The MacNeil/Lehrer NewsHour

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

MS. WOODRUFF: And I'm Judy Woodruff in New York. After a summary of the news this Monday, we examine Ross Perot's plan to slash the federal budget deficit. He's out of the race, but his economic plan is up for discussion. And we do that with Perot economic adviser John White, Republican Senator Phil Gramm, Clinton economic adviser Robert Reich and House Budget Committee Chairman Leon Panetta. Then a unique 1-800 number for information on political candidates, and a 20th anniversary look at the law that broke down barriers for women's sports.NEWS SUMMARY

MR. LEHRER: President Bush today stepped up pressure on Iraq to comply with U.N. cease-fire resolutions. The Associated Press and Reuters News agencies reported the aircraft carrier John F. Kennedy and its battle group would be sent to the region. It will join more than two dozen warships, including two other carriers, in waters near Iraq. A Patriot missile battery is also being sent to neighboring Kuwait. U.S. Marine, Navy and Air Force units will reportedly take part in joint military exercises with Kuwait early next week. Yesterday Iraq agreed to let U.N. weapons inspectors into its agriculture ministry after a three-week standoff. President Bush is scheduled to meet with his top national security advisers at the White House this evening to consider the Iraq situation. Earlier in the day he spoke about it at a campaign appearance in Grand Rapids, Michigan.

PRESIDENT BUSH: I have not shifted gears yet from trying to make some good things happen for this country, including yesterday making some decisions about standing up to be sure that Saddam Hussein lives up to these U.N. resolutions. He's going to do it. He may not know it, but he is going to live up to those resolutions.

MS. WOODRUFF: The Iraqi government today described its standoff with the U.N. as a splendid victory. The deal to allow U.N. weapons inspections came only after the U.N. agreed to Iraqi demands on composition of the U.N. team. It agreed that no inspectors for nations that fought Iraq in the Gulf War would be allowed into the ministry. Robert Moore of Independent Television News reports from Baghdad.

MR. MOORE: The breakthrough at the United Nations last night came at the same time as President Saddam Hussein was appearing on Iraqi television. He was in a self-confident, even belligerent mood, conferring medals on those closest to him. He said that the mother of all battles was not over. His capitulation, like in previous incidents, came at the last moment, involving some last minute brinkmanship by the Iraqi leader. The state-controlled Iraqi press is interpreting the compromise as a victory for Baghdad. There are though elements of farce, but by the time the U.N. inspectors reach the agriculture ministry tomorrow, any secret military documents that might have been stored inside are likely to have been removed. Ordinary Iraqis have carried on as normal, ignoring fears that another murky attack had been imminent. Concern here centered as much on the country's high prices, but the total trade embargo,almost exactly two years on, has not had the crushing economic expected. The markets are full. Foreign goods are on sale, suggesting that sanction busting is a growing industry.

MR. LEHRER: Democratic presidential candidate Bill Clinton said today he supports President Bush's handling of the Iraq situation. He said he hopes the United States will now pressure Iraq to comply with all of the cease-fire resolutions. But he criticized the Bush administration for not eliminating more of Iraq's war machine at the end of Operation Desert Storm.

MS. WOODRUFF: Clinton also had comments on the fighting in Bosnia today. He blamed Serbia for the violence and called for international air strikes against Serb forces if they persist in disrupting efforts to get relief supplies to the Bosnian people. He said the U.S. should supply air and naval forces to such an operation. U.N. officials today said they were considering air dropping supplies to citizens of Gorazde. An estimated 70,000 people are trapped in the city, which is the last Muslim holdout along Bosnia's border with Serbia. Also today U.N. officials said they were being blackmailed by Serb forces into shipping Moslem refugees out of Bosnia. They said the Serbs threatened to harm the refugees if they were not removed. The fighting has created Europe's worst refugee crisis since World War II as Geoffrey Archer of Independent Television News reports.

MR. ARCHER: On the roads leading to the frontiers of the old Yugoslavia thousands of refugees queued to get out, mostly Bosnians, but Serbs and Croatians too. The flood of victims of the intractable fighting struggling to find safety and shelter abroad has opened rifts within Europe over what to do with them. Germany's extended its hospitality to over 200,000 refugees but countries like Britain and France have taken many fewer, saying it's better they be sheltered as close to their old homes as possible. Within the frontiers of the old Yugoslavia, over 2 million people have been displaced from their homes, refugees in their own lands. But they're surging out of the country now, nearly 80,000, into the bordering nations of Hungary and Italy. Many more have fled to Germany and tens of thousands have gone further afield to Switzerland and Sweden. About 500,000 have fled the old Yugoslavia. Britain has given shelter to about 1,500 of them. In London today, the leader of the Bosnian Serbs said settling the refugees away from the fighting is not the answer.

DR. RADOVAN KARADZIC, leader, Bosnian Serbs: War should end immediately. Then we should provide possibilities for the refugees to return to their homes.

MS. WOODRUFF: With no end of the war in sight, the United Nations has scheduled an international conference in Geneva on Wednesday to look for solutions to the refugee crisis. It requested $142 million in humanitarian assistance in May, but so far has raised just half of that.

