in this bill. We still have a chance in the conference with the House members to work it out, to try to find something the President will sign. And that's a major factor, because as the bill now stands, it's over the $50 billion limit that the President says that he will sign. So we still have some tailoring to go on this bill, quite apart from the ideal one that my colleague would sponsor.

WOODRUFF: Do you think the President -- Senator Lugar, do you think the President would sign the bill at the level of spending it is right now?

Sen. LUGAR: Well, he would be tempted to do that. My guess is that it will come down by the time people have figured it backward and forward to about $50 billion. And most of the calculations are very rubbery figures. These estimates are based upon acreage reductions, and the thought that therefore the amounts coming off farms would be less, and that never has been true in the past. So essentially this thing is going to be costed out on the basis of the weather, ultimately -- whether we can get export markets up, and whether farmers have a certain amount of revival. And I would argue there is a lot of income in this bill for farmers. I would hope that we could be as generous as possible in the coming year while people work the situations out. But I think ultimately we've got to try to balance the budget of the country, move it to some fiscal sanity, and the farm thing has got to be a part of that.

WOODRUFF: Well, Senator Boren, what about that point?

Sen. BOREN: Well, Judy, I think we ought to put it in perspective. Here we've had billions of dollars of increases in the defense budget, billions of dollars of increases for the social program, and this bill we're talking about right now is actually $4 billion lower than an extension of the current farm bill. So we're talking about a cut for farmers when other parts of the budget have not even been frozen, and we're talking about a part of our society that is in the depths of a depression. So how in the world can that be considered fair? And I hope the President will get the facts before he acts; I hope he'll realize the danger to the entire system. We've asked others not to make the same kind of sacrifices. Here we're talking about a bill that's lower than the current farm program, and there's talk of even vetoing that. I can't understand that; I don't think that's fairness or balance.

WOODRUFF: Well, what -- are you arguing that farmers should not be sharing in the sacrifices?

Sen. BOREN: Farmers have shared. They're here experiencing a cut. Has the defense budget been cut? No. We have a two to three percent growth, billions of dollars of growth; social programs are going up billions of dollars, and here we're talking about a farm bill that is lower than spending would be under current law. You know, I think sometimes the American people forget that the farmers are really subsidizing our entire economy. We talk about farm subsidies, but in other nations the average is 20 to 25 percent of the income of the workers spent for food. In our country it's only 14 or 15 percent. The farmers are subsidizing the rest of us, and the problem is they're going broke. We have to set up a structure that gives them a fair return, or we're going to lose that food bargain and one of these days people are going to wake up and say, "Why did you people in Washington let the family farmers go out of business?"

WOODRUFF: Senator Lugar, he says the farmers have already suffered enough.

Sen. LUGAR: Well, of course they have. But the facts are that so have most small businesses in this country, and so have many people who have gone out of business already. The farm policy has been one of attempting to keep every farmer in business and to make certain the federal government provided enough money to do that. At some point that will not work. It could well be, Judy, that the net income in agriculture in this entire year will come almost entirely from the federal government. Now, that means that we are producing more than we can consume, and it simply means that people will have to make market decisions without the federal government undergirding all of it. To say that we're going to run out of food I think is nonsense. The facts are that we will have abundance for a long time, and we've had abundance because we allowed prices to go down and Americans to have a higher standard of living using less of their money for food. So that's not a subsidy of people; it is a recognition of the genius of American agriculture, which I don't think is being well served by spending $54 billion over three years to subsidize farming.

WOODRUFF: Well, Senators, we will be continuing to watch to see what happens on the Senate floor tonight. We thank you both for taking time away to be with us, Senator Boren, Senator Lugar.

And now we have an extended report from correspondent Tom Bearden on how the entire farm crisis came about. Anatomy of a Crisis

TOM BEARDEN [voice-over]: Don Loeslie has been farming in northern Minnesota for more than a quarter of a century. This fall, while hard times and farm foreclosures were capturing headlines throughout the Midwest, Loeslie was quietly harvesting one of his best crops ever, some 200,000 bushels of wheat. When supplies are low, that's good news. But for the past several years American farmers have been producing far more grain than they can sell. That's driving farm prices down and the cost of government support programs up. It's America's agricultural surplus roller coaster. Farmers have been riding it and politicians have been trying to control it for nearly half a century.

NEWSREEL ANNOUNCER: 1947. For the eighth year in a row our farmers produced a bumper wheat crop. Our wheat harvest this year was the largest in history.

BEARDEN [voice-over]: Don Loeslie was nine years old in 1947. He and his father helped produce that bumper crop with this old three-bottom plow. Nobody worried about surpluses back then. The world needed every bushel America could produce. Wayne Rasmussen is the chief historian of the Department of Agriculture.