MR. LEHRER: The government of Kenya has refused to allow 283 Somalian refugees into the country. They have been stranded on an aging freighter off the Kenyan coast for the past five days. Thousands of Somalis have escaped drought, famine, and civil war in their country by traveling over land to refugee camps in Kenya. And that's it for the News Summary tonight. Now it's on to the Perot deficit reduction plan, dialing for the candidates' positions, and the 20th birthday of Title 9. FOCUS - PEROT'S PLAN

MS. WOODRUFF: First up tonight, how to balance the budget by non candidate Ross Perot. Is there a message here for candidates Bush and Clinton? Today what's left of the Perot campaign released a deficit reduction plan in the pages of U.S. News & World Report Magazine. U.S. News calls it a "boot camp approach" to fiscal policy, no pain, no gain. Over the next five years, the pain includes additional defense cuts which Perot people claim would save $40 billion, across-the-board domestic spending cuts saving over 108 billion, big changes in entitlement programs such as Social Security and Medicare, which account for almost half of all federal spending, saving more than 250 billion, and a mix of new individual and corporate taxes, raising more than $300 billion. And what's the gain -- more spending for research and development, aid to cities, education, and infrastructure, and according to the Perot campaign a budget surplus of $8 billion in five years. Could it work? Well, we begin by flushing out some of the details with the plan's primary author, John White. He was a Perot adviser and a former budget official in the Carter administration. First of all, Mr. White, does Ross Perot endorse this plan?

MR. WHITE: Yes, absolutely, Judy. He was enthusiastic about getting it out.

MS. WOODRUFF: Well, why didn't he put it out himself? I mean, why release it this way?

MR. WHITE: Well, the point was simply one of timing. We were ready to have it released. Ross was talking about having a speech where this would be the centerpiece of his campaign, and that speech would have taken place in about another week.

MS. WOODRUFF: All right. Let's just go through it now part by part. And first of all, in the defense area, you're talking about cutting another 40 billion over and above what the Bush administration would propose over the next five years. How do you get to that size savings? How much of it is in personnel? How much of it is in weapons systems and so forth?

MR. WHITE: We looked at a whole set of different plans and proposals that have been put forth and decided that it would be feasible and prudent to cut another 40 billion dollars. Much of that has to come through restructuring. The old problems that we face with the Cold War are gone, so we're going to have to change the character of the Defense Department. We think we can do that. We think it's feasible and that money can be saved in doing so.

MS. WOODRUFF: What do you mean change the character? What do you mean?

MR. WHITE: Well, we no longer will have the Russian threat, of course, the Soviet threat. That means that a good many soldiers and sailors and airmen can come home. It means that we do not have to have large forces in Central Europe. We do not have to have much of the heavy equipment that we've had deployed around the world. So that will change the character of our forces.

MS. WOODRUFF: Is that it? Is it mainly Europe? Where else?

MR. WHITE: No, it certainly, it's truly in the Far East as well. I think we can reduce the forces in the Far East. In addition to that, we can cut back on R&D spending. We don't need big, fancy multibillion dollar bombers to penetrate the Soviet Union. We don't need the Sea Wolf submarine and other expensive equipment of that sort.

MS. WOODRUFF: All right now, let's move now to cuts in the so- called "discretionary spending" area. This is the funding of all kinds of government programs. The Perot plan would -- just to list it here -- make major cuts in funding for targeted programs, among them mass transit and aid for the arts, and eliminate other programs altogether like the proposed space station, plus, the plan would require a 10 percent across-the-board cut in all remaining programs and agencies. Ten percent across-the-board, where did you come up with that number?

MR. WHITE: We came up with it by looking at the programs and deciding that with that much spending and agencies that are large that we certainly could tighten our belts a bit at this time when we need to reduce the deficit and take out that sort of spending.

MS. WOODRUFF: And before I ask you another specific, as I understand it, you're talking about saving 108 billion --

MR. WHITE: Yes.

MS. WOODRUFF: -- over five years. At one point, didn't Mr. Perot talk about 180 billion? I think he lumped together waste, fraud, and abuse in government. Is this generally the same -- the same category?

MR. WHITE: No, not exactly. As you know, in this plan we've taken it really line by line and looked at every part of the budget and identified in each part of the budget where we would find savings.

MS. WOODRUFF: So -- and what are some other examples, other than -- we mentioned mass transit, funding for the arts. I mean --

MR. WHITE: Let me put them in some categories. I think there are things, for example, that have worked and that we don't need any longer. The Rural Electrification Agency which goes back to the New Deal, it's done its job. I think it's time to phase it down. The space station, I think that comes in a different category, something that we can't afford, even though it would be nice to have. I think there are other kinds of programs that we don't need. There is clinical experience for law schools, and I don't know exactly what that is, but I'm dubious that the American people want to spend money training lawyers.

MS. WOODRUFF: And how did you come up with some of these programs and these numbers? Did you personally go over the budget line item by line item?

MR. WHITE: Absolutely. I put together a team of folks under Ross's direction and we went through the entire budget line by line.

MS. WOODRUFF: All right. Let's look now at another area, and that's entitlement programs, which as we said a moment ago account for a huge amount of the growth in the budget. Among other things, the plan would call for Social Security recipients with incomes over $25,000 a year, they would pay taxes on up to 85 percent of their benefits, up from 50 percent currently. Medicare recipients would pay sharply higher rates for insurance to cover doctors' bills and Medicare payments to hospitals and other health care providers would be cut back, though in as yet unspecified ways. Who gets hurt from all this, John White?

MR. WHITE: Well, I think our approach here is to make sure first of all that the media do not get hurt, secondly, to spread the cost as evenly and as fairly as we can, and to do it over a limited amount of time, in this case five years. So this plan asked people to sacrifice -- there's no question about that. I think it's a plan that is fair and doesn't ask too much sacrifice of any one particular group.

MS. WOODRUFF: But you're asking, you know, what middle income - - how do you categorize the Medicare and Social Security recipients that you're asking to take these hits?

MR. WHITE: Well, in the case of the Social Security recipients, it's less than 20 percent of the total and it's the highest income recipients who would be asked to sacrifice. In the case of Medicare, because it is a more broadly-based program and is growing really at a very, very high rate in terms of the cost, we would have to take more out. But we're not in that case reducing anybody's benefits per se. We're cutting cost growth in the future.

MS. WOODRUFF: But you're still talking about saving a huge -- what, 250 billion over --

MR. WHITE: Absolutely. We have to save that money if we're going to balance this budget. In total, we save $744 billion which then goes back into the economy for future investment in growth and the creation of new jobs.