WAYNE RASMUSSEN, Department of Agriculture: At the end of the war the first thing we did was start shipping stuff overseas to help the ravaged areas of not only Europe but of the whole world -- Japan and all of the islands where the war had been fought so bitterly. While those people were without food, for two years the United States sent supplies overseas to help these nations recover.

BEARDEN [voice-over]: After the war the Truman administration encouraged farmers to keep producing by guaranteeing them high prices for their crops. If actual market prices fell below the guaranteed price, eligible farmers could sell their crops directly to the government.

Mr. RASMUSSEN: We kept guaranteeing these fairly high price supports until 1954, when price supports did come down. Meanwhile, though, surpluses had begun to pile up, and we'd had various controversies over legislation and what to do with these surpluses.

BEARDEN [voice-over]: The Eisenhower administration could have paid farmers not to plant, but Ezra Taft Benson, President Eisenhower's secretary of agriculture, was philosophically opposed to putting restraints on farmers. Instead the administration opted to push exports with a program called Food for Peace. Millions of tons of American grain were shipped to hungry nations throughout the world. It was either given away or offered at attractive terms so needy countries could afford to buy it.

EZRA TAFT BENSON, former Secretary of Agriculture: Foods will continue to be distributed overseas with full recognition of their American origin, identified as gifts of the people of the United States.

BEARDEN [voice-over]: Food for Peace slowed the growth of surpluses, but didn't stop them. American farmers were simply too productive. A technological revolution began in the 1950s. Increased use of fertilizers and pesticides coupled with improvements in machinery and seeds were raising yields dramatically, from 17 bushels of wheat per acre in 1945 to better than 20 per acre in 1959, the year Don Loeslie bought his first farm land.

DON LOESLIE, farmer: Well, I would say that the first crop that I planted here, if I'd of had 20-25 bushels of wheat, I would have been very, very happy.

BEARDEN [voice-over]: By 1960 the steady improvement in yields had driven the surplus roller coaster to an all-time high.

Mr. RASMUSSEN: The surplus problem had really reached a crisis proportion by 1960. In fact, the presidential campaign of 1960 turned in part upon the whole question of surpluses. And when President Kennedy came into office his first two orders were: get more food out to the needy American people, and increase our shipments overseas to the developing nations and the needy people overseas.

BEARDEN [voice-over]: President Kennedy also resorted to a large acreage reduction program. The policies worked. Surpluses careened downward. They began increasing again in 1967, but then there was a serious crop failure in India and Pakistan. America's surplus grain saved millions of lives.

[on camera] Until the early '70s, most American agricultural products were sold here at home. Only about 20 of production was sent overseas, and most of that was either subsidized or given away. But in 1972 that situation changed dramatically.

CAROL BROOKINS, World Perspectives: Demand exploded in 1972 with the Soviet crop problem, a very, very poor harvest in the Soviet Union, and the Soviet government's decision to fill that demand for food outside of their country.

BEARDEN [voice-over]: Carol Brookins is publisher of World Perspectives, a news service which analyzes agricultural issues.

Ms. BROOKINS: At the same time we had poor crops in the United States, we had poor crops in the European Community. There were crop problems in Canada. And the basis for production in the world was not high enough and large enough to fill that demand, so prices were driven higher, and this encouraged a dramatic turnaround in our policy from taking acreage out of production and paying farmers to take acreage out of production, to encourage them to produce for the world marketplace.

BEARDEN [voice-over]: Farmers were told to plant fence row to fence row. Don Loeslie and his colleagues were thrilled.

Mr. LOESLIE: I as a producer was saying this is the way it should be, agriculture should not have been suppressed all these years; we are finally getting our share, a chance to move and be a contributor to the economy of this country.

BEARDEN [voice-over]: Demand was so high that the U.S. grain surplus plummeted in spite of dramatically increased production. Then, in 1974, the American heartland was scorched by a severe drought. Supply dropped even further. Now the government had a new problem: food prices were soaring. Consumers protested loudly. President Nixon and then President Ford switched their priorities from promoting exports to prohibiting them. First a brief embargo on soybean exports to Japan, then a suspension of new grain sales to the Soviets.

Mr. RASMUSSEN: This was the first step in making people overseas, our good customers overseas, worried about whether indeed America, the United States, was a good sound supply, or whether they might not be cut off at any time.

BEARDEN [voice-over]: At the time, alienating foreign customers was not a major concern. The United States was the only country that could produce and transport large volumes of grain efficiently.