MS. WOODRUFF: All right, and finally they are talking about changes in the tax system, among them the top federal income tax rate would go up from 31 to 33 percent, tax on gasoline would go up 10 cents a year for the next five years, home mortgage tax deductions would be limited to the first $250,000 of a loan, the portion of employer paid health insurance would be taxed, and for businesses, only 50 percent of business entertainment expenses could be deducted down from 80 percent. Again, John White, who is getting hurt here the most?

MR. WHITE: In this case, it is really high income people. We are asking the high income people to make some sacrifice because we think they can afford to do so. And as I think you'll indicate in other parts of the plan we also encourage investment, and again, much of that is done by high income people. And we're urging people to invest in America and to grow jobs and to make it a better future for our children.

MS. WOODRUFF: But you talk about -- again, you know, the cost of housing has gone up -- you're talking about affecting a lot of people with the mortgage interest cap that you're talking about.

MR. WHITE: No. As near as we can tell, that's about a million mortgagees with those sorts of rates. Most people have much lower mortgages than $250,000.

MS. WOODRUFF: And what about gasoline? Everybody who drives will be affected by that.

MR. WHITE: Yes. The gasoline tax is a serious issue, but we think it's very important. It's important for conservation. It's important for the environment. It's important for our national security. We just fought a war that was largely predicated on our need for fuel. So we think that's a long-term conservation activity that has to take place.

MS. WOODRUFF: What makes you think -- you and Mr. Perot and the others who were advising him think that you can pull something like this off when it has taken what, more than 12 years to build up the deficit to the size it is right now?

MR. WHITE: Well, I think the largest problem is indicated by the size of the deficit. 75 percent of our total deficit has been created in the last 10 years, so we've really gone out of control in terms of creating those debts. Next, today it takes 12 generations to double our standard of living. In the fifties and sixties, it took one and a half generations to do that. So we are in a situation where we're going to leave our children a country that is not as good as the country that we received from our parents. I think most Americans find that unacceptable and will be willing to make some sacrifice. And a plan like this certainly has some sacrifice, but when all is said and done, after that sacrifice there is strong growth, job creation, more exports, fewer imports, and, in fact, a much better economy.

MS. WOODRUFF: Well, John White, stay with us. Jim.

MR. LEHRER: Now, three reactions to Mr. White and the Perot plan. Robert Reich teaches political economy at Harvard's Kennedy School. He is one of Democratic presidential nominee Bill Clinton's economic advisers. Sen. Phil Gramm, Republican of Texas, is on the Senate Budget, Banking & Appropriations Committees. He was a co- sponsor of the 1985 Gramm-Rudman Balanced Budget Act, and he will keynote the 1992 Republican Convention in Houston next month. Congressman Leon Panetta, Democrat of California, is Chairman of the House Budget Committee. Prof. Reich in Boston, first in general terms, what do you think of the Perot plan?

PROF. REICH: Well, it's certainly a provocative plan, Jim. In fact, I'm gratified that several provisions in the plan are actually borrowed from the Clinton plan, such as carefully targeted tax investments, tax credits, and also the military cut is about the same as in the Clinton plan, and various other provisions. But what really worries me is two things: No. 1, at this time when we have so much unemployment, so much under utilized industrial capacity and are likely to have for the next few years, to have it planned like this, such radical deficit reduction, is likely to keep the economy in deep recession, in fact, even deeper recession, the economy needs to be stimulated now, not to be killed.

MR. LEHRER: In what way would this make the deficit work, or hurt the economy?

PROF. REICH: Well, the economy is again -- when you have so much unemployment, so much under utilized capacity, as we have right now, what we need is a stimulation. We don't want to simply raise taxes as much as you have in this plan, and also cut spending so much, because that takes the wind out of the economy, but there's something else that worries me as well, and that is over the long-term where is the growth really coming from? The amount invested in education and training and infrastructure is not nearly as much in the Clinton plan. And don't forget, that is the other deficit. We have a deficit with regard to public investment, public investment in education, training, and infrastructure. That's where he really gets the big balance with regard to economic growth.

MR. LEHRER: Do you believe, in a word, that if it were enact, forget all of the objections that you have, do you think it would, in fact, reduce the deficit to where Mr. White and Perot believe it will?

PROF. REICH: I think it would reduce the deficit, but again it's very important to keep in mind that the goal overall is not necessarily just deficit reduction. The goal is economic growth, higher real incomes for Americans in the future. That's where I get worried.

MR. LEHRER: All right. Sen. Gramm, what is your overall reaction to this?

SEN. GRAMM: Well, Jim, first of all, if you judge a policy's effectiveness based on big the pill is and how bitter it is, that is pretty effective. I guess my response is as follows. First of all, I disagree that we have a shortage of government spending or so-called government investment. We have a real shortage of private investment, the private sector of the economy. I'm not going to criticize anybody, including Perot, for proposing the real deficit reduction program. Clinton has proposed the largest spending increase in history, the largest tax increase in history. And when you take out the phony savings, the deficit actually goes up. But the problem is what Perot's plan calls savings is really taxes. Now, look at Medicare. Instead of trying to institute cost control, instead of trying to deal with the medical liability problem, instead of trying to promote competition, it simply taxes moderate income retirees. The idea that we can balance the budget by taxing Social Security recipients that are earning $25,000 a year when Social Security is in the black, when the trust fund is building up, I think simply doesn't make sense. So I think what we need is a systematic approach. I agree with Perot that we need to deal with the deficit. This idea we've got to stimulate the economy with deficitspending if deficits stimulated the economy, we would have reached economic heaven a long time ago. But I think what we need is a comprehensive program to gain control of entitlement spending, not by raising taxes to pay for more of it, but by instituting reforms in the program. And I'd like to go back to an old Jimmy Carter concept, a zero-based budgeting, where we start out and knock out the authorization for all unearned benefits and make all these programs be reauthorized or else we don't fund them. I think it's that systematic approach, Jim, that we need.

MR. LEHRER: All right, Senator, thank you. Congressman Panetta, what do you think of this?

REP. PANETTA: Well, that's an effort to confront what I think is one of the worst problems facing our economy, which is the long-term deficit. We're looking at a $4 trillion federal deficit right now. We're looking at probably reaching $6 trillion within the next couple of years. It's eating us up alive in terms of our ability to get investment money for -- to be able to pull out of this recession. It's eating up long-term interest rates that are remaining high and keeping interest rates unstable. And it's eating up the resources we need to confront the problems that face our society. So you've got to deal with the deficit. The only way to deal with it is straight on. There aren't any easy answers to this. Some would say all you have to do is go after waste, fraud, and abuse. You can't. It's not enough. Some would say, just grow out of the deficit. You can't do that either. Some would say just pass a constitutional amendment to balance the budget and that'll solve your problem. That's not the way to deal with this either. You've got to use leadership and confront these issues. You've got to look at entitlements, which make up now well over close to 50 percent of the federal budget, and probably over 50 percent.

MR. LEHRER: Which the Perot plan does. Do you think adequately?

REP. PANETTA: I think you have to deal with entitlements. How can you -- how can you not deal with the cost growth in entitlements and try to balance the budget when it makes up 50 percent of spending? So you've got to look at what they did, which is health care costs. And Bill Clinton has done the same thing on health care, trying to confront that issue. You've got to also look at retirement programs. They were willing to go after Social Security recipients at the upper income level and tax those benefits. You've got to look at other entitlements such as farm subsidy programs. Secondly, you've got to look at defense. While Bush has proposed defense reductions, I think everyone feels that you can do better in terms of defense savings over these next five years. And lastly you have to look at revenues. I mean, I think the argument that somehow revenues play absolutely no role in deficit reduction is wrong. But the '90 budget agreement, we did 2/3 with the President's cooperation, 2/3 in spending savings, 1/3 in revenues. That's about the right ratio that you need for a deficit reduction plan. Both Perot, as well as Clinton, are willing to look at the revenue side. And I think that's important to do. So all of the elements are here. The key is leadership and the reason we're facing this issue is because we just have not had the kind of leadership both from the President and the Congress to confront these issues. And I think what the Perot plan at least does is to say to the candidates here's a real proposal to deal with deficit reduction, debate it, and let's see where you stand in terms of deficit reduction.

MR. LEHRER: Of course, there's not going to be any leadership from Mr. Perot on this, is there, Mr. White?

MR. WHITE: Well, Mr. Perot certainly endorses this plan and urges people to debate it and to change it and modify it and improve it any place they can. But to face up to the problem, as Congressman Panetta said, that we have a fundamental national problem, which is this debt, and we have to solve that problem.

MR. LEHRER: All right. Let's go back, speaking of debating it, let's go back through some of the things that have been raised by first of all Prof. Reich. You heard what he said. This is a radical thing, that it may do something for the deficit, but this is not the time; there are bigger problems right now that have to be faced.

MR. WHITE: We keep putting off this fundamental problem because of short-term problems. I think that's just wrong. Second point, this is a plan that's predicated on starting in 1994. We will have this recession behind us by then. That's very important. The third point, as Congressman and Sen. Gramm said, we really need private investment stimulated. This plan stimulates private investment and it also does something for selected public investment.

MR. LEHRER: So the private -- his objection -- Prof. Reich's objection that the government should do more to stimulate, you think that will be replaced by private investment.

MR. WHITE: Absolutely. We have done the econometric modeling of this and this plan gets you a large increase in investment and in job growth.

PROF. REICH: Jim, if --

MR. LEHRER: Mr. Reich, yes.

PROF. REICH: If I could just say one thing, those econometric models that Mr. White is referring to do not incorporate public investment. Remember, we're dealing in a global economy now. Savings are now sloshing across borders from one country to another. The only resources that are really rooted inside an economy are people and roads and bridges and all kinds of infrastructure that supports those people. If we don't invest in skills and training and infrastructure, we don't have economic growth. If we don't have economic growth, we're not going to reduce the deficit. That's why the Clinton plan -- and here I have to correct Sen. Gramm -- I'm not a political debater, but I am an economist, and I can assure him that the Clinton plan does attempt very successfully in my view to reduce the budget deficit. In fact, it cuts the budget deficit by 1996 in half. But at the same time, it incorporates that other deficit reduction, the deficit in public investment, which is so critical.

MR. WHITE: Jim, could I respond to that?

MR. LEHRER: Yeah. Just one second. I wanted to pursue one thing with you, Prof. Reich, and that is Mr. White's point that it's private growth that is the key to the future of this country, not public spending growth.

PROF. REICH: Obviously, private investment is terribly important. And that's why the Clinton plan does have incentives for private investment built in. But remember because we're dealing in a global economy, money is now sloshing everywhere across borders. You have to ask yourself -- again, this is very very critical -- what is central to economic growth? What's central to economic growth in terms of attracting global capital, in terms of stimulating savings and investment, and that is a well educated, well trained population, with adequate roads and bridges. It's -- anybody knows who's stuck out in traffic how much deteriorating there has been.

MR. LEHRER: And Sen. Gramm, only the government can do that, right?