Ms. BROOKINS: But what we seemed to forget about during the 1970s is that as prices rose, a lot of other countries began to get the same idea that we did, to expand their production base. As we were adding hundreds of acres, thousands of acres to production, so did a lot of other countries.

BEARDEN [voice-over]: By 1976, surpluses were surging upwards, as they had in the '50s. But applying the brakes was far more difficult. America's farmers had grown much more productive. But more important, the export markets that had bailed out the U.S. in the '60s were no longer the sole domain of American farmers. Canadian, European and Australian farmers were competing too. The mounting surpluses were felt at home in lower grain prices. Farm income fell 42 from its 1973 high, and it was the farmers' turn to protest.

Ms. BROOKINS: They had expanded production, they had planted fence row to fence row, as we say, and there wasn't the market out there for the production. They had taken out loans at very high prices, at very high cost, because you know -- we all know what was happening to interest rates at that time, and their input costs were going up because of very high inflation, and they were caught in a cost-price squeeze. And they demanded changes in programs from Washington.

BEARDEN [voice-over]: Not wanting to alienate farmers in an election year, Gerald Ford chose to boost support prices rather than attack the cause of the problem, the surplus. Four years later, his successor, Jimmy Carter, raised support prices again. Farm income increased, but so did the cost of American grain abroad. America's best hope for solving the surplus problem was exports. Those hopes were dealt a severe blow in 1980 when the Russians invaded Afghanistan. President Carter retaliated with a grain embargo.

Pres. JIMMY CARTER [January 4, 1980]: I have decided to halt or to reduce exports to the Soviet Union.

BEARDEN [voice-over]: And surpluses mounted even faster, and once again foreign buyers had reason to question the reliability of the United States as a supplier.

[on camera] 1981 marked the beginning of the worst depression in American agriculture since the '30s. Everything seemed to go wrong. A strengthening dollar made U.S. grain more expensive abroad at a time when farmers were exporting two out of every five bushels they produced. At home demand was sluggish because of the recession.

[voice-over] In 1982 grain surpluses reached an all-time high. Farm prices were so low that farmers were selling more and more grain to the government. The cost of agricultural programs was skyrocketing.

Ms. BROOKINS: The cost of our agricultural programs has been rising at a faster rate than defense spending. In fact, the cost of our programs averages out each year in the past four or five years to be roughly $15 billion a year. And this compares with around a billion dollars a year in the early 1970s.

BEARDEN [voice-over]: President Reagan reacted to the crisis in 1983 with a one-shot program called Payment-in-Kind, the PIK program.

Pres. RONALD REAGAN [January 11, 1983]: This plan is aimed at bringing supplies more in line with demand and strengthening farm income in future years.

BEARDEN [voice-over]: For one year farmers were offered surplus grain instead of money in return for taking some of their acreage out of production. Farmers could then sell the grain on the open market.

Mr. RASMUSSEN: Many farmers went into the program and we took out well over 60 million acres of farm land, the largest acreage reduction program that the nation had ever seen. The program had a very definite effect upon supplies. The next year the supplies dropped dramatically.

BEARDEN [voice-over]: PIK pulled the plug on the mountains of surplus, but it also cost billions of dollars more than anyone expected. A drought cut production in '83 and the government actually had to go out and buy grain to turn over to the farmers. Some argue PIK did much more harm than good.

Ms. BROOKINS: Payment-in-Kind backfired royally on us because the high price levels that this triggered in the United States and our cutbacks in acreage encouraged substantial additional production in other countries aroundthe world who could compete with us.

BEARDEN [voice-over]: Over the past five years the U.S. share of the world wheat trade has dropped from 48 to 32 , while surpluses have rebounded to levels higher than 1982. For farmers like Don Loeslie, that means another year of depressed prices. Loeslie's been a farmer for 26 years. He's a past president of the National Association of Wheat Growers. He says he's learned to accept the ups and downs of the weather because there isn't much he can do about it. The ups and downs of administration after administration trying to control surpluses is another matter.

Mr. LOESLIE: I don't think that we as a country have made the determination whether we really want to be an exporting country. We're just on a roulette wheel, and where it stops dictates if we're successful or if we're not.

MacNEIL: For another view of the farm debate, here is today's cartoon by Ranon Lurie.

[Ranon Lurie cartoon -- Congress cow being milked by farmer, who then drowns in the milk]

MacNEIL: Once again, the main stories of the day. The U.S. and the Soviet Union agreed to resume commercial airline service. Second-day reaction to the Geneva summit was mixed. In South Africa, the death toll in the latest black clash with police rose to 13.

Good night, Judy.

WOODRUFF: Good night, Robin. That's our NewsHour for tonight. We'll be back on Monday night. I'm Judy Woodruff. Thank you and good night.