SEN. GRAMM: Well, Jim, let me respond. It seems to me that only in Cuba and North Korea and with the Democrats and the Bill Clinton campaign do we have people talking about government as a source of economic growth. We need private investment in the private sector of the economy and what does an economy have that is more important to it than its economic system than a system of incentives that rewards people for working, saving and investing? The Clinton program basically is a program that raises taxes, that if you add up all the mandated benefits and all the revenues seizes over 50 percent of all corporate profits in the country, and what it does is fund a massive increase in domestic spending, and when you take out all the phony savings, a line item veto, which Congress has not and will not adopt, all of these savings that are yet to be designated, we're talking about a $25 billion a year increase in deficit. So we're talking about deficits not mattering that we've got to look at these other problems. It's obvious that that's where the Clinton campaign has gone. They've gone in the direction that government can solve the problem. I think that's out of sync with the 1990s.

PROF. REICH: Look at every other major nation, every major industrialized nation is investing like mad in transportation, education, infrastructure. We are not. That's going to be a problem.

MR. LEHRER: Third voice, Congressman Panetta, where do you balance the need for the government to educate and build the roads and the government to stimulate the private economy and turn it over to them for growth?

REP. PANETTA: Jim, I don't think this is an "either/or" kind of argument and that's the problem here.

MR. LEHRER: It is between Sen. Gramm and Prof. --

REP. PANETTA: No, it's not. What Phil Gramm is basically arguing is kind of the administration's approach that all you really have to do is cut taxes for the wealthy or cut taxes --

SEN. GRAMM: No, I'm saying the private sector works.

REP. PANETTA: -- and that'll stimulate growth to deal with the deficit. And I think the other approach is that if you spend enough in terms of government spending initiatives that that could do it. You know, my view is that you can't lose sight of the principal problem, which is this horrendous deficit which is eating us up alive. You can't pretend that it doesn't exist. I think less than 1 percent of GDP, Gross National Product, which we can then feed into deficit reduction, is not asking too much from our economy. At the same time, you do need to make the investments. And there's no question about that. And you do need to make --

MR. LEHRER: When you say investments, what do you need?

REP. PANETTA: When I'm talking about investments, I'm talking about the same kind of investments that Bill Clinton's talking about in terms of investing in education, investing in transportation, investing in our infrastructure, and investing in health care, and some of these other areas. I think the Perot plan basically says the same thing. But in addition to that, this is also tax incentives aimed at business. But you don't say that all we can do is that and no deficit reduction or not much more in deficit reduction. You've got to make a long-term commitment to getting the deficit down. And if you don't make that in real terms, all of the talk about growth, all of the talk about investment isn't going to mean much in terms of future interest rates.

SEN. GRAMM: Jim, could I make one point?

MR. LEHRER: Yes, sir.

SEN. GRAMM: Twenty-five years ago over 6 percent of the federal budget was investment in infrastructure,in science and technology in the future. That's been cut by about 2/3. We are spending money on consumption, not investment. What Gov. Clinton thinks that he can do is change the whole budget arithmetic by changing the language, by simply saying that by giving money to cities that that somehow is investment. What we need is investment in the private sector of the economy. To listen to these people talk, you wouldn't know that we passed a $112 billion highway bill, that we have a major highway construction program underway.

MR. LEHRER: Prof. Reich, do you want to respond to that?

PROF. REICH: Well, the major problem with the economy, and I think that Congressman Panetta pointed out to this, is that we have had for at least ten or fifteen years too much public and private consumption, not enough public and private investment. I don't think Sen. Gramm and I are arguing that either it's one or the other. In fact, one of the virtues of the Clinton plan is that it shifts the entire mix from public and private consumption to public and private investment, but again it is focused on growth. It is not focused simply on short-term austerity. That's what worries me about the Perot plan.

MR. LEHRER: Short-term austerity, Mr. White. You mentioned -- you told Judy that what Ross Perot has in mind, what this plan has, is pain in there but it's across-the-board pain. Is that a must? I mean, does everybody have to feel this or it's not going to work?

MR. WHITE: Well, it's not a question of pain because it's good for people's souls. It's a question of the reality of the situation. As Congressman Panetta said, we have this huge deficit. We can talk about all these other things, but we must get that deficit down. Getting that deficit down is critical to the future growth of this country. If we don't do that, we're going to leave the country worse off than we found it.

MR. LEHRER: What would you and Mr. Perot say to those who say, hey, wait a minute, there's an awful lot of people in this country who are already having pain of various kinds, economic, and they have had for the last several years?

MR. WHITE: And one of the -- one of the absolute strictures that Mr. Perot put on this plan is that it would not hurt the median. We worked very hard to do that. Second point i would make is that there are really three areas where he emphasized increasing expenditures, and they were for health, they were for infrastructure, they were for R&D.

MR. LEHRER: Define infrastructure.

MR. WHITE: Infrastructure --

MR. LEHRER: With Perot.

MR. WHITE: Infrastructure in this case, as Prof. Reich has said, would be highways, improvements in our telecommunications systems, improvements in our air traffic control systems and so on. So we do think you need to increase the strength of the people in terms of their education and their health and their capabilities. That's all part of it.

MR. LEHRER: Yeah.

REP. PANETTA: The fundamental problem, Jim, is really that you're trying to get leadership in this country to be honest with the American people. We talk about anger and frustration among the American people. The last thing they want to do is to be lied about, about what they really have to confront in terms of our economy. And it's been tough. These are all political landmarks. Every one of these issues is a political landmark in terms of the politics of both parties. But the American people I think are ready to hear the message that all of us have to work with this together, that there's some sacrifice that's going to be involved on the part of all of us if our children are going to have a better life.

MR. LEHRER: Sen. Gramm, do you accept that, that this cannot be done without sacrifice from Republicans and Democrats, rich people, middle income people, businessmen, labor people, everybody in this country?

SEN. GRAMM: Well, I know we're talking about sacrifices from working people when I listen to this program. You cannot deal with the deficit without controlling spending. You can't define this problem away by saying that for Bill Clinton giving moneys to the cities is investment. You --

MR. LEHRER: I'm talking about the Perot plan.

SEN. GRAMM: I'm talking about both.

MR. LEHRER: Okay.

SEN. GRAMM: You have got to reduce the total level of federal spending. You have got to bring the growth of these programs under control. There are things in the Perot plan that I support. One of the criticisms I have of it is there's a real tendency to call savings taxes. You're not saving money on Medicare by taxing Medicare recipients.

MR. LEHRER: Let me --

SEN. GRAMM: You've got to reform the health care system.

MR. LEHRER: Let me put the question a little differently, Sen. Gramm. Just pick up on what Congressman Panetta said, that the people of the United States are sick and tired of politicians, Republicans, Democrats, Congressmen, members of administrations not telling the truth about all of this. Do you agree with him?

SEN. GRAMM: I think that's true. I think they are and I think that we have got to begin to deal with the deficit by controlling spending. You can't define the problem away. We can't spend our way out of the problem. We have got to reduce the amount of money the federal government is spending. That means setting priorities. It means saying no. I've had some experience with that. It is very difficult, but we cannot deal with the problem unless we do it, and if we don't deal with the problem, we're going to end up paying for it and paying very dearly.

MR. LEHRER: Congressman Panetta, do you agree that if you had to put the issues on a list of which is the most important, would you agree with the Senator that spending is the No. 1 thing to deal with?

REP. PANETTA: It's to sell this package, to sell the package to the American people, it has to be balanced in terms of spending reductions that are going to impact obviously in a cross-section of people, and tax increases, which have to be aimed at the wealthy in this country. I mean, you can't have a balanced package that just goes on spending and these revenues alone. And the President basically pointed that out when we did the 1990 budget agreement. The President, for all the problems he's been confronting politically on that issue, and for all of the apologies, the fact is the President put everything on the table. And that's what Bill Clinton has to do in terms of confronting the issues. You have to put everything on the table and you've got to be willing to say that we've got to go after spending, we've got to do controls, particularly on entitlements, and we've got to do revenues as part of that package.

MR. LEHRER: Mr. White, was this the kind of debate that Mr. Perot hopes to stimulate?

MR. WHITE: Absolutely. This was just the kind of debate he wishes to stimulate.

MR. LEHRER: Well, I think we resolved it all here. And I thank you, I thank all four of you for being present when it was done.

MS. WOODRUFF: Still ahead on the NewsHour, using the telephone to make political decisions, and women in sports. FOCUS - VOTE SMART

MS. WOODRUFF: Next tonight, getting the line on political candidates. 1992 has been called the year of the woman, year of the talk show, it also has been called the year of the 1-800 number. Presidential Candidate Jerry Brown used it monotonously but successfully to raise money. Now a group in rural Oregon called Vote Smart is offering free information about Congressional, Senate and Gubernatorial Candidates. All it takes is a call to a 1-800 telephone number. Correspondent Lee Hochberg of Oregon Public Broadcasting has the story from Corvalis, Oregon.

MR. HOCHBERG: THe calls pour in to rural Corvalis from all over the Country. A man from Missouri asks what Senator Christopher Bonds is on environmental issues.

TELEPHONE OPERATOR: He voted no to consider a bill to allow oil drilling in the Arctic National Wildlife Refuge.

MR. HOCHBERG: A woman from West Virginia wonders how her Congressman Bob Wise stands on abortion.

TELEPHONE OPERATOR: In 92 he voted yes to over turn the Administrations quote gag rule and allow abortion counseling.

MR. HOCHBERG: In these spartan quarters on the campus of Oregon State University the 75 volunteers of Project Vote Smart have fielded an estimated 10,000 calls this year. Questions about candidates for President, Congress, the Senate and some Gubernatorial races.

ADELAIDE ELM, Project Vote Smart: When the check bouncing scandal occurred we got lots of calls from people who wanted to know who bounced the most checks. Gun control has been a big question in people's minds probably due to the LA Riots.

CALLER: Do you have anything on campaign financing on him. Where he gets his money?

TELEPHONE OPERATOR: Yes we do.

MR. HOCHBERG: Project Vote Smarts directors believe American voters have lost access to vital political information. They say neighborhood institutions that once provided it have broken down and manipulative political advertisements are filling the void.

MR. KIMBALL: This will be the first starting point of allowing citizens to do an end run around all of this nonsense, this issueless manipulative nonsense and reconnect then with the basic factual information absolutely crucial to their struggle to self govern.

MR. HOCHBERG: Former Arizona politician directs Vote Smart. Recruiting volunteers recently in an Oregon State University classroom he told how his unsuccessful run for the Senate in 1986 convinced him America's democracy is in trouble. It started when the AFL-CIO offered him $50,000 for his campaign.

RICHARD KIMBALL, Director, Project Vote Smart: And so what did I do. I stuck my hand out. I said that is great give me the money and I can go out and talk about Star Wars and Contra Aid and some of these other things that concern me and they said wait a minute. We want you to take the first $20,000 and we want you to hire a pollster. They did the poll, they found out that my positive was that I was born in the State.

MR. HOCHBERG: His campaign advisors then directed him to spend the remaining $30,000 on an emotional television commercial playing up his Arizona roots.

MR. KIMBALL: And so we created a commercial. We created a commercial of me feeding carrots to horses and Arizona sunsets near the Grand Canyon and picking off fruit from Arizona orange trees and a sunset literally at the end of the commercial behind my head.

COMMERCIAL: Arizona is my home. I want to continue a tradition of convictions firmly held and clearly spoken. Richard Kimball from the Heart of Arizona.

MR. HOCHBERG: Kimball lost the election but gained the knowledge that what voters are sold in TV commercials often has nothing to do with what the candidate has to offer.

MR. KIMBALL: It is dangerous to the democracy and in enormous ways that are now becoming clear to everyone.

MR. HOCHBERG: Vote Smarts computer date base provides callers the kind of information Kimball says Arizona voters should have had about him. It is available in printed form too. It includes purely non partisan data, candidate voting records, campaign finance information and candidate ratings from 60 interest groups in areas such as the environment, organized labor and others.

CANDIDATE: My platform includes getting rid of every social welfare spending program in America with the single exception of Social Security.

OPERATOR: Okay.

CANDIDATE: If a man does not work neither should he eat.

MR. HOCHBERG: Vote Smart also gives all Candidates a chance to take what it calls its national political awareness test. Telephone questionnaire to gage candidate opinions on an extensive list of public policy issues.

OPERATOR: Next statement is abortions should be illegal in all circumstances.

CANDIDATE: I strongly support.

MR. HOCHBERG: Today Alex Engs of Vote Smart is quizzing Indiana Congressional Candidate Michael Baily. He had saturated TV Stations in Indianapolis, Evansville and Cincinnati with very graphic anti abortion commercials. Baily made his pro life position clear in his Vote Smart interview but he didn't even mention abortion when asked about his political agenda.

MS. ENGS: What are your two top legislative priorities if elected to the Congress.

MR. BAILY: What needs to be done is a balanced budget amendment wiping out the deficit and then a program to pay off the national debt.

MS. ENGS: Is there a second priority?

MR. BAILY: Well there sure is and that is to completely overhaul our judicial system in the country and very clearly what we need to do is to have the prisoners pay their own way.

MR. HOCHBERG: Baily admits the shocking abortion commercial was a device to get voter attention. That doesn't surprise Richard Kimball.

MR. KIMBALL: Much more difficult and complex to get an intellectual message across television than an emotional one so they concentrate on the emotions.

MR. HOCHBERG: The truths that come from the Vote Smart interviews are telling enough that 1/3 of the candidates mostly incumbents want no part of them. With 435 Congressional Seats open, 35 Senate and 12 Governors seats and the Presidency. A total of up to 1000 candidates Vote Smart expects more than 300 will refuse to be interviewed. Democratic Challenger Bill Clinton offered his campaign position papers but said he wouldn't condense them to Vote Smarts format. The Bush Administration simply refused to respond.

ALEX ENGS, Project Vote Smart: People have been calling by the thousands asking for this information and all we are able to say is I am sorry but he has not responded to our questionnaire. That is a dead end for the voters and people are getting frustrated when they are not able to access that information.

MR. HOCHBERG: But for the thousands for whom Vote Smart is turning up the information voting is becoming less frustrating. The low paid staff members say their reward is using the technology of computers to give back the democracy what the technology of television has taken away.

ELIZABETH RIGBY, Project Vote Smart: I don't think that Thomas Jefferson ever imagined that the situation would be like it is. So we are taking the changes that hurt the system and turning it around to help the voter.

SPOKESPERSON: Here I am in the middle of something that is going to be in the history books.

MR. KIMBALL: Something is going on here that is incredibly unique in my experience. I my experience anyway. If I had gone to New York I would have been to callous and had given up or Chicago or a big city you know, back room politics or something. But these people here really thin k democracy has a chance to work and are willing to fight. I mean an incredible fight to make sure that people have access.

MR. HOCHBERG: For Kimball that fight means going on the road to publicize Vote Smart and generate resources to keep the phones and computers plugged in. Vote Smart is operating on 1.6 million dollars that it received from foundations and contributing members. To protect its non partisanship it accept no money from corporations or PAC's. Kimball hopes he is on track to make the telephone as big a part of the American democracy as the television has become.

MS. WOODRUFF: For the record Project Vote Smart's phone number is 1-800-786-6885. FOCUS - MAKING THE DIFFERENCE

MR. LEHRER: Finally tonight, the 20th birthday story of a federal law called Title 9, a law that has played a major role in the rise of women in sports, and thus to more American women than ever competing now at the summer Olympics in Barcelona, Spain. Correspondent Betty Ann Bowser of public station KUHT in Houston has our report.

MS. BOWSER: Most of these young women weren't even born back in 1972 when Title 9 went into effect as a federal regulation. For the first time, it banned discrimination against women in most collegiate athletic programs. Twenty years ago, there were virtually no opportunities for women in high school and college sports. The University of Texas and UCLA didn't have women's basketball teams. Today they play for the National Collegiate Athletic Association championship and the Final Four is broadcast on cable television. Times and traditions have changed. When Ann Richards wanted to play basketball as a little girl, she was told it wasn't ladylike, but today she's the governor of Texas and one of UT's biggest fans.

GOV. ANN RICHARDS, Texas: Simply my presence as governor says what's going on here is important, important enough for me to give my time to it.

MS. BOWSER: Billie Moore has been coaching women's basketball teams for 23 years. She remembers the old days before Title 9.

BILLIE MOORE, Women's Basketball Coach, UCLA: Somehow we started this idea that competition was bad. I can remember that, that even when we first got to start playing, we had to serve punch and cookies after the competition to make it social because forbid the thought that we would go and want to compete and beat someone.

MS. BOWSER: Today because of Title 9, there are organized teams and leagues in high school and college sports for women and scholarships for worthy female athletes. If a young woman wants to lay basketball or volleyball, she can now find teams to join. Participation in high school sports has increased sixfold. Before Title 9, Ray Hema Stevens' career would have ended on a neighborhood basketball court, but today she wears the UCLA uniform because she is on full scholarship created by the pressure of Title 9 to create equal opportunities for women.

LISA MALOSKY: We've got Texas, Texas A&M on the floor getting ready for tonight's game --

MS. BOWSER: Houston sports reporter Lisa Malosky says if it hadn't been for Title 9, she could not have excelled as a high school athlete and could never have made it in television sports as a women reporter.

LISA MALOSKY, Sportscaster, KPRC-TV, Houston: What it did for me immediately was that when I was playing basketball, all of a sudden we got the same court time as the guys. We got to practice in the big gym, rather than having to go practice in the smaller gym. Women became legitimate because of Title 9 and it has -- even though there are fewer women say coaches and administrators, there are more women involved in sports now than there ever were at any time in history of the United States in organized sports.

MS. BOWSER: The big payoff for women in athletics came this winter at the Olympics when all five American gold medals were won by women. Almost overnight, Christy Yamaguchi became a star and a role model for thousands of little girls with dreams of going for the gold. When the NCAA held its national swimming and diving competition this spring, 13 American records were broken in the fastest national women's swimming finals in history. Many of these college women are competing in Barcelona, led by Mark Schubert. He's also head coach of the women's swim team at the University of Texas and says Title 9 scholarships have made a big difference for women in swimming.

MARK SCHUBERT, Olympic Women's Swim Coach: I don't think that there's any doubt that swimming is an emerging sport for women and I think due to the fact that Title 9 has given women the opportunity to stay in a sport longer and given them the motivation to stay in the sport and to train and compete at a higher level, this is what's exciting right now with the women's team being so good, I think we're going to create a lot of heroes and the trickle down effect for the next coming Olympics, not just the next one, but the one after that, will be important.

MS. BOWSER: The average age of this year's women's Olympic swim team is 21. Before Title 9 scholarships and college teams, a world class swimmer could expect to retire when she graduated from high school. Since the late 1970s, the biggest draw at any summer Olympic games is women's gymnastics. Most of those on the team have studied for years with Bela Karolyi. He coached Mary Lou Reton to her first perfect 10 in 1984 at the summer Olympics.

BELA KAROLYI: There is talent in women's gymnastics. There is no doubt about it. We draw the greatest crowd and the largest TV attendance that's been recorded ever since 1976 as top ranked athletic event. In 1988, we got on the peak when actually doubled its audience, than any other sport, men and women combined.

MS. BOWSER: But even with all the visibility women have earned at the games in gymnastics and swimming, even with all the increase in participation by women in college sports, there is a distinct down side to Title 9. It has inadvertently created a discrepancy that is troubling to women's sports advocates. When salaries for coaching women's sports got competitive, men went after and got many of those jobs. Today after 20 years of Title 9, there are fewer women coaches in collegiate athletics than there were when the ink on Title 9 was getting dry. Donna Lopiano is director of the Women's Sports Foundation in New York.

DONNA LOPIANO, Women's Sports Foundation: When money came into women's athletics, two things happened: One, men sought to control it, and as a result of that fight for control, men's athletics was successful in combining men's and women's athletic departments. The women who were formerly athletic directors became out of a job. The women who were coaching for free, who were volunteer coaches, were out of jobs because all of a sudden those jobs coaching women's teams became lucrative, became attractive to men. And since the male athletic directors were in charge of hiring, the good 'ol boys club was used and men got all of those jobs in women's athletics. The fact of the matter is that today 75 percent of all coaches are male.

MS. BOWSER: A landmark gender study compiled by the NCAAP and released recently gives even further evidence of the lack of progress women have achieved in athletic programs receiving federal money. Again, Donna Lopiano.

DONNA LOPIANO: Less than 30 percent of all athletes are women. Less than 20 percent of the athletic operating budgets are spent on women. Less than 18 percent of the recruiting budgets were spent on women. Less than 33 percent of the scholarship dollars were spent on women, despite the fact that women are 50 percent of our student bodies. And what the NCA study did, however, though was represent a symbolic act. It acknowledged the existence of a problem; and the first step to solving that problem is saying that there is one.

MS. BOWSER: Barbara Jacket is one of those people who defies the numbers in the gender study. She's not only the coach of the women's Olympic track team; she is also one of a handful of women anywhere in the country who is an athletic director, in this case at Texas Prairie View A&M, a small state university.

BARBARA JACKET, Olympic Women's Track Coach: I'm new at this thing called athletic director, director of athletics, and I've always said that I didn't see a difference as far as women have to sweat, they have to practice, and they need equipment. So I think that the thing should be that like we do here, we try our best to make everything equal.

MS. BOWSER: The presidents of the Big Ten colleges recently voted to shift wealth and power into women's athletics at all of its schools. By 1997, the commissioners promised women would comprise 40 percent of all of its teams and get a bigger share of recruiting and scholarship money, even if it means cutting mens programs.

DONNA LOPIANO: There is no question that any solution under economic recession is going to disadvantage men's athletics and we're going to see less resources given to men and more resources given to women. It can no longer be a right for a boy to play and a privilege for women to play. Do we really want to spend over 60 percent of all athletic budgets on football and basketball? Is there some fluff in there? Do you really need eighty-five or ninety-five scholarships for a football team when only 11 plays from each team can be on the field?

MS. BOWSER: Those are questions that will be getting answered as these little girls become eligible to lead the cheering section and make a splash on the front page of the sports section. And there's something else. The U.S. Supreme Court ruled a few months ago that women can sue their colleges for damages when they think they've suffered the sting of discrimination, which means from now on, women can win their victories in a higher court.

MR. LEHRER: After two days of competition at the Olympics in Barcelona, women on the U.S. swim team have won a gold, a silver, and three bronze medals. RECAP

MS. WOODRUFF: Again, the main story of this Monday with the U.S. move to increase pressure on Iraq, Pentagon officials told news agencies a third aircraft carrier was ordered to the region and Patriot Missile batteries were sent to Kuwait. President Bush vowed that Iraqi leader Saddam Hussein would be made to comply with United Nations ceasefire resolutions, and Iraqi officials called a deal ending their three-week standoff with the U.N. a splendid victory for their country. Good night, Jim.

MR. LEHRER: Good night, Judy. We'll see you tomorrow night with an interview with a commander of the U.N. peacekeeping force in Sarajevo. I'm Jim Lehrer. Thank you and good night.